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16 communities in Puerto Rico have filed a lawsuit against ExxonMobil, Shell, Conoco, Chevron, Occidental, and a host of other oil and coal companies that claims, among other things, that they are no different than mobsters and are subject to the provisions of the 1970 Racketeer Influenced And Corrupt Organizations act passed by Congress in 1970 to counter organized crime.
If you are not intimately familiar with the RICO law, here is a summary provided by Wikipedia:
Under RICO, a person who has committed “at least two acts of racketeering activity” drawn from a list of 35 crimes (27 federal crimes and eight state crimes) within a 10 year period can be charged with racketeering if such acts are related in one of four specified ways to an “enterprise.” Those found guilty of racketeering can be fined up to $25,000 and sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of “racketeering activity.”
RICO also permits a private individual “damaged in his business or property” by a “racketeer” to file a civil suit. The plaintiff must prove the existence of an “enterprise.” The defendant(s) are not the enterprise. In other words, the defendant(s) and the enterprise are not one and the same. There must be one of four specified relationships between the defendant(s) and the enterprise: either the defendant(s) invested the proceeds of the pattern of racketeering activity into the enterprise (18 U.S.C. § 1962(a)); or the defendant(s) acquired or maintained an interest in, or control of, the enterprise through the pattern of racketeering activity (subsection (b)); or the defendant(s) conducted or participated in the affairs of the enterprise “through” the pattern of racketeering activity (subsection (c)); or the defendant(s) conspired to do one of the above (subsection (d)).[6] In essence, the enterprise is either the ‘prize’, ‘instrument’, ‘victim’, or ‘perpetrator’ of the racketeers. A civil RICO action can be filed in state or federal court.
Now, here’s the kicker that makes RICO suits so scary for defendants. “Both the criminal and the civil components allow the recovery of treble damages (triple the amount of actual/compensatory damages).” If the threat of triple damages doesn’t send shock waves through the C Suites at these companies, it’s hard to imagine what would.
When an attorney drafts a complaint, it must set forth in rather specific detail precisely what the theory of liability is. Since it’s hard to know in advance what information may be revealed in pretrial discovery, attorneys tend to take a “kitchen sink” approach and put everything they can think of that a court could use to find the defendant(s) liable. In this case, the attorneys at Milberg, a large law firm that specializes in class action lawsuits, has listed 14 of them, including common law fraud, RICO, public nuisance, antitrust, negligence, and unjust enrichment.
Puerto Rico Is Especially Vulnerable
“Puerto Rico is one of the most affected places by climate change in the world. It is so precariously positioned — they get hit on all fronts with hurricanes, storm surge, heat, coral bleaching — it’s the perfect place for this climate litigation,” said Melissa Sims, senior counsel at Milberg.
The Guardian reports this first-ever climate change RICO case alleges that international oil and coal companies, their trade associations, and a network of paid thinktanks, scientists, and other operatives conspired to deceive the public — specifically residents of Puerto Rico — about the direct link between their greenhouse gas emitting products and climate change. This fossil fuel enterprise, which remains operational today, according to the lawsuit, resulted in multitude of damages caused by climate disasters that were foreseen — but hidden — by the defendants in order to maximize their profits.
The complaint cites an internal 1998 memo from Shell predicting “violent” Atlantic storms hitting the east coast of the US which would likely prompt class action consumer lawsuits, according to The Hill. Now more than two decades later, those chickens have come home to roost. Puerto Rico in particular has become a “canary in the coal mine” for the impacts of climate change, the lawsuit alleges, citing the Global Climate Risk Index 2020, issued in 2019. That index called Puerto Rico one of the places on the globe most affected by climate change. Warmer waters around the island have intensified the winds associated with tropical storms and hurricanes such as Maria, which killed nearly 3,000 people on the island.
The Specifics Of The RICO Suit
The plaintiffs are 16 municipalities in Puerto Rico that were hit hard by two powerful hurricanes — Irma and Maria — in September 2017. Those storms led to thousands of deaths, food shortages, widespread infrastructure damage, and the longest blackout in US history. Sims told The Guardian, “What’s different about this case is that we have their enterprise in writing — the decision by rival companies, their front groups, scientists, and associations to act together to change public opinion regarding the use of their consumer products by telling people something that they knew was not true.”
According to the lawsuit, which was filed in the US federal district court of Puerto Rico, evidence of the conspiracy dates back to 1989 when the defendants individually and through trade association formed the Global Climate Coalition as a “not-for-profit corporation to influence, advertise, and promote the interests of the fossil fuel industry by giving false information to their consumers and the public at large.”
It argues that the supposedly rival companies conspired for a common purpose — to deceive consumers and sow confusion in order to keep fossil fuel sales high and profitable — and that the GCC was a propaganda machine specifically set up to oppose the Kyoto protocol, the first major international effort to combat climate change. To do this, a written action plan was devised in 1998 to mislead consumers by convincing them that “global warming” was not occurring and, if it did happen, there was no scientific consensus on whether fossil fuels were to blame.
In other words, the action plan was allegedly a climate change denial plan executed through a network of dark money plowed into think tanks, research institutions, trade groups, and PR firms. It provided a road map for an open-ended enterprise that is still functioning today.
The lawsuit further alleges the fossil fuel companies knew Puerto Rico was a “sitting duck” because of its geographic location, which made the island and its people particularly vulnerable to climate change events such as hotter and wetter storms, extreme heat, and rising sea level caused by their carbon producing products.
The damages resulting from the 2017 storms and the likelihood of worse climate disasters battering the island in the future come down to the acts and omissions of the defendants, along with their worldwide co-venturers. Collectively, they responsible for at least 40.01% of greenhouse gases, according to the lawsuit.
According to Sims, who has also represented Puerto Rico municipalities in opioid litigation which resulted in compensation for damages, cites have an almost unfettered ability to use their nuisance laws and local ordinances. “Cities across the nation have woken up to this power and are starting to exercise their rights almost like mini attorney generals. They are now often the first ones bringing cases on opioids, Juul electronic cigarettes, pollution, reverse red-lining and now climate change, using the rights pursuant to racketeering and other laws we’ve helped fine tune over the years.”
The American Petroleum Institute and the National Mining Association did not respond to requests from The Guardian for comment. Several of the defendants have made statements criticizing the lawsuit. “Legal proceedings like this waste millions of dollars of taxpayer money and do nothing to advance meaningful actions that reduce the risks of climate change,” Todd Spitler, a senior media relations adviser to Exxon, told The Hill. “ExxonMobil will continue to invest in efforts to reduce greenhouse gas emissions while meeting society’s growing demand for energy.”
Theodore J. Boutrous Jr. of Gibson, Dunn and Crutcher, counsel for Chevron, called the lawsuit “a baseless distraction from the serious challenge of global climate change. This lawsuit is one in a series of suits that attempt to punish a select group of energy companies for a challenge that is the result of worldwide conduct stretching back to the beginning of the Industrial Revolution,” Boutros said. “These suits serve only to divert attention and resources away from the collaborative, global efforts that are critical to developing a meaningful solution to climate change.”
The Takeaway
Is using a racketeering law against fossil fuel companies a brilliant idea or an abuse of the legal system? There are probably as many opinions on that question as there are people. At first glance, the actions described by the plaintiffs do appear to fit precisely within the provisions of the RICO statute. On the other hand, aren’t the questions raised in the suit better addressed to the political process rather than the courts?
One thing we can be sure of is that no matter what the result of the suit may be at trial, assuming things ever get that far, the US Supreme Court as presently constituted is virtually guaranteed to bend itself into a pretzel in order to protect the fossil fuel industry, which in addition to all its other nefarious activities has generously funded the Federalist Society that has nurtured all six of the sitting reactionary conservative judges. It would take a Herculean belief in equal justice to imagine this court allowing a judgment against the companies to stand.
The result is, while some may applaud this bold legal strategy, don’t expect the courts to solve the curse of carbon emissions from fossil fuels. The way to make that happen is to stop using fossil fuels by vastly expanding renewable energy sources and promoting the electrification of transportation and manufacturing. That is the only thing that will save us from our fossil fuel addiction.
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