Commercial and constitutional implications of Juliana (Oregon)

Clyde & Co’s Bermuda Form team explores the commercial and constitutional implications of Juliana (Oregon)’s dismissal on US climate change litigation, and how the decision may impact the allegations made by plaintiffs in ongoing lawsuits and future claims for coverage.

After a lengthy tug-of-war between the US federal District and Ninth Circuit appellate courts in Oregon, the nine-year long case of Juliana et al v United States of America et al¹ came to a dead end on 1 May 2024 as the United States Court of Appeals for the Ninth Circuit dismissed the matter, leaving the District Court and Plaintiffs no means to keep the suit alive.

As well as being an example of the difficulty in the United States of bringing ‘human rights’ type claims, Juliana holds a mirror up to the dichotomy between state court and federal court attitudes towards climate change litigation. While state courts in Hawai'i and Montana have been willing to enforce state constitutional rights, federal courts remain apprehensive. Thus, the terrain upon which climate change lawsuits are fought begins to play an increasingly determinative factor in whether a suit lives to see another day.

Through an examination of how United States courts pick apart federal and state constitutional rights assertions, the question of whether constitutional rights arguments may spill over into the slew of other climate change litigation becomes increasingly relevant. This is the case even in suits brought against oil majors, as state courts may wield such arguments against both public and private bodies, and it is worth considering whether such allegations may thus be considered insurable perils.

Background

On 12 August 2015, a group of 21 youth plaintiffs, all under the ages of nineteen at the time, filed suit in the US District Court (USDC) for the District of Oregon against the US government (specifically, then-President Obama and certain agencies in his administration). Plaintiffs alleged that the government had known of the harmful effects of carbon dioxide emissions on global warming and climate change, and yet “continued their policies and practices” regarding fossil fuels.

Plaintiffs claimed relief for violation of the Due Process Clause of the Fifth Amendment, and the equal protection principles of the Fourteenth Amendment.² The allegations hinged on the fact that the harm caused by Defendants “has denied Plaintiffs the same protection of fundamental rights” as adult citizens in prior and previous generations, specifically their constitutional rights to life, liberty, property, and equality. The Youth plaintiffs, who are unable to vote, asserted they have no “avenues of redress other than this Court” to challenge the burning of fossil fuels, yet they would be disproportionately affected by a “destabilized national climate system”.

Plaintiffs also claimed that the government has the authority – under the Ninth Amendment (the ‘public trust’ doctrine) – to act as a ‘steward’ of the country’s essential natural resources (i.e. land, wildlife, water, fish, etc) on trust for beneficiaries such as Plaintiffs.

Procedural History

Judge Ann Aiken of the USDC for the District of Oregon has been largely responsible for keeping the claim alive, denying Defendants’ numerous attempts to stay or dismiss the litigation. Finally, the Ninth Circuit court allowed the case to proceed to appeal on 26 December 2018.

After hearing arguments, on 17 January 2020, a split 2:1 Ninth Circuit panel agreed that Plaintiffs had “claimed concrete and particularized injuries” and “there was at least a genuine factual dispute as to whether a host of federal policies were a ‘substantial factor’ in causing the plaintiffs’ injuries”. There was a sting in the tail, however, as the “panel held that plaintiffs’ claimed injuries were not redressable” by the court. As such, the case was remanded to the district court with instructions to be dismissed.

In a ray of false hope, Judge Aiken allowed Plaintiffs to file a second amended complaint on 1 June 2023, finding that the Ninth Circuit court had not forbidden outright the amendment of Plaintiffs’ complaint. The Defendants, again, petitioned for mandamus, asking the Ninth Circuit court to enforce its previous decision. The court obliged. In its 1 May 2024 Order, the Ninth Circuit court emphasised that it “could not ‘step into the shoes’ of the political branches”, referenced the duty of the District Court to act on the mandate of an appellate court and instructed the District Court to dismiss the claim for good.

Redressability – Plaintiffs’ Achilles Heel

Juliana’s demise rested, ultimately, on a lack of redressability. Damages sought by Plaintiffs fell into two distinct categories: declaratory and injunctive relief. Plaintiffs had initially requested an injunctive remedy that the government cease permitting, authorising, and subsidising fossil fuel use, as well as draw up a plan to reduce harmful carbon dioxide emissions. The Ninth Circuit court was wary, as such a remedy “enjoin[s] Congress from exercising power expressly granted by the Constitution over public lands”.

Following the claim’s first dismissal by the Ninth Circuit court, where Plaintiffs’ assertions for declaratory relief were dismissed only briefly, the second amended complaint brought declaratory relief to the fore as the Plaintiffs hoped the court would find that their constitutional rights had been violated. However, the Ninth Circuit court only held that any declaration from the court was not “substantially likely” to mitigate Plaintiffs’ concrete injuries, so neither form of relief was justiciable.

The impact of the Ninth Circuit court’s decision has already been felt. Claims by Californian youth Plaintiffs in Genesis B³ were dismissed for the same reason, that declaratory relief was unlikely to remediate their alleged injuries. However, the Californian Plaintiffs were thrown a lifeline to amend their complaint, despite the doubt cast by Judge Fitzgerald on whether the Plaintiffs would be able to amend their claims in a manner that the federal courts would be willing, or able, to accommodate.

It is pertinent to note that, but for District Judge Staton’s scathing dissent in the 17 January 2020 judgment, in neither decision did the Ninth Circuit court consider, in any detail, the merits of the Juliana Plaintiffs’ asserted violations of their constitutional rights. Judge Staton asserted that Plaintiffs “have articulated claims under the Constitution” with sufficient evidence for trial. However, the fact that Judge Staton was in the minority demonstrates the reluctance of the federal court to step on the Executive’s toes. In addition to the high hurdle faced by plaintiffs in federal courts to prove standing, cases like Juliana struggle to progress the cause of justiciability of federal constitutional rights in climate change litigation, despite the number of climate change lawsuits filed since 2017.

Other Youth cases

Youth plaintiffs in state courts face a slightly more optimistic future, as they have won a number of battles relying on specific state constitutional rights. In Held v Montana,⁴ the state’s First Judicial District Court awarded judgment in favour of Plaintiffs, finding that state laws which favoured fossil fuels, and their implementation, were a violation of Plaintiffs’ state constitutional right to a stable climate system, and specifically their right to a “clean and healthful environment”.

Plaintiffs in Hawai’i have found similar success in keeping Navahine v Hawai’i Department of Transportation⁵ alive. Seeking a declaratory judgment against the Hawai’i Department of Transportation to ensure the state’s goals on decarbonisation are met, Judge Crabtree (in contrast with the Ninth Circuit in Juliana) noted that “since Defendants essentially argue Hawai’i law does not require them to take action now, it appears a declaratory judgment action will help resolve the parties’ different views of what the Legislature and the Constitution require”. The case is now set for trial beginning 24 June 2024.

Plaintiffs in Held and Navahine have taken a very different strategy from the Juliana Plaintiffs, latching state constitutional rights violations onto specific actions (or inactions) of state agents. The outcomes of state and federal court-filed climate change litigation seem to be taking similar tracks whether the case is ‘human rights’ related or is one of the many cases brought by states/cities/municipalities around the US against energy majors, in that state court seems to be more helpful for plaintiffs and federal court less so. This trend has resulted in the now-common strategy of plaintiffs keeping their cases in state courts, no matter the expense defendants spare in removing suits to federal court.

Impact on commercial cases

Given that the state versus federal court struggle is ongoing even in climate change litigation against private companies, and the developments in climate cases which have been brought in some European countries, it is worth considering in brief the likely impact of constitutional rights arguments against private parties.

In Navahine, Judge Crabtree relied largely on a Hawai’i Supreme Court decision⁶ which put a stop to the conversion of an abandoned power plant to state that the right to a “clean and healthful” environment means “yesterday’s good enough has become today’s unacceptable. The PUC was under no obligation to evaluate an energy project conceived of in 2012 the same way in 2022. Indeed, doing so would have betrayed its constitutional duty.”⁷ It is thus possible that a US court, especially a state court, may be more willing to tread on the Executive’s toes where the defendant is a private company, rather than a branch of the government, seeing as there would be less controversy over separation of powers. Nonetheless, even in federal court, constitutional rights violations have only been alleged against US government bodies in current US climate change litigation.

All this feeds into the possibility of insurers ultimately paying for such cases. Given that many of the claims brought against energy majors have been brought by States themselves, it must be considered whether violations of constitutional rights amount to insurable harms – could they be said to encompass property damage or personal injury under general commercial policies, for instance? While it seems unlikely, much will turn on policy-specific wording and plaintiffs’ exact allegations.

Conclusion

Although the curtains have fallen on Juliana, particularly when studied alongside other Youth cases, it reinforces the importance of strategy in the choice of court for a climate change litigation suit and shines a light on the possibility of asserting constitutional rights violations in climate change litigation in the US, which could be an increasingly useful tool for plaintiffs in commercial cases as well.

1. Kelsey Cascadia Rose Juliana et al v United States of America et al (Case No. 6:15-cv-01517-TC).
2. Paragraph 291 of the Amended Complaint filed 10 September 2015
3. Genesis B et al v The United States Environmental Protection Agency et al (Case No. 2:23-cv-10345)
4. Rikki Held et al v The State of Montana et al (Case No. DA 23-0575) 
5. Navahine F. v Hawai’i Department of Transportation (Civil No. 1CCV-22-0000631)
6. Re: Hawai’i Electric Light Company Inc (Case No. SCOT-22-0000418)
7. Navahine F. v Hawai’i Department of Transportation (Civil No. 1CCV-22-0000631), paragraph 4(E)