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NU Online News Service, Sept. 21, 12:07 p.m. EDT
NEW YORK—Companies sued for creating damage by contributing to global warming have a major defense available against such charges, according to an attorney at a legal session for policyholders.
The remarks were made last week by Finley Harckham, a senior litigation shareholder in the New York office of Anderson Kill & Olick and president of Anderson Kill Insurance Services, LLC at the law firm’s 12th Annual Policyholder Advisor Conference.
He explained that plaintiffs need to establish two levels of causation. They must prove that something has happened to the environment other than what would have happened naturally, and that the defendant is responsible for that action.
“It’s a huge hurdle,” he said, noting that a lawsuit would have to distinguish why a given condition was caused by a single entity as opposed to greenhouse gases emitted by the population at large.
Still, the Anderson Kill panel noted that one case worth watching is Native Village of Kivalina v. Exxon Mobil, et al., in which an Inuit village in Alaska has brought a nuisance suit in February 2008 against major oil companies.
The plaintiffs are seeking joint and several liability for nuisance and civil conspiracy, claiming that the oil companies’ contribution to global warming has caused melting ice which will lead to the eventual flooding of their village.
The case was brought in California. John Nevius, a shareholder in the New York office of Anderson Kill, said a motion to dismiss was filed in June 2008 in Virginia. He said the insurance company defending the suit has cited the pollution exclusion in its motion.
States have also brought global warming lawsuits, and Mr. Nevius said this is similar to tobacco litigation, where states try to offset their losses by suing those they see as responsible for causing the conditions.
Two cases he cited are Connecticut v. American Electric Power—where eight states and New York City brought a nuisance suit against five electric utility companies; and California v. General Motors Corp.—where Calif. sued six major automakers seeking damages for global warming.
California cited injuries including melting snow pack, a greater risk of flooding, loss of coastline and more days of extreme heat.
The court said it lacked jurisdiction over the suit, citing the “political question doctrine.” Mr. Nevius said the court drew the line in this case and decided not to get into regulating global warming.
But if the courts are avoiding the political question, they may not be avoiding the scientific question. The U.S. Supreme Court ruled in 2007 that carbon dioxide is a pollutant and that the Environmental Protection Agency has the jurisdiction to regulate CO2 emissions.
What this means for policyholders and insurers is still unclear. The panel said future litigants could include island states, coastal residents, drought-prone communities, Southern states, and shareholders and investors.
They could make global warming claims associated with property damage and relocation, water shortages and agricultural damages, increased diseases, and even their own existence.
The panel noted that environmental insurance policies (PLL policies) could be a possible coverage solution for policyholders. While many policies require proof that the pollutant originated from a “covered location,” which could be a hurdle for coverage, other PLL policies available in the marketplace do not contain this provision. These policies, such as the AIG Commercial PLL Form, “only look at whether the insured is liable for ‘pollution conditions,’” a slide presented by the panel stated.