Puerto Rican towns sue Big Oil under RICO alleging collusion on climate denial

A tattered flag of Puerto Rico flies from a truck parked in the Hurricane Maria affected area of Old San Juan, Puerto Rico. REUTERS/Shannon Stapleton
  • Municipalities say ExxonMobil, Shell and others colluded to intentionally deceive consumers
  • Devastating 2017 hurricane season was exacerbated by climate change, lawsuit says

(Reuters) - Puerto Rican municipalities have filed a lawsuit in federal court saying ExxonMobil Corp, Shell Plc, Chevron Corp and others colluded to publicly downplay the risks of their fossil-fuel products on climate change and are financially responsible for damages from the devastating 2017 hurricane season, which was made worse by global warming.

The group of 16 municipalities filed what they called a first-of-its-kind lawsuit last week against about a dozen fossil fuel companies and others. The towns say the companies coordinated a multibillion-dollar "fraudulent marketing scheme" to convince consumers that fossil fuel products do not alter the climate. That campaign ran contrary to the companies' own studies showing their products accelerate climate change, resulting in more deadly storms, the lawsuit said.

The municipalities said the companies outlined a plan of deception in a joint memo that took aim at international climate negotiations in the 1990s. The coordinated deception spanning decades violates U.S. racketeering and antitrust laws among others, the suit claims.

"Puerto Rico was hit by the perfect storm and is the ultimate victim of global warming," said Marc Grossman, a partner at Milberg Coleman Bryson Phillips Grossman, a firm representing the municipalities, in a statement.

Shell spokesperson Anna Arata said in a statement that addressing climate change requires a “society-wide” approach, and the company doesn’t believe the courtroom is the right venue to address the issue.

Exxon spokesperson Casey Norton said that 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.”

Theodore Boutrous of Gibson Dunn and Crutcher, a counsel for Chevron, said the "lawsuit is a baseless distraction from the serious challenge of global climate change, not an attempt to find an effective solution."

The 2017 Atlantic hurricane season, featuring six major hurricanes and more than a dozen named storms, caused at least $294 billion worth of damages in the U.S. territory, according to the lawsuit. Hurricanes Irma and Maria contributed to an estimated 4,600 deaths and the failure of critical infrastructure in Puerto Rico, the municipalities said.

The suit claims the oil companies should pay for the damage from the storms, which the municipalities said was made worse by climate change, including lost education and healthcare opportunities and tourism revenue.

Dozens of municipalities across the United States have sued oil companies over climate-change-related damages and adaptation costs, mostly in state court. Those suits have been delayed amid numerous jurisdictional battles, and the Supreme Court has been asked to weigh in on where those cases belong.

The case is The Municipalities of Bayamon et al. v. Exxon Mobil Corp. et al., the United States District Court for the District of Puerto Rico, case No. 3:22-cv-01550.

For the municipalities: Marc Grossman, Melissa Sims, and Vicki Maniatis of Milberg Coleman Bryson Phillips Grossman

For the oil companies: Not immediately available

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