Fifth Circuit Passes on Climate-Change Case

Will the Supreme Court be asked to weigh in on another greenhouse gas case, Comer v. Murphy Oil?

By DAN REYNOLDS, senior editor of Risk & Insurance®

A federal appeals court has punted on the option of hearing a global warming lawsuit brought against Big Oil and other energy producers. The parties involved may have to petition the U.S. Supreme Court for a hearing, according to John Nevius, a shareholder in the insurance recovery practice in the New York office of Anderson Kill & Olick.

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"Comer v. Murphy Oil has been seen as an indicator of whether the federal courts will green-light nuisance suits based upon allegations of climate impact from greenhouse gas emissions," Nevius wrote in an e-mail soon after the decision.

The case carries weight because the U.S. Supreme Court adjudicated climate-change liability when it ruled in 2007 that the U.S. Environmental Protection Agency (EPA) erred when it denied Massachusetts' petition to regulate greenhouse gases, according to Jeff Kueter, the president of the Arlington, Va.-based George C. Marshall Institute.

The Comer-Murphy case pits the likes of Shell Oil, British Petroleum, driller and gasoline retailer Murphy Oil USA, and coal-fired electricity producer Allegheny Energy against a group of plaintiffs led by Mississippi landowner Ned Comer, who suffered property losses in Hurricane Katrina in 2005.

Comer and the other plaintiffs allege that the energy producers are responsible for the greenhouse gases that produce global warming. A warming planet in turn leads to fiercer windstorms like Katrina, their argument goes.

While the Supreme Court in Massachusetts v. EPA stopped short of compelling the EPA to regulate greenhouse gases, the court did say the EPA made a mistake in denying the Massachusetts petition because there seemed to be enough scientific evidence at the time to link the burning of fossil fuels with global warming.

"Equally interesting," Kueter wrote in a policy outlook, "are the implications of allowing a specific group of individuals to claim damages from a specific set of companies when the alleged harms are the result of actions all around the world."

Why limit the pool of defendants to these companies, Kueter asked. Why indeed? Why not implicate soccer moms in their gas-guzzling Cadillac Escalade SUVs? Or how about NASCAR drivers? What about every gas-powered lawnmower owner in the land?

QUORUM CONUNDRUM

The Comer-Murphy dispute, which was scheduled for an appeals hearing by the Fifth Circuit Court of Appeals in New Orleans, was on appeal from the U.S. District Court for Southern Mississippi.

The appellate court, however, couldn't muster a quorum as some judges had fallen victim to Katrina-related property losses or owned stock in the gas companies and found themselves with conflicts of interest.

So, on May 28, the appeals court balked, in effect, punting the decision into the hands of the U.S. Supreme Court.

James L. Dennis, one of the dissenting judges on the appellate panel, groused that the appeal's dismissal was "injudiciously mechanistic and arbitrary," as the court had already found the lower court in error.

Whether the Supreme Court decides to take up the Comer-Murphy case has still to be decided, but the Supreme Court's decision to vest the EPA with the power to regulate greenhouse gasses is already being challenged.

At least 40 U.S. senators, including Sen. Lisa Murkowski, R-Ala., are pushing for a proposal that would stop the EPA from regulating greenhouse gas emissions and instead leave the job to state environmental agencies.

June 14, 2010

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