Climate Change Litigation

I would keep an eye on this.  From the Ceres website - Insurance Coverage Crossroads:

"The potential vulnerability of policyholders to climate change litigation—and thus, insurers’ potential liability for the costs of defending and indemnifying their policyholders—appears to be the least recognized future threat to insurer viability. Fewer than 10 percent of the insurers surveyed mentioned any concern about liability for the costs of defending policyholders sued for climate-related damages, although lawsuits against companies emitting substantial amounts of greenhouse gases—either directly through their business activities or indirectly through their products—have already begun to emerge. Theories of liability include negligence, which is covered by most liability policies.

The first round of tort suits seeking damages related to climate change, although unsuccessful, provides a preview of the types of actions likely to be litigated more frequently in the future. In Comer v. Murphy Oil USA, the plaintiffs alleged that the greenhouse gas emissions of numerous companies exacerbated the destructiveness of Hurricane Katrina, causing damages to their property on the Mississippi coast. The Comer litigation recently came to an end when the Fifth Circuit Court of Appeals upheld the district court’s dismissal of the plaintiffs’ claims based on res judicata. This was the second time the case had been before the Fifth Circuit.

A prior suit by the Comer plaintiffs had been dismissed by the same district court based on multiple grounds, including lack of a “traceable” causal connection for purposes of standing and presentation of a non-justiciable political question.

In the first appeal, a panel of the Fifth Circuit would have allowed the plaintiffs to proceed on some of their state law claims. That opinion was vacated when a majority of the Fifth Circuit judges voted to take the case en banc, but without a quorum due to the number of recusals, the district court opinion was reinstated.

In Native Village of Kivalina v. ExxonMobil Corp., an Alaskan village alleged that the emissions of carbon dioxide into the atmosphere by 20 utility companies contributed to rising sea levels and warming temperatures, causing damage to the village. The U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the village’s suit (for reasons similar to those articulated by the district court in Comer), ultimately holding that federal common law claims for damages allegedly caused by emissions of carbon dioxide had been displaced by the Clean Air Act (CAA), which only authorizes actions by the U.S. Environmental Protection Agency. The Kivalina decision did not address the viability of state law causes of action.

It is certainly too early to predict whether the obstacles encountered by climate change plaintiffs will be insurmountable or whether climate change litigation will become the next mass tort (or perhaps more likely, somewhere in between). However, because liability insurers generally have a broad duty to defend their policyholders, insurers could potentially be liable for massive litigation costs whether or not plaintiffs are ultimately able to succeed on the merits of a climate change case."