Theodore Boutrous Jr. Photo: Diego M. Radzinschi/ALM

Gibson, Dunn & Crutcher partner Theodore Boutrous Jr. on Friday defended a Manhattan federal judge's decision to dismiss a lawsuit from the city of New York seeking to hold some of the world's largest oil and gas producers financially responsible for their contributions to climate change, saying the case raised important concerns about interstate and international regulations.

Boutrous, arguing on behalf of Chevron Corp., BP PLC, ConocoPhillips, Exxon Mobil Corp. and Royal Dutch Shell, told a three-judge panel of the U.S. Court of Appeals for the Second Circuit, that that the city's "unprecedented" nuisance and trespass suit was merely an attempt to use New York law to pursue emissions-related claims that were preempted by federal law.

If allowed to proceed, the lawsuit could create a "unprecedented sweeping, interstate, international, worldwide" tort, which would open the door for states to indirectly regulate out-of-state business activity, he said.

"The only way to escape liability here is to stop producing oil, according to the city," Boutrous, the global co-chair of Gibson Dunn's litigation group said during oral arguments Friday morning.

"The city of New York simply cannot project its law," he said. "It would be improper to do so."

U.S. District Judge John Keenan of the Southern District of New York dismissed the complaint last July, finding that it was, at its core, about emissions. As such, Keenan said, the action was doomed to the same fate as an early suit the city was party to, which ended when the U.S. Supreme Court found in 2011 that the federal Clean Air Act displaces common-law claims.

"Climate change is a fact of life, as is not contested by defendants," Keenan wrote in the opinion. "But the serious problems caused thereby are not for the judiciary to ameliorate. Global warming and solutions thereto must be addressed by the two other branches of government."

Attorneys for New York City, however, maintain that the case is not about emissions at all. Rather, they contended the companies should be held responsible for social costs they knew would result from the production and sale of fossil fuels to consumers. In New York, those have included the construction of sea walls, the implementation of public health programs and other "resiliency measures" to protect public and municipal property from rising sea levels, increased heat and precipitation and more frequent extreme weather.

John Moore, an attorney with the city Law Department, said Friday that emissions were a "step in the chain" that causes harm from downstream consumption. There was no conflict with federal law, he said, when the claims do not affect interstate commerce, and once the city was seen as not acting as a regulator, the "bulk of the [lower] court's ruling no longer holds water."

"All we're asking for is compensation for the harms," he said. "We're not seeking to impose regulations."

That line of argument, though, seemed to trouble Judge Richard Sullivan of the U.S. Court of Appeals for the Second Circuit, an appointee of President Donald Trump, who interjected at one point that "it seems like you're trying to have it both ways."

The panel also included Judges Michael Park, a fellow Trump appointee, and Amalya Kearse, who was appointed to the court by President Jimmy Carter in 1979.

The suit alleges that the five companies are responsible for 11% of all fossil fuel-related emissions since the start of the Industrial Revolution, and that the firms' industry-leading "public relations strategy … downplaying the risks of climate change and promoting fossil fuel use despite the risks" made them even more liable.

Boutrous on Friday acknowledged that "global warming is an important problem," but said that tort suits are not the way to resolve it.

Read More:

New York City Sues Energy Companies Over Climate Change

Energy Companies, City Tangle Over Motion to Dismiss Climate Change Suit

Energy Companies Win Dismissal of New York City Climate Change Suit