Belgium

Brussels Court of Appeal condemns the Belgian State and two of the country’s Regions for climate inaction

On 30 November 2023, the Brussels Court of Appeal held the Belgian Federal State and two of the country’s three Regions (Brussels-Capital and Flanders) liable for climate inaction, in a landmark judgment partially confirming the first instance decision of 17 June 2021 of the Brussels French-Speaking Court of First Instance (see our previous blog post).  

The Court ruled that by not taking all necessary measures to prevent the impacts of climate change on the Belgian population, the Belgian Federal State and the Regions of Brussels-Capital and Flanders breached Articles 2 and 8 of the European Convention on Human Rights and their general duty of care under Belgian law. By contrast, the Walloon Region’s greenhouse gas emission reductions have been sufficient to date, and Belgium’s third Region did not commit any fault.

The Belgian Federal State and the Regions of Brussels-Capital and Flanders were ordered to take appropriate measures, between themselves and in concertation with the Walloon Region, to reduce GHG emissions by at least 55% by 2030 in comparison to 1990 levels. At this stage, the Court deferred its decision on whether to subject its order to monthly civil penalties. Flanders announced that it would appeal the decision before the Belgian Supreme Court, whose review is limited to the correct application of the law.

It remains to be seen whether claims requiring the imposition of specific targets on Belgian companies or challenging their transition plans, similar to the Dutch Milieudefensie v. Shell case, could be supported by this case law. Although public authorities and private companies are in significantly different situations, activist organisations are likely to test these grounds before Belgian courts in the future (see our blog post for more details).

France

First decision on the French Duty of Vigilance Law rendered by a French Court on the merits of the case

On 5 December 2023, the Paris Judicial Court handed down its first decision on the merits under the French Duty of Vigilance Law, more than six years after its enactment in 2017. Prior to this, only four cases brought on the basis of the Duty of Vigilance Law had been ruled upon, but they were dismissed for procedural reasons. In the landmark decision, the Court upheld the claim of a trade union against the French state-owned postal company and ordered the latter to amend and supplement its vigilance plan. 

For the first time, a French court has set out its expectations with respect to: (i) risk mapping in the field of human rights and environment; (ii) the assessment of subcontractors; and (iii) the assessment of the effectiveness of measures taken under a vigilance plan. However, the Court dismissed the request for the implementation of precise and concrete measures to prevent risks. The latter are considered to fall outside the judges’ powers, as it cannot step into the shoes of the company and its stakeholders. 

The decision is immediately enforceable but is not final as it may be appealed to the Paris Court of Appeal and, possibly, to the French Supreme Court (Cour de cassation). For further information, read our blog post on the topic. 

Paris court rejects NGOs’ request to order the French state to take additional measures to repair ecological damage caused by carbon emissions

On 22 December 2023, the Administrative Court of Paris issued another significant decision in what has been called the “case of the century” (L’Affaire du siècle). In its previous rulings of 3 February and 14 October 2021, the Court had held the French state responsible for failing to meet the national carbon targets set in the aftermath of the 2015 Paris Agreement and ordered the state to take all appropriate measures to repair the consequent ecological damage and prevent further damage by lowering emissions. The NGOs leading the case applied to the Court once again in July 2023 and requested that additional execution measures be imposed on the French state and a 1.1 billion euro penalty payment be ordered, alleging that the state had not taken sufficient actions to comply with the Court’s injunctions. In its decision of December 2023, the Court rejected the NGOs’ request and held that the state’s actions were late but eventually sufficient to remedy the ecological damage caused by carbon emissions. For further information, read our blog post on the topic.

Criminal complaint filed by NGOs against French banks in relation to deforestation in the Amazon

On 8 November 2023, NGO Sherpa, supported by other NGOs and media, filed a complaint with the French financial prosecutor’s office against four major banks. Sherpa is calling for a criminal investigation on the grounds of money laundering and concealment, due to the banks’ alleged financial support (through the purchase of corporate bonds) for the main Brazilian beef companies that would contribute to illegal deforestation in the Amazon. This is the first criminal complaint against French banks based on the offences of laundering and concealment due to alleged financial support for activities linked to deforestation and associated profit. The NGOs’ complaint will now be assessed by the prosecutor’s office, which will decide whether to investigate the allegations.

Two French companies sentenced for violating the 2010 EU Timber Regulation

In September 2023, two French companies – including the French leader in timber imports – were convicted of breaching their duty of due diligence under the 2010 EU Timber Regulation, the penalties for which are set out in a 2014 French law. The two companies were convicted, in two different cases, of importing timber from Brazil without taking the necessary precautions to reduce the risk of illegal timber imports. They were each fined (EUR 20,000 for one and EUR 100,000 for the other) and ordered to compensate the prejudice suffered by the NGOs that lodged the criminal complaint in 2019, including Greenpeace France (EUR 23,000 for one and EUR 15,000 for the other). The two French tribunals also ordered the two decisions to be published in newspapers. Both companies have announced that they will appeal the decisions.

French Supreme Court confirms that French group can be charged for alleged complicity in crimes against humanity, but not for endangering lives

On 16 January 2024, the French Supreme Court (Cour de cassation) confirmed the indictment of a French cement group for complicity in crimes against humanity but ruled that the group could not be charged for endangering lives. 

In 2016, NGOs and several Syrian employees lodged a complaint against the group, alleging that the company was guilty of complicity in crimes against humanity and of endangering lives. The NGOs argued that the group paid, via a subsidiary, several million euros to terrorist groups and intermediaries in order to maintain the activity of its cement plant in Syria. The NGOs also argued that the group kept the plant running and its Syrian employees in place after the war broke out in 2011, despite significant security risks.

The group was indicted in 2019 on both grounds, which were later upheld in 2022 by the Paris Court of Appeal. In January 2024, the French Supreme Court confirmed the charge of alleged complicity in crimes against humanity – allowing the investigation to continue on this ground – but rejected the group’s indictment for endangering the life of its staff. The Court held in this respect that Syrian law, rather than French law, was applicable to the work relationship between the group and its Syrian employees.

Germany

Regional Court of Munich I rules on greenwashing in beer advertising

On 8 December 2023, Deutsche Umwelthilfe ("DUH"), a non-governmental environmental and consumer protection organisation, was successful in proceedings before Regional Court of Munich I, in relation to the misleading nature of a manufacturer’s claims of "CO2-positive" and "climate-neutral production" on beer bottles. The Court found that background information for these claims had to be disclosed on the beer bottle, and a failure to do so constituted misleading advertising.

The Court reasoned that a QR code on the bottle that leads to the manufacturer's website with further details is not sufficient if, as in the present case, there is no indication that further information is available on the website and the QR code does not lead directly to a page explaining the claims, but to the manufacturer's general website. In addition, the Court expressed doubts as to whether the information provided on the manufacturer's website was sufficient, as there was no precise information on the calculated carbon footprint, or information on the extent to which climate neutrality is to be achieved through compensation measures, including the extent to which it is to be achieved through savings.

Italy

Supreme Administrative Court directs Lazio region to adopt measures to protect Lake Vico from algal blooms

ClientEarth and LIPU filed a claim seeking to compel the Lazio region to adopt measures to ensure the protection of Lake Vico from massive algal blooms in order to avoid the deterioration of the lake waters. While the first instance court rejected the claim, the Supreme Administrative Court allowed ClientEarth and LIPU’s appeal, and ordered the Lazio Region to adopt measures to protect Lake Vico from algal blooms within sixty days.

Claimants allege that Italy’s National Energy and Climate Plan falls foul of the Aarhus Convention

On 4 August 2023, A Sud filed a communication against Italy alleging that Italy had not fulfilled its obligations under the Aarhus Convention when updating its National Energy and Climate Plan ("NECP"). The Committee, having heard the views of both the communicant and the Party concerned, observed that “Italy’s updated national energy and climate plan is currently still in draft form and will yet undergo a strategic environmental assessment procedure, including public participation, prior to the submission of the final updated plan to the European Commission in June 2024”. Accordingly, the Committee determined the communication to be inadmissible. 

Court finds law requiring municipalities to identify areas unsuitable for renewable energy plants unconstitutional

The Italian Constitutional Court has ruled unconstitutional a law that required municipalities to identify areas and sites that are unsuitable for the installation of renewable energy production plants. The Court found that the law infringed the principles laid down by the State legislature concerning the identification of unsuitable areas and sites, and that the possibility of imposing limits on the authorisation of the installation of renewable energy plants was in breach of the Constitution.

Italian Competition Authority turns its focus to environmental investigations 

On 10 October 2023, the Italian Competition Authority started an investigation against the National Consortium for the Management, Collection and Treatment of Used Mineral Oils (“CONOU”) to determine whether CONOU had abused its dominant position, in violation of Article 102 of the TFEU. CONOU is the legal monopolist of the recycling of hazardous waste represented by used lubricating oils, and is being investigated in relation to whether it has unjustifiably hindered the operation of two used oil regeneration plants with potential environmental benefits, to the advantage of the only two regenerators historically active in the Italian market and recognised by CONOU.

United Kingdom

English High Court rules that UK government’s decision to authorise new North Sea oil and gas licences was lawful, but claimants commence separate actions in Scotland’s highest civil court

The English High Court has ruled that the UK government’s decision to authorise new licences for oil and gas exploration in the North Sea was lawful. Greenpeace argued that the UK’s failure to assess the greenhouse gases produced by consuming oil and gas, the “end-use” or “downstream” emissions, was irrational and rendered its offshore energy plan unlawful. The UK government argued that while the government was not required to assess end-use emissions, they still considered them when making the decision. Greenpeace has said that it plans to appeal the ruling. 

Uplift and Greenpeace have also applied separately to Edinburgh’s Court of Session, Scotland’s highest civil court, for a judicial review of the decision to allow Norway’s state-backed Equinor and its partner Ithaca to develop the Rosebank oilfield in the North Sea. The claimants argue that the UK’s approval of the project violates its legal obligations to target net zero carbon emissions.

Shell sues Greenpeace for at least £1.7m in damages after environmental protesters occupy a Shell vessel 

Shell is suing Greenpeace for at least £1.7m in one of the largest-ever legal claims against the environmental group, after its protesters occupied a vessel for 13 days earlier this year. The lawsuit follows a protest in February when six Greenpeace activists boarded a ship in the Atlantic Ocean transporting a Shell floating production storage and offloading unit, FPSO, to the Penguins oil and gasfield, north-east of the Shetland Islands.

New civil sanctions regime comes into force that allows for the imposition of unlimited monetary penalties for environmental damage 

Unlimited variable monetary penalties (“VMPs”) can now be handed out for a wide range of environmental crimes. VMPs were previously capped at £250,000 and did not apply to offences that came under the Environmental Permitting (England and Wales) Regulations 2016. According to DEFRA, the penalties issued will be proportionate to the size of the company and the nature of the offence, and issued in line with Sentencing Council guidelines. Serious breaches of the law will continue to be subject to criminal proceedings.

Court of Appeal upholds the UK government’s approval of nuclear power project at Sizewell

In December 2023, the Court of Appeal upheld the UK government's approval of the development of a nuclear power station at Sizewell. The Court denied Together Against Sizewell C’s (“TASC”) application for permission to appeal a lower court's order, which refused TASC’s application for judicial review of the decision to approve the plant. Justice Linblom said Judge Holgate "correctly concluded that the secretary of state was entitled in this case to regard the project as the power station, and that the provision of a permanent water supply was not part of that project, but formed a different and separate project."

Court dismisses ClientEarth’s attempt to overturn decision by the UK financial regulator to sign off share prospectus

In November 2022, Ithaca Energy produced a prospectus as part of its initial public offering. ClientEarth argued that the firm did not go far enough in describing the climate-related risks faced by it, and that the FCA had therefore signed off the document unlawfully. After the High Court dismissed the claim in April 2023, ClientEarth renewed its claim. In December 2023, the High Court has since issued a fresh judgment dismissing the case. The Court found that the prospectus "plainly did address risks to Ithaca's business and securities arising out of climate change factors, associated regulatory measures and changes in consumer use" and that "FCA considered that the risk factors were adequately described". The Court found that while "the claimant disagrees with the FCA's evaluation” it had “failed to demonstrate any arguable error of law in the approach taken by the FCA or its conclusions". The Court also observed that “it is not part of the FCA's function, when approving a prospectus ... to evaluate the extent to which a prospectus may or may not promote climate change mitigation or net zero targets." 

Shell to face human rights claims in UK over alleged oil pollution in Niger delta  

The High Court has ruled that more than 13,000 Nigerian farmer and fishers from the Ogale and Bille communities in the Niger delta are entitled to bring legal claims against Shell for alleged breaches to their right to a clean environment. The Court found that it was arguable the pollution had breached the villagers’ right to a clean environment under the Nigerian constitution and the African charter on human and people’s rights. Claims under these rights have no limitation period. 

ASA ramps up enforcement action and begins deploying AI to sweep ads

The ASA has been busy ramping up enforcement action in the last quarter. The ASA has issued rulings against adverts published by three airlines Air France, Deutsche Lufthansa and Etihad, adding to two previous decisions against airlines. All three adverts referenced the airlines’ commitment to sustainability or the environment. In its findings, the ASA observed that air travel produces high levels of carbon dioxide (“CO2”) and non-CO2 emissions, which significantly contribute to climate change. It held that absolute environmental claims – those which make an unqualified statement about efforts to promote sustainability – must be supported by a “high level of substantiation”.

The ASA has banned a Toyota Hilux ad on the basis that it encourages “the use of vehicles in a manner that disregarded their impact on nature and the environment.” This seems to signal a departure from the ASA’s previous rulings, which have focussed on misleading advertisements, and a shift towards considering ads on the basis of whether they uphold a broader standard in the UK’s advertising code: that adverts be “prepared with a sense of responsibility to consumers and to society.”

The ASA is also undertaking a wide piece of enforcement work on climate change and the environment and it is using an Active Ad Monitoring system deploying AI to proactively search online ads and identify those that break the rules. As part of its work, it made two other rulings on green claims in December. Charles Tyrwhitt Shirts’ failure to make clear the basis of its claim to being a “Carbon Neutral business” led to an ASA ruling against it. Further, Equinor’s claim that wind farms, oil and gas and carbon capture play a balanced role in its energy mix was held to be misleading when most of the company’s revenues still come from oil and gas.

Asia-Pacific

Singapore

Airconditioning ad banned for greenwashing

The Advertising Standards Authority of Singapore (“ASAS”) has banned an airconditioning advertisement for greenwashing. The ad claims that consumers can “save Earth” by buying its energy-efficient air conditioners, and ASAS ruled that the ad was in breach of Singapore’s advertising code regarding “truthful presentation. ASAS also stated that energy saving claims should be substantiated through third-party testing against comparable models manufactured by competitors, and “in conditions that are applicable to the local context”. 

Australia

ASIC continues enforcement action targeting greenwashing

In the past quarter, we have continued to see regulatory enforcement activity against alleged greenwashing. Financial institutions, including superannuation and investment funds, have continued to be primary targets. 

• In December 2023, the Australian Securities & Investments Commission ("ASIC") issued two infringement notices against Northern Trust Asset Management Australia Pty Ltd ("Northern Trust") regarding alleged misleading or deceptive statements about the application of a Carbon Emissions Exclusion Screen. Northern Trust paid AUD29,820 to comply with the two infringement notices.
• In December 2023, it was reported that ASIC and Mercer Superannuation (Australia) Limited ("Mercer") had agreed settlement terms in ASIC's first civil penalty proceedings for alleged greenwashing, which were commenced against Mercer in February 2023. As of January 2024, the proposed settlement (reported to include an AUD11.3 million penalty) remains subject to approval by the Federal Court. As discussed in our earlier March 2023 update, ASIC alleged that Mercer made misleading or deceptive statements and engaged in conduct that could mislead the public about the sustainability of its investments. 

Both of the above cases demonstrate ASIC's continued commitment to tackling greenwashing. ASIC has also foreshadowed that future cases may move beyond misleading or deceptive conduct to licence obligations and directors' and officers' duties, with future areas of interest likely to include net zero statements and targets, the use of terms such as "carbon neutral", "clean" or "green", and the scope and application of investment exclusions and screens. 

In what appears to be a further broadening of the regulator's focus on E, S and G matters, in late November 2023, ASIC also officially announced its 2024 enforcement priorities which include greenwashing, as well as an enduring priority focus on misconduct impacting First Nations people, and governance and directors' duties failures.

Biodiversity in the spotlight

Climate and environment-related litigation continues to gain momentum as strategic litigants adopt a wide range of creative legal strategies. A recent legal opinion published by Sebastian Hartford-Davis (of counsel) and Zoe Bush (of the Environmental Defenders Office) has focused attention on biodiversity and nature-related risks, and directors' duties. Among other matters, the opinion outlines that nature-related risks have the potential to cause harm to the interests of Australian companies and that directors who fail to consider nature-related risks could be found liable for breaching their duty of care and diligence. The views expressed in the opinion reflect the type of action brought by ClientEarth against Shell plc ("Shell") in February 2023, which (although ultimately dismissed) alleged that Shell's Board of Directors had failed to manage climate change risks. The Shell proceeding is discussed further in our November 2023 update. We expect biodiversity and nature-related issues to become an emerging focus for strategic litigants.

Bluewashing action against investment research and financial services firm Morningstar 

In December 2023, ASIC reported that it had issued infringement notices against Morningstar Investment Management Australia Limited ("Morningstar") for alleged "bluewashing". The notices concern statements by Morningstar that one of its funds would not have exposure to investments in controversial weapons companies in line with its ESG Policy, when in fact the fund was exposed for short periods of time to securities in such companies. The incident was self-reported to ASIC and Morningstar paid AUD29,820 to comply with the infringement notices.

The above case follows the Federal Court's decision in September 2023 to order an AUD1.2 million civil penalty in proceedings commenced by ASIC against ACBF Funeral Plan Pty Ltd ("ACBF") in relation to alleged "bluewashing" issues. As discussed in our November 2023 update, ASIC claimed that ACBF misrepresented the sale and promotion of a funeral expense insurance plan to Aboriginal people. ASIC's focus on “bluewashing” is expected to increase over time – see this article by Allens.

ACCC complaint against major supermarket chains

Consumer complaints submitted directly to regulators are emerging as another way in which stakeholders are bringing ESG-related issues under the spotlight. In December 2023, the Environmental Defenders Office ("EDO") submitted a complaint to the Australian Competition and Consumer Commission ("ACCC") on behalf of Living Oceans Society, Neighbours of Fish Farming, the Bob Brown Foundation and Ekō, alleging that packaging of certain Tasmanian salmon products sold at major Australian supermarket chains, which claimed that the products were "responsibly sourced", "responsibly farmed" and "best aquaculture practice", may have the potential to mislead consumers about the environmental harms of Tasmanian salmon.  

The EDO complaint coincides with the publication by the ACCC, also in December 2023, of targeted guidance for businesses making environmental claims ("Greenwashing Guidelines"). The Greenwashing Guidelines set out eight key principles outlining the ACCC's view of what businesses need to do when making environmental claims in order to comply with their obligation under the Australian Consumer Law to not make false or misleading representations, as well as the ACCC's expectations for good practice. For example, businesses should ensure that they make accurate and truthful claims, that they have evidence to back up claims, and that they do not hide or omit important information.      

Africa

South Africa

Landmark judgment seeks to overhaul existing maternity and parental leave provisions

In October 2023, the High Court ruled in favour of a set of parents who challenged the constitutionality of the current South African statutory maternity leave provisions contained in the Basic Conditions of Employment Act. The High Court declared the current statutory provisions regulating maternity leave to be unconstitutional on the basis that they unfairly discriminate against fathers, by placing the primary caregiving of an infant solely on mothers. The Applicants had argued that parents ought to be able to elect as between them which parent will take maternity leave to care for an infant. The High Court ruled that language should be included into the maternity leave provisions that will see fathers have the option to benefit from the statutorily-provided pool of maternity leave. The High Court's order must first be confirmed by South Africa's Constitutional Court before it can have any binding effect, which case is currently pending. If confirmed, the judgment, which seeks to promote gender equality in the workplace, will have significant consequences for employers. See our blog post and podcast where we unpack the judgment and consider some of its consequences. 

Developments in the proposed Kabwe Lead Mine class action 

On 14 December 2023, the High Court dismissed an application for certification of a class action against Anglo American South Africa Limited (“Anglo”). The applicants sought compensation for children and women of childbearing age from the Kabwe district in Zambia, who have been injured by lead exposure as a result of lead mining operations which took place at the Kabwe Lead Mine. 

The Court dismissed the application with costs and found that the applicants "have not cited any precedent in which an alleged historical polluter was held liable in tort for negligence because it owed a duty of care to those who had not yet been born at the time it allegedly polluted. I agree with counsel for Anglo that the limited legal precedents available indicate that establishing such an intergenerational duty of care is untenable, as damage to subsequent generations and decades into the future could not have been foreseen".  The applicants indicated their intention to appeal the judgment. 

Failure of legislative and constitutional duties led to Lily Mine collapse

In October 2023, a Magistrates' Court found that the owners of the Lily Mine in Mpumalanga failed to conduct proper risk assessments at the mine, where a ground collapse led to the deaths of three workers in 2016. The Magistrate found that police and the Department of Mineral Resources and Energy failed to combat illegal mining, which contributed to the fatal collapse, and two state institutions failed their constitutional duties to protect the country's inhabitants and “to have the environment protected, for the benefit of present and future generations". The Magistrate indicated that the matter would be referred to the Director of Public Prosecutions for consideration of whether criminal proceedings should be commenced.

Biodiversity offset challenges in gas-to-power project

On 22 November 2023, the Biodiversity Law Centre lodged an internal administrative appeal against an environmental authorisation (“EA”) granted by to Karpowership SA to proceed with plans to moor floating gas power ships in the port of Richards Bay (the “Project”). The appeal concerns an agreement between Karpowership and Ezemvelo KZN Wildlife (“Ezemvelo”) whereby Kapowership allegedly purchased Madaka game farm for Ezemvelo to ‘offset’ the biodiversity loss that the Project would cause to Richard Bay's sensitive estuarine environment. 

Biodiversity Law Centre argues that:

• offsets are included in the EA without satisfactory explanation as to the specific residual impacts they seek to remedy in the absence of a comprehensive offset report; 
• there is inherent uncertainty regarding whether the offsets are in fact possible;
• it is unclear how purchasing Madaka, with biodiversity targets relating to elephants and black and white rhino populations, will compensate for impacts to estuarine environment in Richards Bay; and 
• the offset mechanism contemplated creates a problematic precedent for how to hold developers accountable for biodiversity impacts arising from delays in offsets becoming functional; and
• it is unclear whether the offset arrangement is lawful in terms of statutory and policy provisions governing offsets. 

Karpowership applied to have the automatic suspension of the EA lifted pending the outcome of the appeal, which was challenged by the Biodiversity Law Centre. Eskom has issued a statement indicating that the grid access it had set aside for Karpowership's three proposed gas-to-power plants (including the Project) had expired, after the projects failed to reach financial close by the deadline of 31 December 2023.

Human Rights Commission brings case against anti-LGBTQIA+ shop owner

South Africa's Human Rights Commission has brought a case in the Eastern Cape High Court, Gqeberha, against an anti-LGBTQIA+ shop owner who admitted to erecting a sign outside his establishment in Parkside, Gqeberha banning gay, lesbian, and transgender people. The allegations against the shop owner include discrimination, hate speech and harassment, and that his conduct violated the rights of the LGBTQIA+ community. On 6 November 2023, representatives of the Human Rights Commission appeared in a Judge's chambers for a directions hearing, which was then postponed to a later date because the respondent's representatives could not attend the hearing. 

United States of America

Litigation against oil and gas companies continues to gain momentum

In November 2023, a Hawaii state court rejected arguments from oil and gas companies that a lawsuit accusing them of deceiving the public about climate change belongs in federal court. The court concluded that state court is the more appropriate venue, emphasizing that the case was brought under state law and concerns torts committed in Hawaii that caused alleged injuries in Hawaii. The case will therefore proceed to trial in state court. 

On 2 November, an environmental organisation filed a motion to compel in the U.S. District Court for the District of Rhode Island in a lawsuit against an oil and gas company, alleging that it failed to evaluate and address the current and foreseeable risks to its bulk fuel terminal in Rhode Island, including risks associated with climate change, which threaten to flood the terminal and release millions of gallons of pollutants into nearby bodies of water. The plaintiff requested that the court order the defendant to properly respond to a series of interrogatories focused on its management and control of the terminal, claiming that the defendant had been thwarting its attempts to discover facts necessary to prove its claims by making improper objections and providing incomplete evasive answers. 

On 7 November, the U.S. Supreme Court denied a bid by oil companies for an emergency stay pausing an upcoming trial in a lawsuit brought by a Louisiana parish. The lawsuit alleges that the oil companies caused coastal damage as a result of their dredging and pipeline development and seeks billions of dollars in damages to fund land restoration and storm protection efforts. The companies claim that all potential jurors in the parish have a personal and financial interest in a verdict favorable to the plaintiff, so the delay was necessary to give ample time to transfer the case to a more neutral venue. The plaintiff pointed to the lack of evidence of parish residents being biased against oil company defendants, and stated that the industry has “frequently prevailed” in environmental jury trials in this parish and others that similarly “have a long history of oil and gas activity and employment.”

In a December 2023 decision, the D.C. Circuit Court of Appeals rejected arguments from oil and gas companies that a climate change fraud suit should be heard in federal court. The case was originally filed in state court by the D.C. Attorney General in 2020, alleging that the defendants engaged in greenwashing campaigns that deceived consumers about the causal link between fossil fuel usage and climate change. Defendants later removed the case to federal court, arguing that the consumer protection suit was in fact part of a coordinated campaign to alter the nation’s energy policy and circumvent federal environmental policy decisions by obtaining favorable judgments in state courts. The District Court rejected the defendants’ arguments for federal jurisdiction and remanded the case back to state court. The D.C. Circuit Court of Appeals affirmed the district court’s order remanding the case, noting that the plaintiff brought suit exclusively under the D.C. Code and the oil and gas companies provided no basis for federal jurisdiction.

Also in December 2023, an environmental group submitted a complaint to the Organization for Economic Cooperation and Development (“OECD”) against the U.S. Export-Import Bank (“U.S. EXIM”) alleging that the agency is a significant financier of fossil fuels in violation of OECD guidelines and recent legislation that calls for an end to international public financing for fossil fuels. The complainant requests that the U.S. EXIM ends all support for any fossil fuel projects, reports fully and publicly on the total greenhouse gas emissions of all the projects in its portfolio, and commits to joining other governments and credit agencies in supporting proposals to end international public finance for fossil fuels.

There were also cases that swayed in favor of energy companies. On 20 November, the California Supreme Court ruled that a suit against a California gas and electric company regarding its series of emergency power shutoffs is barred under the California Public Utilities Code. In the lawsuit, the electric company claimed that the power shutoffs were conducted in order to reduce the risk that the infrastructure would ignite a wildfire during extreme weather conditions, while the plaintiff alleged that the shutoffs were necessitated by the company’s negligence in maintaining its power grid over multiple decades and that Californians harmed by these shutoffs are entitled to $2.5 billion in damages. The Court opined that while California’s Public Utilities Code does permit a private right of action against utilities companies, it also bars any action that interferes with the California Public Utilities Commission’s (the “CPUC”) performance of its official duties. In the opinion, the Court noted that the suit did not allege that the shutoffs were unnecessary or violated PUC regulations. The Court held that the energy company could not be sued for emergency power shutoffs – termed Public Safety Power Shutoffs (“PSPS”) – which were conducted to reduce risks of wildfire, as the lawsuit would interfere with the CPUC’s “broad and continuing supervision and regulation of the PSPS implementation and review.”

Air and water pollution claims on the rise

On 15 November 2023, the New York Attorney General filed a complaint in New York state court against a large food and beverage company, claiming that the company contributed a significant share of the high levels of plastic pollution along the Buffalo River through its single-use plastic packaging. The complaint alleges that the pollution contaminated drinking water and harmed wildlife, causing public harm and injuries to the community in the City of the Buffalo and surrounding areas. The complaint further alleges the company misled consumers about its efforts to fight plastic pollution and failed to warn consumers about the potential health and environmental risks of its products. 

Also in November 2023, a complaint was filed in Pennsylvania state court by a national nonprofit organization against the Allegheny County Health Department for its failure to review and issue air pollution permits for a pair of chemical plants in Pittsburgh in a timely manner, claiming that this deprives plaintiffs of the protection the final permit would provide and also interferes with their right to comment, challenge or enforce the permit.

Consumers continue to file greenwashing suits against major corporations

On 19 November 2023, a proposed class action was filed in the U.S. District Court for the District of Maryland against a major U.S. airline alleging that the airline had defrauded consumers by making false and misleading representations and omissions about its environmental initiatives in order to induce plaintiffs to buy flights at a substantial price premium. The claimants allege that the airline’s claim that it uses “sustainable aviation biofuel” is misleading because the biofuel makes up a minimal amount of the total aviation fuel used, and while biofuel may result in lower CO2 emissions than fossil fuels, its production and use still results in CO2 and non-CO2 emissions, which is not sustainable since their effects on climate change are cumulative. You can find more information on the initial suit in the December edition of the ESG Bulletin.

Also in November 2023, a trash bag manufacturer reached a settlement agreement to dismiss all claims in a class action lawsuit alleging that it falsely advertised a line of trash bags as recyclable despite knowing that the products are made of a material that is not recyclable by most facilities in the country. You can find more information on the initial suit in the November ESG Dispute Bulletin.

On 18 December 2023, two plaintiffs filed a motion to voluntarily dismiss a putative class action against a global fashion retailer in the Southern District of New York. In the initial complaint, the plaintiffs alleged that the fashion corporation misled consumers about its products’ environmental qualities through the use of false and misleading “environmental scorecards” for its products called “Sustainability Profiles.

The trend of challenges to ESG investment practices (“anti-ESG” litigation) continues 

On 21 November 2023, a lawsuit was filed in the U.S. District Court for Oklahoma County by a former state employee against the state of Oklahoma challenging the Energy Discrimination Elimination Act of 2022. The Act requires companies who do business with the state to affirm that they do not and will not boycott energy companies. Further, the state will cease doing business with and divest holdings from financial institutions that boycott energy companies. The complaint alleges that the Act is a governmental overreach that violates both the U.S. Constitution and the Oklahoma State Constitution and seeks an injunction enjoining the enforcement of the Act. 

On 18 December 2023, the State of Tennessee filed suit in state court against a global asset management company, alleging that the company misled consumers about its ESG considerations in violation of the Tennessee Consumer Protection Act. The complaint alleges that the company falsely conveyed that certain funds do not incorporate ESG considerations when they in fact do and overstated the true extent that ESG provides financial benefits to investors. The state seeks injunctive relief, civil penalties, disgorgement, and restitution. 

Also in December 2023, twenty-one state attorneys general sued the U.S. Federal Highway Administration (“FHWA”) and the US Department of Transportation (“DOT”) to challenge a new Final Rule that amends FHWA’s policies controlling national performance management measures and establishes a method for measurement and reporting of transportation-associated greenhouse gas emissions (“GHG”). Under the Final Rule, state departments of transportation and metropolitan planning organizations are required to establish declining carbon dioxide targets and report on progress toward those targets. The state plaintiffs argue in the complaint that the Final Rule is arbitrary and capricious, and that the FHWA and the DOT do not have statutory authority to regulate GHG or to compel states to administer a federal regulatory program.

Developments in youth climate change cases

On 10 December 2023, eighteen youth plaintiffs filed a complaint in the U.S. District Court for the Central District of Washington against the U.S. Environmental Protection Agency (“EPA”), claiming that the agency exceeded its delegated authority and violated their constitutional rights by permitting unsafe levels of climate pollution to enter and accumulate in the nation’s air. The plaintiffs argue that they are “burden[ed] with a lifetime of hardship” by long-time exposure to toxic contaminants, chemicals, and polluted air because as minors, they do not have political power to influence or alter climate policy. The youth plaintiffs seek declaratory relief.

Also in December 2023, the U.S. District Court for the District of Oregon denied a motion to dismiss a lawsuit brought by twenty-one youth plaintiffs against the U.S. federal government, alleging climate change injuries. The original suit, brought in 2015, claimed that by subsidizing fossil fuel extraction and consumption, the government is responsible for destroying the climate system on which all life, liberty, and property depends and as a result, is violating plaintiffs’ fundamental rights under the Due Process Clause of the Constitution and the historical public trust doctrine. As a result of the court’s denial, the case will now proceed to trial.