Will litigation against big oil mimic big tobacco’s court battles?

Oil and gas majors’ alleged prior knowledge of fossil fuels’ contribution to global warming is drawing parallels with how the tobacco industry dealt with the harmful healthcare effects of its smoking products over the past three decades.

Climate litigation is gaining momentum on all fronts with claims being filed across jurisdictions by an increasingly diverse group of plaintiffs, against both companies and governments. There are now more than 2,000 climate lawsuits globally, according to the London School of Economics' Grantham Research Institute, with the majority of them targeting the enforcement of climate actions and commitments.

Oil and gas companies — and in particular, their future transition plans — have in recent years regularly been challenged in court for alleged corporate inaction over the climate emergency.

Although it is now widely undisputed that the extraction, production and use of fossil fuels have largely contributed to the warming of the planet, a more contentious issue is coming to the forefront in lawsuits against big oil.

Fossil fuel companies’ alleged prior knowledge of the harms their products cause to the climate has been increasingly documented by the scientific community over the past decade. Plaintiffs are now starting to use this argument in court as well, to hold fossil fuel companies accountable and force them to transition to clean energy sources as soon as possible.

The recent claim filed against Italian oil major Eni, by activist group ReCommon and Greenpeace Italy, aims to push the company to cut its carbon emissions by 45 per cent by 2030. The plaintiffs argue that internal research reports show Eni was well aware of the impact its products could have on the world’s climate, as far back as 1970.

The plaintiffs are reportedly seeking to replicate the 2021 ruling by the Hague District court, which stated that Shell, another oil major, would need to reduce its emissions by 45 per cent by 2030 compared with 2019 levels. Shell is currently appealing against the decision.

If the Italian courts — in the country’s first climate case — end up siding with the plaintiffs, that would be a “very significant legal development”, note Donald Braman, associate professor of law at the George Washington University Law School and David Arkush, climate program director at US non-profit consumer group Public Citizen.

The two experts recently wrote a research paper in which they analyse the notion of “climate homicide” as a legal tool to launch criminal lawsuits against big oil.

“Public documents show that the carbon majors had a far greater understanding of the link between fossil fuels and climate change, and that makes the conduct of fossil fuel companies far more culpable,” the two tell Sustainable Views via email. They add: “Had fossil fuel companies simply failed to disclose the catastrophic risks they foresaw but not gone so far as to mislead the public about those risks, the US — indeed most of the world — likely would have prioritised decarbonisation and building green energy alternatives decades ago, saving countless lives and trillions of dollars of health, resilience, and mitigation costs.”

Links with tobacco lawsuits

While the allegation — that fossil fuel companies have known for decades that their products would contribute to climate change impacts — is only in the early stages of being tested in courts, the development can be linked to how the tobacco industry dealt with the healthcare impacts of its smoking products.

The Tobacco Master Settlement Agreement was signed in 1998, resulting in large payouts by tobacco companies to US states with the goal of recovering the costs of medical treatments related to smoking diseases.

More recently, in 2017, tobacco companies in the US were forced to run (and pay for) ads that warned about the consequences of smoking. However, after 11 years of appeals, the companies were not obliged to admit any involvement in deliberately misleading the public through disinformation campaigns.

Progress that took plaintiffs and their counsel 30 years in the tobacco context has taken less than 10 in the climate litigation space

Center for International Environmental Law

According to Alex Cooper, a lawyer specialising in corporate, finance and climate change matters at the Commonwealth Climate and Law Initiative, there are similarities between big oil and big tobacco litigation, “particularly on the knowledge of the defendant companies as to the harms caused by their products, which civil society entities and researchers have done significant work on”. 

Cooper adds that “while there are differences in the complexity of the issue, and the impact this is likely to have on the legal arguments such as causation, it’s notable that very few climate cases involve disputing the underlying science of climate change”.

In a statement to Sustainable Views, the Center for International Environmental Law says that “at its heart, successful litigation requires a clear, simple, causal chain between a plaintiff or plaintiffs who can demonstrate a particularized harm, and the actions or inaction of one or more defendants who created or contributed to that harm”.

CIEL says the potential scale and scope of climate liability for oil and gas companies would be far greater than any of the tobacco settlements to date. “The future of the fossil fuel industry will be defined by litigation from a growing array of plaintiff classes based on an ever-expanding array of claims,” it warns.

That climate litigation will continue to be brought in cooperation among different stakeholders is also an opinion shared by the US Union of Concerned Scientists. The union’s accountability campaign director, Kathy Mulvey, argues that “climate litigation informed by robust science can and should work in concert with youth and indigenous-led direct action" and that it should also involve shareholder advocacy and divestment, investigations, public exposure as well as government policies "to hold fossil fuel polluters accountable, finance a just and equitable transition to clean energy, and limit the worst effects of climate change". 

In its note, CIEL also says that the climate litigation space has evolved much faster compared with the tobacco lawsuits from the late 1990s: “Progress that took plaintiffs and their counsel thirty years in the tobacco context has taken less than ten in the climate litigation space." It adds: "It took decades for tobacco cases to move from suits by individual smokers and their estates, to class actions, to litigation by state and local governments. In the climate context, by contrast, claims by cities, counties, and states have been filed alongside those by communities and individuals. Even more significantly, we’ve seen the emergence of a much wider array of plaintiff classes, from pension fund beneficiaries to investors.”

Still, what fossil fuel companies knew and when they knew it will matter a great deal for climate lawsuits using that legal argument, say Braman from George Washington University Law School and Arkush from Public Citizen.

To assess fossil fuel companies’ criminal and civil liability, Braman and Arkush explain that judges and juries will likely be asked to answer a variety of questions. These could include for instance: “Are the ‘globally catastrophic’ risks described by the #ExxonKnew and #DirtyPearls documents [referring to investigations into ExxonMobil and Shell, respectively] ‘substantial and unjustifiable’ enough to trigger criminal liability, or are the harms so ‘insubstantial or justifiable’ as to warrant only civil liability?" or “Did fossil fuel companies ‘know’ of those risks, were they ‘reckless’ with respect to those risks, or were they merely ‘negligent’ about those risks?”

However, Braman and Arkush say they doubt fossil fuel companies will want to reach a final court ruling, and would instead prefer settling climate lawsuits, as in the case of the tobacco master settlement agreement. “The terms of those settlements should be front of mind for district attorneys and attorneys general across the United States,” they add.

Mulvey from the Union of Concerned Scientists adds it is possible that litigation will reach a point where oil and gas companies will be forced to pay for their alleged past denial of climate change, in a similar way in which big tobacco was forced to pay back tobacco-related healthcare costs to US states. “Like big tobacco, major fossil fuel corporations have privatised the profits of their business model while socialising the costs — and in the case of climate change, those costs are astronomically high,” she says. 

Two US lawsuits alleging deceptive advertising campaigns by fossil fuel companies are in the process of going to trial. One involves the state of Massachusetts against ExxonMobil, the other was filed by the city of Honolulu against several oil and gas groups. ExxonMobil, Shell and Eni have been contacted for comment.

Future outlook

Experts agree that climate lawsuits are seen as having broader impacts than just on the parties directly involved.

Oonagh Sands, counsel at law firm Fietta, says the subject matter of climate litigation is such that developments — even before a final ruling — are monitored closely across multiple jurisdictions and by civic society. She mentions that, increasingly, more attention is being devoted to establishing the international crime of “ecocide” under the Rome Statute of the International Criminal Court. 

The term was defined by a group of experts as “unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe and either widespread or long-term damage to the environment being caused by those acts”. Sands argues that in the proposed definition, “knowledge” would be considered an element of the crime and that the aim of defining the crime is to protect nature itself, and not just humans.

CIEL says that an “inflection point” in climate litigation has been reached in the past few years, as a growing number of lawsuits are aiming to hold companies accountable not only for the present impacts of past conduct, but also for the ways in which their present and future business plans might fail in limiting climate change impacts and associated harms.

Cooper from the Commonwealth Climate and Law Initiative also notes that litigation taking place today may already be shaping public and political discourse, with some lawsuits seeking compensation for adaptation measures.

The lead scientist for the science hub for climate litigation at the Union of Concerned Scientists, Delta Merner, agrees. “Climate litigation is shaping climate action today,” she says.

Cooper concludes that “while litigation may not prevent emissions taking place today, it may provide financial redress to help build a climate-compatible society".