Michigan AG Solicits Attorney Help for Climate Change Litigation
In recent months, much of the discussion of ESG issues has focused on the impact of the ESG backlash. However, the predominance of the backlash movement in the current ESG discussion does not mean that interest in addressing ESG-related concerns has disappeared; in certain circles at least, ESG concerns remain on the agenda. The most interesting recent development along these lines is the May 9, 2024, issuance of a Request for Proposals (RFP) by the Michigan Department of Attorney General, in which the Department has solicited attorneys to act as Special Assistant Attorneys General (SAAG) to pursue climate change-related lawsuits against fossil fuel companies and others. The Department’s notice is reminder that for all of the noise surrounding the ESG backlash, the threat of ESG-related litigation is continuing.
The Michigan Department of Attorney General’s RFP can be found here. The Department’s Statement of Work, which describes the project for which the Department is soliciting proposals, can be found here. Hat Tip to the Katten law firm’s May 28, 2024 memo entitled “Another Expansion of Climate Change Litigation Risk” (here).
The starting point for the Department’s RFP is a recital of the “negative impacts” climate change has caused the state of Michigan. Among other things, the RFP says that climate change has resulted in “decreasing tourism, harming agriculture, depleting our tax base” as well as “irreversible consequences” including “harmful algal blooms, uptick in invasive species and diseases-bearing pests” and “atmospheric and ocean warming.”
The fossil fuels industry, the RFP asserts, was aware of these and other negative impacts from the extraction and use of fossil fuels but “continued to knowingly engage in business practices and conduct that harmed the public’s health.” The fossil fuel industry, the RFP goes on, “hid information and deceived the public and consumers.” Elsewhere the RFP refers to the industry’s “concealment of the known true hazards of the use of fossil fuels by the industry.” According to the RFP, the state suffered losses and increased costs due to damaging severe weather, damage to State property and resources, losses to property and business and associated loss of tax revenue.
The RFP seeks proposals from attorneys interested in pursuing these claims, with the work to consist of information gathering, determining which claims will be brought and against whom, drafting the complaints, conducting discovery, motions practice and conducting trials. The attorneys selected will be compensated by the state, as proposed by the attorneys in their responses to the RFP. The Department’s timetable for the RFP process indicates that the attorney selection process will be completed no later than August 2, 2024.
Discussion
Readers undoubtedly will want to know that the current Attorney General of Michigan is Dana Nessel, a Democrat, who has held the office since January 2019. Some readers may detect some irony that a state whose 20th century history consists largely of its role as the place where massive numbers of internal combustion engine vehicles, all powered by fossil fuels, were built. For all of the astonished outrage contained in the RFP, Michigan cannot portray itself as an uninvolved bystander in the deployment and consumption of fossil fuels. To be sure, a critical part of the Department’s theory is that that the fossil fuel industry concealed known harms and deceived the public and the State, but the role of the fossil fuel powered vehicles built in Michigan cannot be overlooked.
As has been the case in much of the prior climate change-related litigation, the critical issue in any lawsuits that the state may bring will be causation. It will be difficult to show that many of the ills of which the RFP complains are ascribable to the fossil fuels industry. The algae blooms in the Great Lakes, undoubtedly a scourge, likely are due at least in part to farm runoff. The invasive species that have invaded the Great Lakes likely were brought to the area in the holds of ships from other countries. Even just thinking about last summer’s wildfires, in which smoke from burning woodlands in Ontario darkened the skies over Michigan, it can become quite convoluted in blaming the state’s smoky skies to the fossil fuels industry.
One thing that is yet to be determined is who the state would actually sue. It can certainly be anticipated that fossil fuel companies themselves will be named as defendants. But in the context of litigation built around alleged deception and knowing making of misleading statements, it is entirely possible that the defendants could include individuals as well, particularly company executives who supposedly were aware of the climate-related harms but nevertheless caused their companies to continue to develop and sell fossil fuel products. So while these claims, at least as described in the RFP, are not obviously D&O claims, it is possible that as framed and filed, directors and officers could be named as defendants.
All of which is a reminder that, notwithstanding the backlash, risks of ESG-related litigation continue, as does the risks to corporate directors and officers from ESG litigation. How all of this will play out remains to be seen but it does seem likely that we will continue to see ESG litigation in the weeks, months, and years ahead.