Illustration by Robert Fresson

Venue of last resort

Wave of climate lawsuits threatens the future of Big Oil

Fossil-fuel interests are working to seed the courts, long viewed as apolitical

Illustration by Robert Fresson

In early October, 22 state and federal judges hailing from Honolulu to Albany got a crash course in scientific literacy and economics.The three-day symposium was billed as a way to help the judges better scrutinize evidence used to defend government regulations.

But the all-expenses-paid event hosted by George Mason University’s Law & Economics Center in Arlington, Virginia, served another purpose: It was the first of several seminars designed to promote “skepticism” of scientific evidence among likely candidates for the 140-plus federal judgeships President Trump will fill over the next four years.

Louis Anthony “Tony” Cox Jr.
Robert Fresson

The lone science instructor was Louis Anthony Cox Jr., a risk analyst with deep industry ties whose recent appointment as chair of the U.S. Environmental Protection Agency’s Clean Air Scientific Advisory Committee drew condemnation in public-health circles. Since 1988, Cox has consulted for the American Petroleum Institute, a lobby group that spent millions to dispute the cancer-causing properties of benzene, an ingredient in gasoline, and is now working to discredit the science on smog-causing ozone. He’s also testified on behalf of the chemical industry and done research for tobacco giant Philip Morris.

For a $4,000 honorarium, Cox delivered two closed-door lectures at George Mason: “a primer on the scientific method,” followed by a session aimed at “understanding what science can and cannot do.”  Included in his presentation were slides urging judges to be wary of EPA science on fine particles — a pollutant he has been researching for API. 

The symposium included a “mandatory” dinner at Capitol Hill’s upscale Charlie Palmer Steak, whose website says it “moves the political power meetings out of the back room and into private dining spaces.” Events such as the symposium are one way Big Oil is trying to impart free-market values to judges and attorneys general as the industry gears up for legal battles on multiple fronts.

Based in George Mason’s Antonin Scalia Law School, the Law & Economics Center espouses a free-market approach to policy. A 2013 investigation by the Center for Public Integrity found that the libertarian think tank hosted more judicial conferences than any other university program in the nation, fueled by conservative and big-business donors. Over the past two years, roughly $4.5 million of $18.6 million in contributions to the Law & Economics Center came from oil and gas interests, including Koch Industries, ConocoPhillips, ExxonMobil and API, which represents more than 650 corporations.

The center claims to have trained more than 5,000 state and federal judges, including three sitting Supreme Court justices. Almost 1,000 state attorneys general and their staff attorneys have attended its programs. Its advisory board includes three judges on the U.S. Court of Appeals for the District of Columbia Circuit, widely considered the nation’s second-most powerful court and, often, the final arbiter for federal administrative law cases.  

In a White House riven by discord and staff departures, judicial appointments have been a bright spot.  Senate Republicans have embraced the chance to fill a glut of vacancies, helping Trump install more conservative judges and potentially transform the legal landscape for decades to come. Once confirmed, a federal judge can serve for life, presiding over an average of 500 to 600 cases a year. 

A Washington trade group with 300-plus employees, API has spent more than $40 million to lobby Congress since 2013. But the courts have also been a focal point for API, which has spent the better part of a century helping the oil and gas industry pivot from being a prime antitrust target to being a proactive litigation force. The institute, along with other free-market trade groups, has routinely injected itself into cases in an attempt to shape policy or stall government initiatives. API officials did not grant interview requests from the Center for Public Integrity.

“Time is on industry’s side.”

With a new era of environmental deregulation under way, issues ranging from the Obama administration’s Clean Power Plan to offshore drilling in the Arctic are landing in the courts for final say. The stakes are enormous for the industry, which is simultaneously confronting a wave of lawsuits that seek billions of dollars in damages for climate-change impacts. Among the defendants are API members such as ExxonMobil.

Unlike government and the public, industry can afford to wait. “In many of these matters, litigation goes on decades and decades,” said Michael Gerrard, director of Columbia University’s Sabin Center for Climate Change Law. “Time is on industry’s side.”

American Petroleum Institute, et al.

Time has worked to API’s advantage. The institute was founded in 1919 amid congressional demands to nationalize the oil industry during World War I, forcing competing companies to band together for survival. In the near-century since, API has helped thwart regulations by tying them up in court.

An exterior shot of the Lenexa Federal Records Center, an annex of the National Archives and Records Administration.
Center for Land Use Interpretation (licensed CC NC-SA)
Archives at the Lenexa Federal Records Center are located 60 feet below ground in limestone caves.
NARA

Buried in limestone caves 60 feet below Lenexa, Kansas, is an esoteric slice of API history. Yellowing records at the National Archives annex there are all that remain of a 1940 lawsuit so expansive that three pages of the complaint simply list defendants — all 379 of them.

United States of America v. American Petroleum Institute, et al. alleged widescale collusion and price-fixing by 22 major oil companies and their 300-plus affiliates, which controlled a total of $9 billion in assets (the equivalent of $160 billion today). The U.S. Department of Justice charged that the industry was unlawfully consolidating — with the institute’s help — and vowed to take the antitrust case all the way to the Supreme Court. 

“The industry is dominated and controlled by the 22 defendant majors who transact more than 85 percent of the total business of the industry,” the Justice Department wrote in its complaint. “Where normal competition once flourished, the rapid development of the completely integrated defendants has substantially destroyed competition.”

American Petroleum Institute, et al. never made it to trial. The case was neutered early on by 11 oil executives working closely with the White House to ensure an Allied victory in World War II. The executives — nine of whom were affiliated with defendant companies — asked the attorney general to strike from the complaint a provision that would have forced companies to divest assets such as pipelines. This, the men warned, could hamper the war effort and “becloud relationships between the government and industry.”

After languishing in the courts for years, the lawsuit was dismissed in 1951 by the Justice Department, which found it to be a logistical nightmare. Gone, too, was the government’s interest in dissolving API as a monopolistic tool of industry. This year, API wriggled out of public scrutiny once more. In yet another potentially landmark case, lawyers suing the U.S. government for inaction on climate change tried to compel the institute to turn over decades of internal records. API had joined the case to help defend the government but dropped out rather than reveal what it knew about global warming, and when.

“They're a highly sophisticated, integrated political operation,” said Bob Brulle, an environmental sociologist at Drexel University. API’s effectiveness, Brulle said, lies in its partnerships with like-minded groups such as the American Chemistry Council, the National Association of Manufacturers and the U.S. Chamber of Commerce — amplifying its message “in a very directed, coordinated way.” In 2016, the institute absorbed its only real competitor, America’s Natural Gas Alliance.

With ample resources at their disposal, groups such as API — which employs a full-time legal staff and can also tap into the legal teams of its member companies — can quickly blunt federal regulatory efforts or simply wait for the political winds to change.

On November 30, 1999, for example, representatives of more than 20 lobby groups met at the institute’s Washington, D.C., headquarters to muster opposition to an EPA plan to regulate greenhouse gases under the Clean Air Act. Leading the meeting was API lobbyist Phil Cooney. In a memo, the institute offered to coordinate on the alliance’s behalf, pushing out the message to politicians and the news media. But by 2001, the political climate had changed. Cooney had become head of environmental policy for George W. Bush’s White House, where he altered federal reports to sow doubt on climate change. Under Bush, the EPA retreated from its earlier position, claiming it didn’t have the authority to regulate greenhouse gases after all. Cooney could not be located for comment.

The issue came to a head in 2003 when 12 states sued the EPA to force its hand. Coming to the agency’s defense was the CO2 Litigation Group, a newly formed coalition of 14 trade associations — including API.  The coalition represented a spectrum of fossil-fuel companies, which argued that the EPA had “oversimplified” and overstated the certainty of climate change’s effects.

The case, Massachusetts v. EPA, was decided in the states’ favor by the Supreme Court in 2007. But the matter continued to be tied up in the courts and the EPA bureaucracy, and it wasn’t until 2011 that the agency finally began regulating greenhouse gases. This gave rise to Obama’s 2015 Clean Power Plan, which targeted carbon dioxide emissions and became mired in litigation before the Trump administration marked it for extinction.

‘Irreparably harmed’

The back-and-forth of politics can be dispiriting. For that reason, James Hansen has staked his family's future — and the planet’s — on the courts. His granddaughter, Sophie Kivlehan, is one of 21 child and teenage plaintiffs in Juliana v. United States, a 2015 lawsuit that faults the government for failing to address climate change over half a century.

Dr. James Hansen, Columbia University
YouTube
Sophie Kivlehan, granddaughter of James Hansen
YouTube

“What we want is a plan — just for the government to have a plan,” said Hansen, a former NASA scientist who now directs the Earth Institute at Columbia University and is acting as a scientific expert in the case. Last year, industry groups including API became parties to the case.

It was Hansen’s congressional testimony as director of NASA’s Goddard Institute for Space Studies in the sweltering summer of 1988 that elevated global warming from simmering concern to boiling reality. With “99-percent” certainty, Hansen explained that the trend was a side effect of fossil-fuel combustion that would worsen without swift action. Months later, a group that would come to include 170 scientists from 25 countries united to confront what it called “the greatest global environmental challenge facing mankind.”

When Hansen returned to Capitol Hill in 1989, he found his testimony heavily edited by the White House Office of Management and Budget under President George H.W. Bush. The office softened his conclusions, tacked on a paragraph qualifying his findings and otherwise stirred uncertainty about man-made causes of climate change.

While many have focused on what, and when, companies such as ExxonMobil knew about climate change, Julia Olson — a lawyer with Our Children’s Trust, a legal aid group representing the Juliana plaintiffs — is making a case for government complicity.

After years of litigating environmental cases, Olson realized she was dealing with symptoms of a disease,  not the disease itself. “We were just playing a game of Whac-a-mole. One new part of our fossil fuel energy system would pop up, and we’d challenge it, and then it’d pop up somewhere else.”

She turned her attention to the government, which “chooses the winners and losers” and has long abetted fossil fuels, she said, allowing the industry to drill, mine and build. “Everyone wants Exxon to be the enemy,” Olson said, but, “every administration has made that decision to perpetuate fossil fuels.”

After digging through presidential archives, her researchers found what they believe is the earliest White House reference to climate change: a 1961 letter from Sen. Clinton Anderson of New Mexico to President John F. Kennedy, recounting a meeting a day earlier at which they discussed a Fortune article warning of sea-level rise from a warming climate.

Lyndon B. Johnson was the first president to publicly acknowledge such warming. In a speech in January 1965, he described how “a steady increase in carbon dioxide from the burning of fossil fuels” was permanently altering the planet. By year’s end, his science advisory board had delivered a detailed report on the “invisible pollutant” capable of melting ice caps and raising sea levels.

Despite these early warnings, little has been done, Olson said. Since Hansen’s 1988 testimony, there have been more excessively hot years than at any other time on record. Two international accords tackling climate change have been brokered, with the United States conspicuously absent on both.

Though not named in Juliana, API , the National Association of Manufacturers and the American Fuel & Petrochemical Manufacturers quickly intervened in the lawsuit, asserting their right to protect their members’ economic interests. The move awkwardly put the fossil-fuel groups on the same side as the Obama administration.

Their involvement in Juliana was short-lived. In late February, plaintiffs filed a detailed 21-page discovery request for API alone, seeking decades of internal communications, policies and reports related to climate change. By late June, all three trade groups had exited a case they had voluntarily joined. A judge allowed them to drop out after they were unable to agree on the causes and effects of greenhouse gases. Sen. Sheldon Whitehouse, D-R.I., suspects the groups “fled to avoid having to make the disclosures.” A vocal supporter of the Juliana action, Whitehouse believes the courts will hold industry accountable. “You have a judge and you have sanctions for not telling the truth, and that is a combination that for decades the fossil fuel industry has sought to avoid like Kryptonite."

Other climate-related lawsuits have followed Juliana, which is set for trial in 2018. Last summer, three California coastal communities filed suit against 37 fossil-fuel companies, blaming their greenhouse-gas emissions for rising sea levels. In September, San Francisco and Oakland became the first major U.S. cities to sue oil companies to cover past and future flood damage. In November, a Pennsylvania lawsuit alleged that the Trump administration is using “junk science” to roll back climate policies. A lawsuit pitting Portuguese schoolchildren against 47 European nations for failing to act on climate is in the works.

George Mason University’s Law & Economics Center is located in this Arlington, Va., building.
Ron Cogswell (licensed CC BY)

‘Unwarranted and exaggerated’

When Gregory Conko began organizing the October judges’ symposium at George Mason University, he wanted to ensure that participants left knowing science’s limitations. “Even good science cannot always answer the questions regulatory agencies ask,” he wrote to Louis “Tony” Cox, the risk analyst, in a May email obtained by the Center for Public Integrity through a records request. “Even the best science is not capable of yielding normative judgments about whether something is necessarily good or bad, safe or dangerous, etc."

Conko headed the Competitive Enterprise Institute — a libertarian think tank known for fostering climate-change denial — before joining Mason’s Law & Economics Center last winter. Before Conko settled on Cox to lead the seminar, Nancy Beck, a former policy director for the American Chemistry Council who is now the EPA’s top official on toxic chemicals, was a candidate, emails show. So was Michael Gough, a toxicologist with ties to the tobacco industry and oil-backed climate-change denial groups. Conko declined requests for an interview.

“Even good science cannot always answer the questions regulatory agencies ask.”

Like Beck and Gough, Cox has championed narratives amenable to industry’s bottom line but not supported by mainstream science. In 2015, Cox said that “no detectable public health benefits” would result from a stricter EPA ozone limit. His testimony was cited in an op-ed by API President Jack Gerard, who ended the column with a warning: “Economic recovery is far from complete, and saddling the nation’s job creators with burdensome new restrictions threatens to deal another blow to the middle-class economy.”

What Gerard didn’t mention was Cox’s history with the institute, which spans decades. At the time the column was published, Cox was receiving funding from both the institute and the American Chemistry Council, which also represents petrochemical companies.

In an interview, Cox denied that industry funding influences his findings. He criticized EPA science as flawed, saying it assumes links that haven’t been proven.

“I see a tremendous lack of clarity when agencies say there’s reason to believe X causes Y,” Cox said. “The proposition that the science is settled — ‘We don’t need to look at this’ — it’s a bad proposition.”

Cox holds a doctorate in electrical engineering and computer science and a master’s degree in operations research, which focuses on decision-making — both from MIT.

Asked about his involvement in the George Mason symposium, Cox said that “judges in particular should have a healthy skepticism, especially about claims of causality.”

Fellow risk analyst and friend Adam Finkel counts Cox among an elite few who have the credentials for risk analysis, an amalgam of health sciences, economics, policy-making and statistics. But their views on what should or shouldn’t be regulated couldn’t be further apart.

A former director of health standards programs at the U.S. Department of Labor’s Occupational Safety and Health Administration, Finkel has spent his career trying to strengthen worker protections against toxic substances. “It’s disappointing to me that someone as smart as he is can make such a stupid mistake,” Finkel, a senior fellow at the University of Pennsylvania Law School and a professor of environmental health sciences at the University of Michigan, said of Cox. “I don’t ascribe evil intent to him; he’s just lost his way.”

The weight of evidence, Finkel said, isn’t on Cox’s side. “He’s not just saying, ‘We should wait for the right answer.’ He’s saying, ‘We should be more protective of the economy than of human health.’”