By John Watson
SPENCER FANE
In a recently released opinion, Colorado Supreme Court Justice Richard Gabriel, writing for the majority, denied motions from ExxonMobil and three Suncor entities, allowing Boulder County and the City of Boulder to proceed in state court with their climate accountability lawsuit seeking damages and other relief for climate change injuries.
The original complaint filed seven years ago sought a jury trial, damages and other relief from the fossil fuel companies for climate change harms. The local governments alleged the companies concealed and misrepresented the climate change impacts of fossil fuel products while continuing to market and sell the products, leading to injuries from extreme weather, wildfires and other climate change injuries.
In terms of damages, the plaintiffs are asking for monetary relief from past and future damages plus costs to mitigate and/or remediate the impacts of climate change and damages to compensate for past and reasonably certain future damages related to decreased water rights and property values and increased administrative, staffing and monitoring costs.
Soon after filing the lawsuit in April 2018, defendants “removed the case” to federal district court in Denver. The federal district court remanded it back to state court.
The defendants appealed the federal district court’s remand order to the 10th Circuit Court of Appeals and also moved to dismiss the state court action for lack of personal jurisdiction and failure to state a claim. The state district court then “stayed the proceedings” pending resolution of the federal appeal.
After lengthy litigation in the 10th Circuit and two certiorari petitions in the U.S. Supreme Court, the 10th Circuit affirmed the federal district court’s remand order in February 2022 (25 F.4th 1238, 10th Cir. 2022). The case resumed in the Boulder County District Court, which then considered (and denied) the defendants’ pending motions to dismiss. In their motion to dismiss for failure to state a claim, defendants argued that Boulder’s claims were “displaced” or otherwise preempted by federal law.
The defendants argued that the claims were governed by the federal common law of interstate pollution; the federal Clean Air Act and other federal statutes preempted Boulder’s claims; and the federal foreign affairs power (which gives the federal government exclusive authority over foreign affairs) preempted the claims because the claims would impair the federal government’s effective exercise of foreign policy.
Bypassing the Colorado Court of Appeals, the Colorado Supreme Court, recognizing an extraordinary remedy “limited in its purpose and availability,” then exercised original jurisdiction under Colorado Appellate Rule 21 in order to “hear matters that present issues of significant public importance that we have not previously considered.”
Preemption and Venue Are the Issues. No Damages or Injunctive Rulings Yet.
The Colorado Supreme Court’s decision rejected the defendants’ argument (and the arguments of several of the seven amicus briefs filed in the case) that state law is preempted. Thus, the claims need not proceed in federal court. The court also affirmed that those harmed by an altered climate have the right to legal recourse against those responsible in state court.
But any substantive rulings related to damages and mandatory injunctive relief will have to await a jury trial and further trial court and appellate decisions. According to Gabriel, Boulder’s assertion of claims for public and private nuisance, trespass, unjust enrichment and civil conspiracy come from the purported harm to property and residents. The court’s 5-2 ruling concluded that federal law does not preempt the state law, affirming the district court’s decision to decline dismissal.
The matter now returns to state district court for further consideration. However, the Colorado Supreme Court’s rulings on the defendants’ arguments are noteworthy.
Stating that it is “axiomatic” that there is no “federal general common law,” the court acknowledged that the U.S. Supreme Court recognizes narrower, more specialized areas of federal common law addressing matters within national legislative power, “as directed by Congress and when the basic constitutional scheme so demands.” And the court stated that one specific area “of previously recognized federal common law that is pertinent to the matter [before it] concerned ‘suits brought by one State to abate pollution emanating from another State.’”
The Colorado Supreme Court analyzed precedent and concluded that the Clean Air Act displaced federal common law in this instance, but further analysis was needed to determine whether the statute preempts Boulder’s claims.
Acknowledging that Congress has the power to preempt state law, the court made its determination guided by two tenets:
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- Congress’s intent to preempt controls
- Courts will not presume that federal law supersedes the states’ historic police powers unless the law reveals Congress’s clear and manifest purpose to do so
Analyzing the three forms of federal preemption, i.e., express preemption, field preemption and conflict preemption, the majority concluded that the plaintiffs’ claims are not preempted by either federal common law or the CAA.
The majority then addressed a series of other defenses and said: “In sum, defendants’ arguments do not convince us that federal law preempts Boulder’s state law claims in this case.”
“A Patchwork of Inconsistent Local Standards That Will Beget Regulatory Chaos.”
Colorado Supreme Court Justice Carlos Samour Jr. began his dissent with this sentence: “The Pledge of Allegiance states that the United States of America is ‘one Nation under God, indivisible.’” He continues his lengthy critique of the majority’s opinion stating:
“Given the number of local municipalities throughout the country that have already brought claims like those advanced by Boulder, given that more and more municipalities are joining this trend, and given further that a number of courts have now ruled that such claims may be prosecuted, I respectfully urge the Supreme Court to take up this issue — whether in this case or another one.
My colleagues in the majority, like other courts, interpret Supreme Court precedent as permitting Boulder’s claims. Respectfully, I believe that they misread those cases. I’m concerned that this decision will contribute to a patchwork of inconsistent local standards that will beget regulatory chaos.”
The seven years of proceedings of this case provide valuable insight into how litigation related to the regulation of interstate and international air pollution will proceed in the future.
– As both a defense trial attorney and counselor, John Watson represents clients in a variety of complex commercial cases, including breach of contract actions, real estate and land development, special district litigation, construction disputes between contractors and subcontractors, securities litigation, public land and natural resources law, mining, oil and gas, wildlife, toxic tort, Superfund, and air, water and waste environmental cases. He can be reached at jwatson@spencerfane.com and 303-592-8339.