COLUMN-Exxon plastic waste suit faces first major hurdle

By Jenna Greene

July 23 (Reuters) - Plastic waste is ubiquitous – from empty water bottles to grocery bags, the detritus litters beaches, parks and roadways.

The question for a federal judge in San Francisco now is whether Exxon Mobil can be held liable for such pollution, or if a novel suit claiming the company has created a public and private nuisance should be dismissed.

A coalition of four environmental groups last year sued Exxon, a leading producer of polymers used to make single-use plastics, alleging the company wrongly led consumers in California to believe that plastic was easily and safely disposed of, when in reality, less than 5% of it is recycled in the United States.

A spokesperson for Exxon, which has denied wrongdoing, did not respond to requests for comment, and the company’s outside counsel from O’Melveny & Myers declined comment for this column. Exxon in court papers said the plaintiffs’ theory that consumers purchased more plastic based on statements by Exxon was “to put it mildly, a real stretch.”

During an hour-long oral argument last week over Exxon's motion to dismiss, Chief U.S. District Judge Richard Seeborg pushed lawyers on both sides to lay out the parameters of nuisance law, while also hinting he might allow the claim to move forward – but more on that later.

Nuisance, a centuries-old legal doctrine with its roots in English common law, applies when a defendant’s conduct interferes with a public or private right to the enjoyment of life or property. Classic examples include blocking a public road or a factory that emits noxious odors.

In recent years, nuisance claims have also been successfully invoked by state and local governments in litigation against opioid makers for their role in the epidemic of addiction and overdose deaths, netting close to $50 billion in payouts. Lead paint manufacturers also settled nuisance claims in California in 2019, agreeing to pay $305 million without admitting wrongdoing.

Unlike personal injury claims, nuisance cases do not seek damages to compensate plaintiffs for an injury. Instead, they seek to make the party responsible for the nuisance pay to abate, or fix, the condition.

The defense bar has called public nuisance a " super tort ," complaining that such claims offer a way to sidestep the more rigorous requirements to prevail in a product liability lawsuit.

Here, the Sierra Club, Surfrider Foundation, Heal the Bay, and San Francisco Baykeeper, which also allege violations of California’s unfair competition law, want abatement, injunctive relief, compensatory damages and attorneys’ fees, noting in a press release that California taxpayers shell out an estimated $420 million each year to clean up and prevent plastic pollution.

Their case was brought in tandem with a similar action by California Attorney General Rob Bonta. The AG’s higher-profile suit remains bogged down in a fight over venue after Seeborg remanded it to San Francisco Superior Court. Exxon has appealed that decision to the 9th U.S. Circuit Court of Appeals, where the dispute remains pending.

In the meantime, the suit by the environmental groups has proceeded in federal court, where Seeborg must now decide if it can survive the motion to dismiss.

“What is the nuisance?” he asked plaintiffs lawyer Tyson Redenbarger, a partner at Cotchett, Pitre & McCarthy. “Is it that these items are plastic (and) plastics cause pollution? Or is it that people acquire it thinking it’s more recyclable than it is?”

“It’s a very broad claim,” Seeborg added. “My problem is, is it so broad that I can’t really get my hands around?”

Redenbarger countered that the nuisance standard itself is “quite broad,” arguing that Exxon’s “years-long campaign to tell the public that plastic can be safely disposed of” led consumers to buy more of it, and that unrecycled plastic waste winds up in waterways or leaks chemicals into landfills.

Redenbarger and spokespeople for the environmental coalition did not respond to requests for comment.

Last year, New York Attorney General Letitia James came up short in a similar suit accusing PepsiCo of polluting the environment with single-use plastic packaging. In dismissing the case, a New York state court judge ruled it would run "contrary to every norm of established jurisprudence" to punish PepsiCo, because it was people, not the company, who ignored laws prohibiting littering.

But Seeborg, who was appointed to the bench in 2009 by President Barack Obama, offered some indication he might not be so quick to toss the environmental groups’ case – at least not at this stage of the litigation.

When Exxon lawyer Dawn Sestito, a partner at O’Melveny, argued that unlike in the lead paint case — where companies allegedly touted the paint for interior use while knowing it was toxic — it’s hard here "to imagine that talking about plastics as recyclable could be considered a promotion for hazardous use,” she said. Moreover, government entities also convey the message that plastic is recyclable, she said.

Seeborg responded that the plaintiffs' "accusation is that you knew it wasn’t, and you’re in the business of polymer production,” he said. “You may quite possibly prevail in terms of undermining the nuisance claim, but we’re at the posture right now of just whether or not it can even go forward.”

He added, “This case isn’t about whether going into the marketplace and saying ‘Let’s all recycle’ is actionable. They’re claiming something very different.”

A few minutes later, when Sestito took aim at what she flagged as a basic disconnect in the plaintiffs’ case – how is it, she said, that stating “a product or plastics could be recyclable results in more plastic ending up in oceans or beaches or becoming pollution?” – Seeborg again shut her down.

“I don’t want to beat the same drum over and over again, but is that something that would need to be explained at this stage of the litigation?” he said. “It ultimately may need to be explained, but the question really is, have they articulated a legal theory that can advance, if they proved everything.”