Legal Alert

No En Banc Review by Fifth Circuit in Comer

Landmark Climate Change Lawsuits Headed to U.S. Supreme Court Sooner Than Expected?

On April 30, 2010, the U.S. Court of Appeals for the 5th Circuit, via its clerk in a letter to all counsel of record, announced the cancellation of en banc oral arguments previously scheduled for May 24, 2010, in the landmark climate change lawsuit Comer v. Murphy Oil. The letter stated:

“The parties are hereby notified that since the en banc court was constituted, new circumstances have arisen that make it necessary for another judge to recuse, leaving only eight members of the court able to participate in the case. Consequently, this en banc court has lost its quorum, precluding the court from acting on the merits of the case. Accordingly, arguments scheduled for May 24, 2010, are canceled. Further notification to the parties will follow.”

It is not known which judge made the latest decision to recuse and why. Seven members of the court (Jones, King, Wiener, Garza, Benavides, Southwick and Haynes) had previously recused themselves from the case.

On May 3, 2010, four defendants filed a motion suggesting that the court was misreading the rule regarding a quorum, and that the court continued to have a quorum regardless of the new recusal. Alternatively, these defendants asked that the district court’s judgment remain the controlling law of the case, rather than the panel’s decision. On May 6, 2010, nine more defendants filed a similar motion, adding as an additional argument that the recused judges should reconsider whether recusal is really necessary.

On May 6, 2010, the court sent a letter of advisement requesting supplemental letter briefs on the issue be filed no later than 5 p.m. on May 12, 2010, to be followed by opposition letter briefs due to be filed no later than 5 p.m. on May 17, 2010.

Comer v. Murphy Oil involves a lawsuit by Mississippi property owners against numerous oil, coal, and chemical companies, alleging that the defendants’ activities contributed to climate change and magnified the effects of Hurricane Katrina. The district court dismissed the suit on political question and standing grounds, but on appeal, a panel of the 5th Circuit reversed on Oct. 16, 2009, holding that the plaintiffs did have standing, and that the political question doctrine did not apply. The defendants filed a petition for rehearing en banc, which was granted Feb. 26, 2010.

On March 5, 2010, the U.S. Court of Appeals for the 2nd Circuit denied defendants’ petition for rehearing en banc in Connecticut v. American Electric Power. This case was originally filed in 2004, and involved eight states and New York City suing five electric utility companies alleging under a public nuisance theory that the defendants had contributed to global warming with their greenhouse gas emissions.

The district court had dismissed the suit on political question grounds in 2005. On appeal, a two-judge panel reversed the lower court ruling on Sept. 21, 2009, holding not only that the district court erred in dismissing the case on political question grounds, but also that all plaintiffs have standing, plaintiffs have stated claims under the federal common law of nuisance, and plaintiffs’ claims are not displaced by federal legislation.

There are several significant implications as a result of the 2nd Circuit’s denial of rehearing en banc in American Electric Power and the 5th Circuit’s decision that it does not have a quorum to rehear the Comer case en banc (assuming it stands).

First, the full 5th Circuit in Comer was widely expected to affirm the district court’s ruling, thereby creating a circuit split with the 2nd Circuit on the issues of political question and standing in climate change litigation. Without an en banc decision from the 5th Circuit in Comer, there would be no circuit split, making it less likely that the U.S. Supreme Court would accept certiorari.

Second, the mass recusal of members of the 5th Circuit in Comer begs the question as to whether such recusals would be an issue for the U.S. Supreme Court as well. Initial analysis suggests it would. Justice Samuel Alito has recused himself on several occasions from cases involving ExxonMobil due to his ownership of its stock. See, e.g., Exxon Shipping v. Baker; American Isuzu v. Ntsebeza. Likewise, Justice Steven Breyer has recused himself from cases involving BP due to his ownership of its stock. See, e.g., New Jersey v. Delaware; Morgan Stanley Capital Group v. Public Utility Dist. 1. Both ExxonMobil and BP are defendants in the Comer suit.

Similarly, Justice Sonia Sotomayor would also likely recuse herself due to her participation in the Connecticut v. American Electric Power case when she was on the 2nd Circuit. This is true even as to Comer, since the issues presented in Comer and American Electric Power are so similar. Therefore, it is likely that Justice Alito, Justice Breyer and Justice Sotomayor would recuse themselves from the decision of whether to grant certiorari as well as any merits decision.

This would leave the Supreme Court with the minimum quorum of six. If one more justice was forced to recuse, then the U.S. Supreme Court would be unable to decide the merits even if it wanted to. This is not unheard of in the U.S. Supreme Court, and recently occurred in the case of American Isuzu Motors v. Ntsebeza in 2008, when four justices recused themselves.

Though the conventional wisdom is that the U.S. Supreme Court will almost certainly grant certiorari in Comer, American Electric Power, or both, it is far from certain that this will occur given the probable lack of a circuit split and the multiple recusals by members of the U.S. Supreme Court. Indeed, it may not even be possible for the U.S. Supreme Court to hear any appeal in Comer.

Finally, it is not outside the realm of possibility that both Comer and American Electric Power will be back in front of the district courts from whence they came by late summer or early fall. American Electric Power is already past the motion to dismiss stage, so theoretically, discovery could commence immediately in that case, giving the world a first glimpse of what climate change discovery will look like. Comer will likely still be subject to 12(b)(6) motions as alluded to by the 5th Circuit panel, but given the result in American Electric Power, the court may allow the suit to proceed.

Regardless, these recent events bear watching as climate change litigation continues to threaten corporate defendants. For more information and an extended discussion about these developments, please tune into a complimentary webinar hosted by McGuireWoods LLP on May 13, 2010, at 1 p.m. (ET) titled “Nuisance: How It Has Become A Chief Threat to Corporate Defendants and How to Defend Against It.”