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City of New York v. Chevron Corp. 

Date: 2 April 2021 

Court: United States Second Circuit Court of Appeals 

Citation(s): City of N.Y. v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021) 

Short summary  

New York City sued the five largest producers of fossil fuels for contributing to climate change under state tort law. The Second Court of Appeals affirmed the District Court’s dismissal of the suit, holding that state common law claims to redress greenhouse gas emissions are displaced by federal common law, which in turn is displaced by the Clean Air Act.  

Summary by: David Cremins

Link to Original Judgement

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Weight of decision  

This decision is binding on all courts in the Second District and persuasive in other Districts.  

Key facts 

New York City filed a federal lawsuit in the Southern District of New York against the five largest investor-owned fossil fuel producers seeking costs the City had incurred and would continue to incur to protect itself and its residents from the impacts of climate change. The City alleged that the defendants “produced, marketed, and sold massive quantities of fossil fuels” despite knowing for many years that the use of fossil fuels caused emissions of greenhouse gas emissions that would accumulate and remain in the atmosphere for centuries, causing “grave harm.” The City laid alleged state common law tort claims of public and private nuisance and illegal trespass, seeking money damages and an injunction to abate past injuries.  

Previous instances  

The district court dismissed the lawsuit, holding that federal common law should govern the City’s claims because they were based on transboundary emissions. The court further concluded that the Clean Air Act displaced any federal common law claims (see American Electric Power v. Connecticut) with regards to domestic emissions and that foreign emissions should not be regulated by a domestic court, so as not to infringe on the political branches. The City appealed to the Second Circuit Court of Appeals seeking reversal of the granted motion to dismiss.  

Summary of holding  

The Second Circuit Court of Appeals affirmed the dismissal of New York City’s lawsuit seeking climate change damages from oil companies, following the reasoning of the district court. First, the Second Circuit held that federal common law displaced the City’s state-law public nuisance, private nuisance, and trespass claims because the lawsuit would regulate cross-border greenhouse gas emissions, albeit “in an indirect and roundabout manner,” and because state law claims “would further risk upsetting the careful balance that has been struck between the prevention of global warming, a project that necessarily requires national standards and global participation, on the one hand, and energy production, economic growth, foreign policy, and national security, on the other.” The Second Circuit then held that the Clean Air Act, in turn, displaced federal common law claims related to domestic emissions. The Second Circuit cited American Electric Power Co. v. Connecticut, 564 U.S. 410 (2011), as establishing “beyond cavil” that the Clean Air Act displaced federal common law nuisance suits to abate domestic transboundary greenhouse gas emissions. 

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THE TRAIL SMELTER ARBITRATION CASE (UNITED STATES VS CANADA)

Date of judgement: 16 April 1938 and 11 March 1941

Citation(s): UN REPORTS OF INTERNATIONAL ARBITRAL AWARDS, Trail Smelter case (USA v. Canada), 16. April 1938 and 11. March 1941, Volume III pp. 1905-1982

Short summary 

This arbitration case between the United States (U.S.) and Canada is the foundational decision for the development of the prohibition of significant transboundary environmental damage in international environmental law. 

Summary by: Robert Los

Link to original judgement 

Click here to open the case in PDF format


Weight of decision 

The decision(s) of the Arbitrational Tribunal continue to bear immense weight in the realm of international law.  

Key facts

A zinc and lead smelter operating since 1896 in the Canadian town of Trail in British Columbia, located 16 km from the U.S. border, became the subject of dispute in this case. 

Between 1925 and 1927, two smokestacks were added to the plant. This caused an increase in pollutant emissions, specifically a doubling of sulfur dioxide. This reached U.S. soil in the form of “acid rain” and caused crop failures and damage in the Columbia River Valley (Washington State). Between 1927 and 1935, the U.S. government protested to the Canadian government regarding this damage to the Columbia River Valley. 

In 1928, both governments commissioned the International Joint Commission by the United States and Canada to conduct arbitration proceedings. The Commission submitted its final report in 1931, which proposed that the Canadian government pay damages of $350,000 USD for the damage caused, and that emissions from the Trail plant be limited. 

Canada paid the damages. However, no improvements were seen with regard to pollutant emissions, and the conflict began again. For this reason, in 1935 the Convention for Settlement of Difficulties Arising from Operation of Smelter at Trail, B.C., was signed, and the parties agreed to have the following questions settled by arbitration:

1. Whether the Trail plant caused any damage to the State of Washington since 1932, and if so what indemnity should be paid?

2. If the answer to the first question is in the affirmative, whether said damage should be stopped in the future, and if so, to what extent?

3. If the damage should be stopped, what measures should the Trail Smelter adopt? (Possibly subject to conditions or stipulations).

4. What indemnity or compensation, if any, should Canada pay following the answers to questions 2 and 3?

Summary of holding

In its first decision in 1938 regarding the first question, the Arbitration Tribunal determined that Canada had to pay damages to the U.S. government for the years 1932 to 1937. However, this compensation payment only applied to the damage caused to the soil of the Columbia River Valley. The pollution of the air was not considered to be damage, but rather only a transport medium for the exhaust gases. The U.S. also tried to prove damage to forestry, agriculture, and livestock, but the tribunal rejected this for lack of convincing evidence. 

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