RDSA Shell Plc

By Alejandro Lazo and Miguel Bustillo 

SAN FRANCISCO -- A federal judge on Thursday said he needed more information before deciding whether to dismiss lawsuits by San Francisco and Oakland alleging that five of the world's largest oil companies should pay to protect the cities' residents from the impacts of climate change.

U.S. District Judge William Alsup asked the oil companies and the cities to narrow their arguments regarding the merits of the suit. The judge also asked the companies to produce additional material backing up claims by some that they shouldn't be a part of the case because the court lacked jurisdiction over them.

The suits allege that the companies -- Exxon Mobil Corp., Chevron Corp., Royal Dutch Shell PLC, BP PLC and ConocoPhillips -- created a public nuisance by producing fossil fuels they knew would result in harmful emissions.

San Francisco and Oakland are seeking to force the companies to pay for infrastructure, such as sea walls, that they expect to need due to rising sea levels and other changes linked to warming global temperatures. The cities haven't specified how much they are seeking, but have said the costs could run into the billions of dollars.

Several other U.S. cities and counties have filed similar lawsuits targeting oil companies, including New York City, King County, Wash., and Boulder, Colo. So far, none of the lawsuits has advanced to trial, and Thursday's hearing means it will be months before a judge decides whether the San Francisco and Oakland case warrants a trial.

Lawyers for the oil companies have sought to dismiss the suits by San Francisco and Oakland, arguing among other things that they were premised on an overreaching interpretation of public-nuisance law. They also have argued that Congress has given the Environmental Protection Agency the authority to regulate pollution effects under the Clean Air Act, and that the cases impinged on the agency's powers.

During the three-hour hearing, Judge Alsup cited the beneficial role oil and gas production had played in the development of the U.S. But he also said he remained open to the idea that, given society continues to reap the benefits of that activity, some damages may have to be paid considering the potential harm of climate change. He asked both sides to explore the matter further in separate briefs.

"You lived through the same period I did, and you understand how dependent our nation has been on oil," said the judge, addressing an attorney representing the cities.

Theodore Boutrous of Gibson, Dunn & Crutcher LLP, a lawyer representing Chevron, argued the cities were asking the court to create "a new regime to regulate oil and gas production around the U.S. and around the world."

"That is, to say the least, a big ask," Mr. Boutrous said.

The two sides have argued over the relative importance of a case that provides the closest parallel to what the cities are alleging. The case, known as AEP v. Connecticut, involved a coalition of states that sought to compel coal-burning electric utilities to reduce greenhouse-gas emissions, arguing they were a public nuisance.

That case reached the U.S. Supreme Court, which ruled in a 8-0 decision in 2011 that the utility companies couldn't be sued under federal common law because the Clean Air Act gave the authority over greenhouse-gas emissions to the EPA.

"The law of nuisance has been around forever and it has responded to changes," Steve Berman, an attorney representing Oakland and San Francisco, said during Thursday's hearing. "We are not doing something that is as novel as the defense claims."

Lawyers for the oil companies earlier persuaded Judge Alsup that the San Francisco and Oakland cases, filed last year in state court, belonged in federal court.

The Trump administration earlier this month filed a friend-of-the-court brief siding with the oil companies seeking to dismiss the San Francisco and Oakland cases. Three states -- California, New Jersey and Washington -- have filed briefs siding with the cities, while 15 states, including Indiana, Texas and Colorado, have filed briefs siding with the oil companies.

(END) Dow Jones Newswires

May 24, 2018 18:32 ET (22:32 GMT)

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