Issues & Insights

Suing Oil Companies: It’s Not About the Environment

Editor’s note: This has been excerpted with permission from the Pacific Research Institute. To read the entire report, click here.

In late May, a panel of federal judges resurrected a couple of previously dismissed climate change lawsuits filed by San Francisco and Oakland, and also allowed six other community-based suits to go forward. The plaintiffs aren’t concerned with the environment, nor are they interested in justice. Their aim is to secure a plentiful cash flow for their governments.

Four years ago Heritage Foundation scholars were warning that lawsuits against oil companies were “nothing more than an old-fashioned, political mob shakedown of a deep-pocketed industry for money.” A secondary goal was “to get energy companies to stop giving money to free-market institutions that the left doesn’t agree with.”

The California climate lawsuits, filed by the cities of San Francisco, Oakland, Richmond, Santa Cruz, and Imperial Beach, and San Mateo, Marin, and Santa Cruz counties, are scarcely
different from the lawsuits filed against tobacco companies in the 1990s. That litigation wasn’t intended to snuff out smoking and improve health — it was a squeeze, “no better than extortion,” Cato Institute scholar Robert Levy wrote two decades ago.

“The playbook is well known,” says Jennifer C. Braceras, director of the Independent Women’s Law Center. “Find a public health crisis; target the deep pockets of the manufacturers of
a legal product; and extort enormous settlements, while also imposing strict new rules on legal activity.”

The 46 states that sued the tobacco industry settled with the defendants in 1998. The manufacturers agreed to cough up $246 billion over the next 25 years just to get things started on a plan in which they make payments in perpetuity. Through 2017, the companies had paid almost half, nearly $120 billion, to the states and territories that were parties to the master agreement, and more than $25 billion to the four states that set up separate arrangements.

Accounts at the time said the lawsuits were brought to force the industry to pay for the health issues caused by tobacco so state governments wouldn’t have to. But once politicians get their hands on money, previously stated objectives are forgotten.

To continue reading, click here.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

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1 comment

  • California Continues to Inflict More Costs onto the Energy Used by Residents – Rather than reducing demand, the state imposes more costs on the supply. Importing the jet, diesel and gasoline fuels, and the derivatives from petroleum that are in the thousands of products used in our daily lives to meet the demands of the 5th largest economy in the world are more expensive than in-state manufacturing. Yet, lawmakers continue to add more laws, regulations, and litigation against the in-state suppliers. These extra costs onto the suppliers continue to be borne by the consumers that are already paying the highest cost for energy in the nation.

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