Sierra Club, Inc. v. Exxon Mobil Corporation

Background

Sierra Club, Inc. and other environmental nonprofit plaintiffs alleged that Exxon Mobil Corporation created a public nuisance by producing and distributing single-use plastic products while knowing that the products could not be safely disposed of and would inevitably contribute to pollution. The plaintiffs also alleged that Exxon promoted the plastics as recyclable or safely disposable, misleading the public about their environmental effects. They brought claims under California nuisance law and California’s Unfair Competition Law, seeking injunctions, abatement relief, damages, and attorney fees and costs.

Exxon removed the case from state court to federal court. In this case, Exxon moved to dismiss the claims under Federal Rule of Civil Procedure 12 and alternatively moved to strike specified allegations under California’s anti-lawsuit statute.

Personal jurisdiction

The court rejected Exxon’s argument that it lacked personal jurisdiction because the plaintiffs had not alleged that Exxon specifically directed its promotional statements at California. The court held that the allegations were sufficient at this stage because Exxon allegedly operated facilities and factories in California, produced plastics in the state, sold products through California businesses, and operated plastic-packaging plants across the state. The claims arose from or related to those activities, and exercising jurisdiction was reasonable.

Nuisance claim

The court held that the plaintiffs plausibly stated a public nuisance claim. A public nuisance claim requires an alleged substantial and unreasonable interference with a public right, caused by the defendant’s knowing conduct. The court concluded that the complaint alleged affirmative conduct beyond merely failing to warn about a defective product. Specifically, it alleged that Exxon produced and distributed plastics it knew could not be safely disposed of, maintained a market for those plastics, and promoted them as recyclable while concealing their environmental effects.

The court rejected Exxon’s argument that the claim was actually a products-liability claim and therefore could not proceed as a nuisance claim. Although the same facts might support a products-liability claim, the court held that this possibility did not prevent the allegations from also supporting a nuisance theory.

The court also held that the complaint plausibly alleged causation. It found that the allegations that Exxon produced and promoted large amounts of non-biodegradable and non-recyclable plastic, and that consumers bought more of those products as a result, were enough at the pleading stage to allege that Exxon’s conduct was a substantial factor in California’s plastic-pollution crisis. The court further found proximate cause plausibly alleged because the complaint asserted that Exxon foresaw the resulting harm.

Unfair Competition Law claims

The court granted the motion to dismiss the plaintiffs’ second claim under California’s Unfair Competition Law. The plaintiffs alleged that Exxon’s conduct was unlawful because it violated California Fish and Game statutes concerning pollution and was unfair because Exxon misrepresented the nature and safe disposal of its products.

As to the unlawful theory, the court held that the complaint did not plausibly allege that Exxon “permitted” plastics to pass into state waters. The complaint alleged that Exxon produced and distributed the plastics, but it did not allege that Exxon controlled them after distribution or itself deposited or placed them into the waters. The court declined to transfer nuisance-law concepts to this separate statutory theory.

As to the unfairness theory, the court held that the plaintiffs could not use generalized allegations of misrepresentation to fit their claim into the Unfair Competition Law’s unfairness prong after disclaiming the statute’s separate fraud prong. The court therefore granted the motion as to the Unfair Competition Law claim. The plaintiffs were given leave to amend that claim within 30 days.

Motion to strike

The court denied Exxon’s motion to strike allegations under California’s anti-SLAPP statute. The court held that the plaintiffs’ action qualified for the statute’s public-interest exemption because it sought relief for the general public, would enforce an important public right and benefit a large group, and involved private enforcement that could complement ongoing public enforcement. The court also rejected Exxon’s argument that allegations of harm to the plaintiffs themselves defeated the exemption, reasoning that the requested remedies were not tied to any particular plaintiff.

Disposition

The court granted in part and denied in part Exxon’s motion to dismiss. It denied the motion as to the public-nuisance claim, granted it as to the Unfair Competition Law claim, and granted the plaintiffs leave to amend that claim within 30 days. The court denied Exxon’s motion to strike.