America’s corporate oil giants are doing everything they can to avoid a pair of New Jersey trials — both of which could end with hefty financial penalties if prosecutors prevail.
The two cases, one filed by the city of Hoboken in 2020 the other filed by the state of New Jersey in 2022, allege that major oil companies and the industry trade group that lobbies on their behalf violated state consumer fraud protections by obscuring from the public the relationship between burning fossil fuels and climate change, while pushing policies that boosted oil consumption over the adoption of alternative energy sources.
Both cases name the same defendants: Chevron, BP, Shell, Exxon Mobil, ConocoPhillips and the American Petroleum Institute. And both cases make largely the same arguments, though the Hoboken case has been taken a step further with the city’s attorneys adding a RICO allegation to their complaint in April.
And both cases are slowly moving closer to an actual trial stage, as the oil companies continue to lose efforts to have the litigation dismissed.
Until now, the proceedings in both cases have been largely dominated by the oil companies’ failed attempts to have the litigation removed to federal court. Steve Gold, a professor of environmental law at Rutgers Law School in Newark, said the flurry of motions filed in both cases since the removal move was blocked amounts to the defense taking “their last, best shots at shutting these lawsuits down before they start.”
“Now they’re making a perfectly logical move to try to see if they can get these cases dismissed, before anything happens in these cases,” Gold said.
Hoboken case moves forward
The oil companies were denied a motion to dismiss the Hoboken case last month at a virtual hearing before Hudson County Superior Court Judge Anthony D’Elia. The companies had argued that the Hoboken and New Jersey cases were duplicative and that continuing with two separate cases arguing essentially the same thing risked an outcome in which juries in separate counties produced different verdicts.
D’Elia acknowledged in his ruling that the oil companies had a logical point — both Hoboken’s and New Jersey’s lawsuits rely on the same set of facts, will likely result in the same discovery findings and witness testimony and will hear the same arguments from both sides.
But D’Elia said he decided to dismiss because of the claimed damages. Hoboken seeks to recoup costs for the city’s taxpayers, while New Jersey seeks to do the same for state taxpayers. There is obvious overlap in those two groups, but D’Elia decided the difference was significant enough to side with Hoboken’s attorneys.
“They are claiming that they will suffer future expenses that their taxpayers will claim. Building up the dock, infrastructure work, damage to their plumbing and their infrastructure,” D’Elia said. “That’s important to the court. So I will not dismiss this case, because then those damages are not being sought in the state case.”
New efforts to toss state lawsuit
As the Hoboken case inches forward, the oil companies are also trying new moves to have the state’s lawsuit tossed.
The companies filed a pair of motions to dismiss in October. One motion claims the state’s case should be tossed on personal jurisdiction grounds, which essentially argues that New Jersey Superior Court in Mercer County is the wrong court for this litigation. The other motion argues the case should be dismissed because the state has failed to assert a valid legal theory, even if all the state’s allegations are proven to be true.
“This case should be dismissed. New Jersey’s courts lack the authority to regulate lawful activity beyond the state’s borders,” Theodore Boutrous, a lawyer representing Chevron in the lawsuit, said in a statement when the motions were filed. “The U.S. Constitution precludes New Jersey from applying its state laws to resolve disputes over interstate and international conduct.”
A hearing on the two motions to dismiss the state’s case is currently scheduled for February.
What comes next
Both cases are still a long way from the actual trial stage as these preliminary motions are sorted through.
It’s still possible that the two cases may be consolidated. After a hearing in the Hoboken case earlier this month, D’Elia issued a case management order explaining that all parties agree the two cases should be consolidated, with Hoboken attorneys arguing the consolidated case should stay in Hudson County while the oil companies seek to have the consolidated case heard in Mercer County.
It’s unclear at this point what a consolidation of the two cases would look like. Andrew Rothman, a professor at Rutgers Law School in Newark who teaches courses on New Jersey law practice, said this type of litigation essentially breaks down into two trials: The first part to determine if the defendants are liable and the second part to determine damages. Rothman said it’s possible the Hoboken and state lawsuits will be unified for the liability portion. Then, if the oil companies are found liable, the cases would likely be separated again to determine the different damages for the city and state.
