The modern environmental movement is plagued by a long list of absurdities and contradictions: anti-plastic groups that lobby against recycling; climate activists who oppose carbon-free energy. “Green” politicians who subsidize electric cars that pollute the planet. The hypocrisy goes on seemingly forever, but one of the most egregious examples involves state and local governments that are purporting to fight climate change by suing oil companies for selling them affordable energy.
More than two dozen jurisdictions have taken the oil industry to court on these dubious grounds, and the list of plaintiffs is poised to grow with Michigan signaling its intent to file suit against several major energy producers, and possibly its own utilities.
In May, the state’s attorney general Dana Nessel announced that she was seeking proposals from law firms to help her sue the oil and gas industry, selecting three firms to assist in her crusade by the end of September. “Pursuing this litigation will allow us to recoup our costs and hold those responsible for jeopardizing Michigan’s economic future and way of life accountable,” she wrote.
That sort of moralistic language makes for a compelling press release, but it doesn’t capture the essence of the state’s lawsuit: namely that it’s a corrupt, hypocritical enterprise funded by ideological billionaires and shady investors with no regard for Michigan’s welfare.
Michigan’s energy hypocrisy
As The Firebreak has extensively reported, everything about this litigation is absurd—particularly the fact that all the plaintiffs without exception are utterly dependent upon fossil fuels. There isn’t a city or state in this country (or on this planet) that could function without access to abundant, affordable energy, most of which is supplied by the oil and gas industry. If any jurisdiction proves the point, it’s Michigan.
Detroit–“America’s Motor City”–is synonymous with the automotive industry. Sixty of the top 100 auto manufacturers are headquartered in Michigan and 90 have a presence in the state, where they employ more than a million people who produce nearly 20 percent of the vehicles America manufactures. All of these cars run on fossil fuels. That includes electric vehicles that are charged by America’s coal- and natural gas-powered energy grid.
Michigan is also home to a sizable oil industry that employs an estimated 228,000 people and contributes $30 billion to the state’s economy, more than five percent of its gross domestic product. In effect, then, Dana Nessel is taking her own constituents to court to protect them from the environmental degradation they have brought on…themselves.
Joining the Sher Edling machine
This clear absurdity is, of course, our first clue that the litigation has nothing to do with protecting “Michigan’s economic future and way of life,” regardless of Nessel’s self-righteous declarations. Instead, the lawsuit is part of a larger effort to punish the energy sector until it goes bankrupt or stops producing fossil fuels.
This climate litigation conspiracy–what we’ve dubbed The La Jolla Tobacconization Playbook–is not primarily focused on winning cases. It’s an activist PR campaign meant to destroy the energy sector by threatening unlimited, costly litigation—the same strategy that brought the tobacco industry to heel in the 1990s.
The nature of the scheme is undeniable when surveying the law firms selected to assist Michigan in its lawsuit. Hausfeld, a group of plaintiffs attorneys with extensive experience in environmental and product liability law, boasts that it was an early adopter of third-party litigation funding arrangements in which its “clients benefit from the strong relationships we have cultivated with reputable litigation funders worldwide.”
As a rule, “reputable litigation funders” fall into one of two categories. In the first we have billionaire-backed foundations that lavishly fund progressive political causes. Firebreak editor David Zaruk has documented this arrangement in reference to another firm assisting Michigan, Sher Edling:
“Most law firms will proudly state on their websites the billions they have won for their clients in lawsuits. Sher Edling does not … Sher Edling use their activist network to get foundations and trusts to fund their fees and costs. In other words, they do not have to win their cases against the fossil fuel industry or even go to trial.
They are being paid to file public nuisance cases, try to access internal industry documents, be disruptive and keep the public focus on these companies as being culpable for climate change. Their objective is reputational rather than judicial and as long as philanthropic foundations keep funding them, they will keep in the faces of these companies.”
Nessel let this awkward truth slip last spring when discussing her plans with the media. "This is going to be a massive discovery effort to find out exactly what our Michigan damages are … and what can we expect to see in the future as a result of climate change," she told The Detroit News in May. Naturally, she went on to compare her suit to the litigation filed against the tobacco industry.
In the second funding category are private lending organizations that finance law firms involved in mass tort litigation, often charging exorbitant interest rates or demanding large percentages of any final settlements. In fact, these lending organizations are sometimes operated by lawyers who are actively involved in the same litigation they are financing. Here, too, the goal is to file as many cases as possible, overwhelming the defendants and convincing them to settle for massive sums out of court.
Billion-dollar shell game
Perhaps the most important point is that this operation requires unmitigated deception. While Nessel and her “assistants” at Sher Edling give self-aggrandizing press conferences about holding “Big Oil” accountable, the funding mechanisms bankrolling their scheme are supposed to quietly operate under layers of bureaucratic secrecy—far away from public scrutiny that could raise questions about the ethics of using the judicial system to achieve political goals.
In the case of litigation finance, the lawyers are protected from disclosing their funding sources via attorney-client privilege or revealing to the plaintiff how much of any payout will go to these secret third-party funders. With regard to foundation funding, Zaruk has also noted that
“Many [foundations funding climate lawsuits] were created by other groups for single purposes and add an extra level of fog and deception. These groups received funding from a wide range of philanthropic groups … that knew full well that their funds would be redirected to a for-profit law firm… This then was used to draw in donations from other large foundations in a bandwagon effect: a few influential names twisting those holding the purse-strings to billions.
Beat the lawyers at their own game
It bears repeating that the only potential winners in this litigation are the lawyers and the network of foundation-funded NGOs and news outlets that amplify their legal crusade. Michigan stands to inflict serious damage on its economy, forcing its residents to pay higher energy prices and endure lower living standards as a result.
Fortunately, there’s a way forward—exposing these rotten lawsuits to the light and air of public scrutiny and beating them in court. One energy company has executed this strategy brilliantly in a lawsuit against Greenpeace USA. The NGO is now on the brink of bankruptcy, an outcome “Environmental leaders fear …would send a chilling message to their movement,” The Wall Street Journal recently reported. And what a glorious message it would be.
The alternative is to let Dana Nessel and her compatriots at Sher Edling control our energy use through the courts. Surely we can all agree the first option is the better one.