MONITORING A GROWING STORM: The Implications of Climate Change Litigation on Insurers

• Published in: The Brief (Chicago. 1980) 2023-01, Vol.52 (2), p.30-36
• Main Authors: Steinke, Douglas J, Sanders, Erica R
• Format: Article
• Language: English
• Subjects: Actions and defenses; Climate change; Electric utilities; Energy industry; Exemplary damages; Global temperature changes; Insurance coverage; Law schools; Litigation; Nonprofit organizations; Petroleum industry; Property and casualty insurance industry
• ISSN: 0273-0995; 2163-0178

Lawsuits Targeting Petroleum Companies as a Cause of Climate Change In one such case, the New Jersey City of Hoboken commenced an action against a dozen companies in the energy sector, including Chevron, Shell, BP, ExxonMobil, Royal Dutch, ConocoPhillips, and American Petroleum Institute.4 The suit claims that these entities contributed to climate change through their production of fossil fuels.5 The city alleges that this activity has caused it to experience severe storms with increasing frequency, including, for example, Hurricane Sandy.6 The city claims that to mitigate the effects of these storms, it has developed a $500 million "adaptation and mitigation plan" to combat the effects of storms and flooding.7 The complaint brings claims sounding in negligence, nuisance, and violation of the New Jersey Consumer Fraud Act for misrepresentations made by the defendants as to the effects of their fossil fuel activity.8 Though the complaint does not seek a specific amount of damages, it claims compensatory, consequential, and punitive damages. In October 2022, the State of New Jersey filed a similar lawsuit against the same defendants named by the City of Hoboken.9 Similar to the suit brought by Hoboken, this suit alleges that ExxonMobil, Shell, Chevron, BP, and ConocoPhillips engaged in a campaign to conceal the effects of their activities on the environment and also hid their knowledge of these effects.10 Specifically, the state alleges that since the 1950s, the defendants knew that their fossil fuel emissions would cause the environmental harm taking place today, yet intentionally misled the public about this fact.11 The complaint alleges that the activities of these entities have caused flooding, extreme weather, and rising sea levels, which have greatly damaged the state's businesses and residents.12 The complaint asks that the court issue an injunction prohibiting the companies from continuing their deceitful communications with consumers and residents as to the harmful impacts that fossil fuels have had on the state.13 The complaint also seeks compensation, claiming that New Jersey taxpayers will be burdened by the billions of dollars the state must expend to remedy past environmental damage and to prevent future environmental damage related to storms and flooding.14 Also, similar to the complaint filed by Hoboken, New Jersey alleges violations of the Consumer Fraud Act, negligence, trespass, nuisance, and impairment of the public trust.15 In another ca