Big Apple wants to take a legal bite out of Big Oil
NYC pairs a climate change lawsuit with plans for divestment from pension funds.
Legal Insurrection readers may recall that last fall, San Francisco and Oakland filed separate lawsuits against five oil companies, asking for billions of dollars to protect against rising sea levels they blamed on climate change.
These lawsuits followed those of California’s Marin and San Mateo counties, as well as the San Diego County city of Imperial Beach, which target individual corporations for their alleged contribution to supposed global warming.
Now, it appears the Big Apple also wants to take a legal bite out of Big Oil.
New York City’s effort to hold oil and gas producers responsible for costs related to the environmental effects of their products faces an uphill battle as it tries to stretch the current law to address climate change.
The biggest city in the U.S. sued BP Plc, Chevron Corp., ConocoPhillips, Exxon Mobil Corp., and Royal Dutch Shell Plc claiming they’re the world’s largest industrial contributors to climate change.
…The city is seeking to build on successful legal challenges against producers of asbestos, cigarettes and lead paint. New York is using the centuries-old legal concepts of “public nuisance” — an illegal threat to community welfare, such as a brothel, drug den or illegal hazardous waste dump — and “private nuisance,” an unreasonable interference with the use of someone else’s land.
Both theories have been used to attack polluters, though not on the scale of global climate change. The challenge will be to persuade a judge to apply well-worn legal standards to a 21st Century problem.
Dare I suggest that the lack of gasoline, plastics, and heat would constitute more of a “public nuisance” for most people than the theoretical woes of climate change, especially in light of the recent weather development?
“Reducing greenhouse gas emissions is a global issue and requires global participation and actions,” Exxon said in a statement. “Lawsuits of this kind — filed by trial attorneys against an industry that provides products we all rely upon to power the economy and enable our domestic life – simply do not do that.”
And it would be difficult to seriously calculate damage caused by carbon dioxide emissions, especially in light of the fact that in 2017, 485 scientific papers were published casting doubt on various aspects of eco-activist belief.
Furthermore, city officials indicated that they would divest fossil fuel investments from its $189 billion public pension funds over the next five years.
“Safeguarding the retirement of our city’s police officers, teachers, firefighters and city workers is our top priority, and we believe that their financial future is linked to the sustainability of the planet,” Comptroller Scott Stringer said in the statement.
Between the opening of the pipelines, oil exploration and drilling expansions being approved by the Interior Department, and a business-friendly environment, oil stocks made the list of top picks for 2018. It is unfortunate that the people who will need the pension monies will be deprived of potential wealth because of political posturing.
It is also an astonishing move to make in light of the city’s looming pension crisis.
New York’s five pension funds are a combined $64.8 billion in debt, according to the city’s official numbers, which assumes that the funds will earn annual investment returns of at least 7 percent in perpetuity. Using a more realistic expectations for future investment return (3.61 percent), the Manhattan Institute report calculates that the city’s long-term pension debt exceeds $142 billion.
In the short-term, annual pension costs are hitting levels not seen since New York’s economic crisis in the late 1970s. Mayor Bill de Blasio’s $84.9 billion budget plan for 2018 includes $9.6 billion in payments to the city’s five pension funds.
It appears that for New York City officials, the loss of so much potential wealth is valueless against the need to virtue signal.
VICTORY!! New York City is divesting from fossil fuels!! This happened after years of hard work of our members and passionate advocates! It’s just the beginning! #DivestNY @350 @ALIGNny @NYCComptroller @TishJames pic.twitter.com/NUBHHXZHHf
— NY Communities (@nychange) January 10, 2018
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Comments
New York draws gun, shoots self in foot, with collateral damage to all New York pensioners and taxpayers.
Just when the price of oil may be rebounding, pull your (underfunded) pension money out.
Only if the gun is either possessed by the NYPD or is allowed by the Sullivan Act (as applied in NYC, which is different than the rest of the state) or the NY SAFE Act.
Im not sure NYC are allowed to own guns are they?
Secondly, how much is the law suit for? $64billion?
NYC residents are permitted to own as many guns as they want.
They just can’t have them inside NYC. Or Jersey. Or several other East Coast areas where gun-control warriors have criminalized the law-abiding gun owner. (or in some cases, the law-abiding chunk of shaped lead ball owner who the prosecutor wants to put into jail)
Didn’t NY decide to close their nuclear power plant as well as refusing to allow pipelines and drilling?
I wonder if these oil companies can refuse to sell their product in NYC?
And fracking too.
It’s not just “public nuisance”, there’s also the little issue of “proximate cause”. But this entire publicity stunt is too stupid to even bother wasting legal reasoning on it.
Big Apple wants to take a legal bite out of Big Oil
It’s just another means to achieve the progressives’ goal of wealth redistribution.
This STOOPID lawfare will result in corporations with HQ in NYC to leave (and their taxes paid to the city and state)
what a brilliant strategy – what next shut the NY Stock Exchange ?
The Brain Drain will continue from this once great world city.
why would anyone want to live there any longer ?
https://en.wikipedia.org/wiki/Lawfare
So New York has sewed these companies, I guess BP, Chevron, ConocoPhillips, Exxon Mobil, and Royal Dutch Shell can charge an extra 5$ a gallon in fuel surcharge in New York. You know just to pay for legal costs….
I like it! The city sues these companies and they recover their legal costs to defend themselves from a baseless legal action by a surcharge on all products headed to NYC.
No, discriminatory pricing, of this type, would likely not be legal. So, the companies would have to pass the costs on to all consumers. The companies could do this with only a small increase in prices. However, the real danger is that every little burg, state and country in the world would jump on the gravy train and this would raise the price of oil and refined produces astronomically.
My comment was supposed to be taken as humor. Guess I failed at that, if I had a day job I wouldn’t give it up. As it is the grandkids all know my sense of humor is a bit strange.
you need to use /sarc tag if you want a comment to not be taken literally.
As it is the comment holds more truth than not.
publicly held corporation don’t pay lawsuit loses their STOCKHOLDERS do and as such any pension plans that have these
companies in their portfolios also do.
thus NYC and other pension plans would pay for the payout.
I don’t suppose they can find a Judge in CA or HI to “find” venue to hear the case, so it may well be doomed. Even the Second Circuit Court of Appeals isn’t likely to buy this (the Ninth and more recently the Fourth are a different story).
I am sure there is Judge in the southern district of Manhattan, who will gladly take on the lawsuit at the behest of the city and the eco-terrorists who want us to go back to the Stone Age. One who was appointedd by Clintoon or his Earness.
This, like the CA lawsuits is just using the courts to blackmail large corporations. It is all designed to force the corporations to settle out of court for a billion of two annually rather than run the risk of facing a huge judgement following a court battle. It is simply a way for NYC to guarantee a significant annual income to off-set the loss of revenue due to the movement of business and workers out of the city.
Any trial is essentially doomed, unless the plaintiff can prove that man-made global warming actually exists and that the defendants contributed materially.
I note two things.
1. NYC did not sue the Venezuelan oil distributor Citgo that has 550 stations and a terminal in NYC. I assume because socialized oil does not contribute to global warming.
2. I reviewed the NYC bond disclosures. Not a word about rising sea levels or a severe realignment of the real property economic outlook as far as 30 years out.
According to the administration, a gallon of gas (at the July 2012 price of $3.42 per gallon) is broke down like this: taxes, 38 cents (11 percent, or $5.50 for a $50 purchase); distribution and marketing, 34 cents (10 percent, or $5); refining, 44 cents (13 percent, or $6.50); and crude oil $2.26 (66 percent, or $33).
Of course in some states like Pennsylvania taxes are over 60 cents a gallon
Between state and federal taxes, Pennsylvania motorists paid 69.8 cents per gallon as of Nov. 1 2016, according to the American Petroleum Institute. Another 8 cents was added Jan 1 2017 for 77.8 cents per gallon
I suspect that statements about NY’s pension debt problems in, say, five years mask the fact that the pension crisis is dire right now.
“Divestment” is not some sort of clever plan; it’s just a fancy way of saying that they’ll sell a bunch of stock. This would give the city a huge bag of cash. Any coherent investment plan would immediately use that cash to buy some other stocks. But if the immediate shortfall is dire, NY will probably use the cash to cover current pension payments. That will make the situation even more dire in the not-too-distant future, as investment income will be even less than it is now. But that will be next week’s problem. If they can hold out long enough, maybe some future D’rat president may go along with a plan for Uncle Sam to bail out the city’s grotesque finances. And when they’re called out on this miserable plan, they can bleat something incoherent about “global warming” and the sacrifices needed to fight it.
Not a good plan, but these are D’rats, and competent financial planning is not really in their DNA.
That, alas, sounds like the most probable course of action; protecting their phoney-baloney jobs today, and worrying about tomorrow next week.
This is one of the most infuriating statements I have ever read!
As others pointed out, oil company stocks are soaring, and this deprives the pension-fund from benefiting from this boom.
But, worse IMHO, the kicker is that if they DO win, and these companies’ stock prices were to drop, then they are virtue signaling with their “safeguarding” rhetoric about “sustainability” and “the planet” when in fact they just want to protect those already wobbly pension funds from cratering or going belly up due to their lawfare shenanigans.
Disgusting. On so many levels.
I’m looking forwards to all emergency services in particular eschewing gasoline and diesel-powered vehicles to do their job, and utilising electrical vehicles or the subway to attend fires, heart attacks or pursue criminals. An alternative would be bicycle power, and this would probably mandate recruiting teams of Olympic cyclists for the police pursuit squad. The number of bicycles hooked up to tow a fire brigade extensible ladder trailer would be also impressive.
New York should also put sin taxes on any product incorporating components derived from fossil fuel to be consistent. Electricity especially, but anything containing aluminum or iron would qualify too.
Replacing the organic black blob, with the intermittent, nonrenewable green blight? Good luck. However, China may stop participating in your environmental arbitrage schemes, and regulatory arbitrage, and labor arbitrage, too.
China has already said that it will only cut back its carbon dioxide emissions after its carbon dioxide emissions have peaked, essentially saying it won’t emit more carbon dioxide after it stops emitting more carbon dioxide. Therefore it is in China’s interest to never ever peak in emissions as well as an incentive to enormously grow those emissions for as long as it can because that will be the benchmark that post-peak reductions are assessed against. The Global Warming crowd seems fine with this almost meaningless commitment as long as it can claim that China is participating in the carbon dioxide reduction scheme.
Energy companies being sued should simply sign an Assurance of Voluntary Compliance to no longer provide NYC with energy. When tens of millions of NYC residents are freezing at home, can’t get to work, and see that only fat communist politicians are flying through the streets, maybe, just maybe, a hand full of liberals will begin to think ‘Hey, wait just a minute.’ The more income, savings, assets, retirements, friends, futures, and weight they lose, the more likely they’ll begin to question the democrat party.
Just as with the state lawsuits against tobacco companies in the 90’s, this isn’t an honest attempt to recover costs, it’s a shake-down.
In both cases, the states/cities are (ab)using the courts to achieve control and extract money, despite the fact that there is a more proper mechanism for doing that — TAXES. And also passing laws.
During the tobacco wars, one of the claims by the suing states was that tobacco use imposes additional financial burdens on states through illnesses that have to be paid by Medicaid, etc. etc.
It never seemed to occur to them that the intended remedy for such externalities is to raise taxes on the item and use those tax revenues to pay for the incurred costs. Or heavily regulate or just ban the item entirely if it’s allegedly that detrimental to the state or its citizens.
Instead it’s, “we didn’t tax you guys enough, and don’t have the stones to tax you more now, so we’ll just abandon our legislative duty and sue y’all to rake in some cash.”
If NYC really wants to be serious, let them ban petroleum products in the city, or insanely tax them.