Environmentalists Lean on RICO Laws To Pressure Oil Companies Over Climate Change

Climate change activists and their foes in the fossil fuel industry are increasingly turning to laws normally used against criminal organizations in their efforts to force their opponents to capitulate on the topic of global warming.The latest salvo in the legal battle between the two sides comes from Puerto Rico, where a group of communities has sued oil companies such as ExxonMobil and Chevron in federal court alleging that the companies have for “decades” misled their customers about the impact of their carbon-based products on the climate.Lawyers representing the communities are alleging that the companies violated the 1970 Racketeer Influenced and Corrupt Organizations Act by organizing media campaigns and lobbying against efforts to restrict the use of fossil fuels in the name of combating climate change.The defendants, according to the complaint, knew that these “material misrepresentations” and “fraudulent concealments” would cause Puerto Rican towns and their citizens to continue buying oil and gas even though doing so would put them at substantial risk from hurricanes such as Maria, which devastated the island in 2017.“The Defendants understood through their early research, and unique expertise, that they had the capability to prevent or delay violent storms,” the complaint alleges. “Had the Municipalities known that the sale and use of the Defendants’ products would cause the more frequent, hotter, and wetter storms, they would not have accepted the substantial risk caused by the Defendants by purchasing those products and would have appropriately prepared for the ‘hotter and wetter’ storms that pummeled Puerto Rico in 2017.”The RICO Act, passed by Congress in 1970, gives prosecutors the leeway to connect apparently unrelated crimes or activities into a conspiracy on the part of an organization to racketeer, or engage in dishonest or fraudulent business dealings. The act was initially used to prosecute notorious organized crime clans, but in the years since it has been used against everyone from white collar criminals such as Michael Milken to Major League Baseball and police departments running protection rackets. Cities and states have also leveled RICO charges against the makers of opioids and e-cigarettes in civil suits.In statements to Reuters, executives at the oil companies dismissed the lawsuit as frivolous and a “distraction” from the challenge of coping with climate change. The Exxon spokesman, Casey Norton, said legal proceedings such as the case in Puerto Rico “waste millions of dollars of taxpayer money and do nothing to advance meaningful actions that reduce the risks of climate change.” The Puerto Rico case marks the first RICO allegations against the oil companies because of climate change, but not the first time people involved in the debate have used such language. Environmentalists have been on the receiving end of RICO lawsuits by supporters of the fossil fuel industry as well, a trend that when directed at environmental groups as opposed to companies has been criticized as abusive and potentially fraught with First Amendment issues.Racketeering “is very hard to prove, but if you prove it, it is very devastating,” a New York attorney who has lodged RICO complaints against Greenpeace and other environmental groups on behalf of corporate clients, Michael Bowe, said. For one thing, he said, damages in such cases are tripled over what the judge or jury decides. “As a practical matter, it gives you more leverage,” he said. “A RICO case creates triple the legal exposure.”In 2017, Mr. Bowe represented two companies involved in the development of the Dakota Access Pipeline that filed a RICO action against Greenpeace and other environmental groups trying to shut down the project. The complaint alleged that the two companies’ businesses were targeted by “a network of putative not-for-profits and rogue eco-terrorist groups who employ patterns of criminal activity and campaigns of misinformation to target legitimate companies and industries with fabricated environmental claims.”A judge dismissed the case two years later, ruling that defendants Greenpeace, along with other Native American activists and environmental groups protesting the pipeline, were not organized enough to be called a “RICO enterprise,” as the lawsuit alleged. Another case represented by Mr. Bowe, however, survives. In it, a Canadian pulp and paper company, Resolute Forest Products, is suing Greenpeace using the RICO statute for allegedly fabricating charges of misconduct against it in order to raise money.Mr. Bowe is a staunch defender of using the statute when appropriate. As with any other lawsuit, he cautioned, there are cases that hold up based on the facts, and others that do not — meritorious lawsuits that may warrant the heavy hand, and frivolous ones that may not. “It’s not the cause of action, but whether there is any basis for that cause of action,” Mr. Bowe said.“If a party alleges real facts that satisfy the legal elements of a RICO claim, there is nothing wrong with bringing those claims regardless of who it is against,” he said. “But the law requires a direct link between the alleged racketeering and your harm.”Of the recent Puerto Rican claims, he said, “If the plaintiffs claim the alleged misrepresentations by these particular companies about climate change caused the climate change and that climate change caused this particular hurricane, they are a long way off from what the law requires and what they can reasonably expect to prove factually.”

Environmentalists Lean on RICO Laws To Pressure Oil Companies Over Climate Change

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