BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
SB 1161 (Allen)
Version: March 29, 2016
Hearing Date: May 3, 2016
Fiscal: No
Urgency: No
TH
SUBJECT
Statutes of Limitation: California Climate Science Truth and
Accountability Act of 2016
DESCRIPTION
This bill would retroactively extend the statute of limitation
to 30 years for claims brought under the Unfair Competition Law
alleging unfair competition with respect to scientific evidence
regarding the existence, extent, or current or future impacts of
anthropogenic induced climate change. The retroactive statute
of limitation created by this bill would apply only to claims
brought by specified public prosecutors.
(This analysis reflects author's amendments to be offered in
Committee.)
BACKGROUND
Recent news articles from the Los Angeles Times and the Energy
and Environmental Reporting Project at Columbia University's
Graduate School of Journalism have revealed a striking
disconnect between the public positions taken by oil companies
over the past few decades, and the internal planning and
research conducted by those same companies, regarding
human-induced climate change. According to the Times:
Before most Americans were even aware of global warming, Exxon
was investing in high-quality research on the subject.
According to reports . . . the oil company's scientists
concluded in the 1970s, '80s and '90s that climate change was
SB 1161 (Allen)
Page 2 of ?
real, would transform the Earth's landscape and was driven by
human activity - especially the burning of fossil fuels.
As the debate over climate change began in earnest, however,
Exxon didn't use its wealth of scientific findings to issue an
alarm to the world, or even to add a supportive,
attention-grabbing voice to those of the climatologists who
were trying to convince policymakers and the public. Instead,
company officials publicly cast doubt on the very existence of
global warming, arguing that the science was just too murky to
draw a conclusion. (Editorial Board, Exxon's Damaging Denial
on Climate Change, Los Angeles Times, Oct. 15, 2015
[as
of Apr. 27, 2016].)
Exxon was not the only oil company seemingly experiencing this
disconnect. According to another Times article:
A few weeks before seminal climate change talks in Kyoto back
in 1997, Mobil Oil took out a bluntly worded advertisement in
the New York Times and Washington Post. "Let's face it: The
science of climate change is too uncertain to mandate a plan
of action that could plunge economies into turmoil," the ad
said. "Scientists cannot predict with certainty if
temperatures will increase, by how much and where changes will
occur."
One year earlier, though, engineers at Mobil Oil were
concerned enough about climate change to design and build a
collection of exploration and production facilities along the
Nova Scotia coast that made structural allowances for rising
temperatures and sea levels. (Amy Lieberman and Susanne Rust,
Big Oil Braced for Global Warming While it Fought Regulations,
Los Angeles Times, Dec. 31, 2015
[as of Apr. 27,
2016].)
Through an examination of "oil industry records and interviews
with current and former executives," the Times and the Energy
and Environmental Reporting Project discovered that this
"two-pronged strategy was widespread within the industry during
the 1990s and early 2000s," finding that "[a]s many of the
world's major oil companies - including Exxon, Mobil and Shell -
joined a multimillion-dollar industry effort to stave off new
SB 1161 (Allen)
Page 3 of ?
regulations to address climate change, they were quietly
safeguarding billion-dollar infrastructure projects from rising
sea levels, warming temperatures and increasing storm severity."
(Id.)
This bill would allow specified public prosecutors to bring
claims against oil companies that engaged in this practice under
California's Unfair Competition Law by retroactively extending
the statute of limitation to 30 years for claims alleging unfair
competition with respect to scientific evidence regarding the
existence, extent, or current or future impacts of anthropogenic
induced climate change.
CHANGES TO EXISTING LAW
Existing law , the Unfair Competition Law, protects consumers and
competitors against unlawful, unfair or fraudulent business acts
or practices and unfair, deceptive, untrue, or misleading
advertising. (Bus. & Prof. Code Sec. 17200 et seq.)
Existing law states that any person who engages, has engaged, or
proposes to engage in unfair competition may be enjoined in any
court of competent jurisdiction. (Bus. & Prof. Code Sec.
17203.)
Existing law states that, in addition to other remedies, any
person who engages, has engaged, or proposes to engage in unfair
competition shall be liable for a civil penalty not to exceed
$2,500 for each violation, which shall be assessed and recovered
in a civil action brought in the name of the people of the State
of California by specified public prosecutors. (Bus. & Prof.
Code Sec. 17206(a).)
Existing law states that any action to enforce a cause of action
pursuant to the Unfair Competition Law shall be commenced within
four years after the cause of action accrued. (Bus. & Prof.
Code Sec. 17208.)
This bill states that, notwithstanding the above provision, an
action may be brought pursuant to the Unfair Competition Law
against a corporation, firm, partnership, joint stock company,
association, or other organization of persons that has directly
or indirectly engaged in unfair competition with respect to
scientific evidence regarding the existence, extent, or current
or future impacts of anthropogenic induced climate change if the
SB 1161 (Allen)
Page 4 of ?
action is commenced within 30 years of an act giving rise to the
cause of action.
This bill specifies that actions alleging claims described in
the provision above that are otherwise barred as of January 1,
2017, solely because the statute of limitation specified in the
Unfair Competition Law has or had expired are revived to the
extent that the actions are commenced within 30 years of an act
giving rise to the cause of action.
This bill specifies that the above provision does not apply to
actions for which a final and nonappealable judgment has been
rendered.
This bill specifies that its provisions shall only apply to
actions brought by the Attorney General, or a district attorney.
COMMENT
1.Stated need for the bill
According to the author:
Recent research has shown that nearly two-thirds of all
industrial carbon dioxide and methane released into the
atmosphere since the dawn of the industrial revolution can be
traced to just 90 entities. The top five investor-owned
companies on the list- Chevron, ExxonMobil, British Petroleum,
Shell, and ConocoPhillips-are responsible for one-eighth of
all emissions.
New discoveries by Inside Climate News, the Los Angeles Times,
and a Union of Concerned Scientists' report, The Climate
Deception Dossiers, show that by the 1980s the fossil fuel
industry was well aware of the emerging scientific consensus
that emissions from the burning of fossil fuels was increasing
global temperature. In fact, many companies engaged in their
own climate change research and shared some of this research
with others in the industry. Exxon's own climate scientists,
for example, conducted cutting-edge climate change research in
the late 1970s and early 1980s. There is also evidence that
companies began factoring projected climate change into their
own business decisions and operations.
State law provides a broad right of action to challenge
"unfair" business practices. Generally, the law establishes a
SB 1161 (Allen)
Page 5 of ?
statute of limitations of four years, though case law
indicates that if the legislature finds sufficient cause, it
has the ability to retroactively extend the statute of
limitations. Given the environmental, health, and economic
impacts that Californians are already paying for as a result
of the fossil fuel industry's many years of public deception,
it is important to hold the industry responsible. Keeping the
statute limited to only four years may undermine the state's
ability to hold fossil fuel companies responsible for their
practices that extend back well beyond four years, as well as
the damages and risks that Californians and everyone else must
face for centuries to come. By extending the statute of
limitations, California has the opportunity to hold these
companies fully accountable for their actions.
SB 1161 seeks to extend the statute of limitations under the
state's Unfair Competition Law from 4 years to 30 years for
deceptive behavior relating to scientific evidence of climate
change.
2.Protecting consumers from unfair business practices
California's Unfair Competition Law (UCL), has protected
California consumers from "unlawful, unfair or fraudulent
business act[s] or practice[s]" for over 70 years. (Bus. &
Prof. Code Sec. 17200.) It renders an individual liable for any
unlawful, unfair, or fraudulent business act or practice and any
unfair, deceptive, untrue, or misleading advertising. In
describing the Unfair Competition Law's broad scope, the
California Supreme Court explained: "it does not proscribe
specific practices. Rather . . . it defines unfair competition
to include any unlawful, unfair or fraudulent business act or
practice. Its coverage is sweeping, embracing anything that can
properly be called a business practice and that at the same time
is forbidden by law." (Cel-Tech Communications, Inc. v. Los
Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180
(internal quotation marks and citations omitted).)
This bill would explicitly authorize district attorneys and the
Attorney General to pursue UCL claims alleging that a business
or organization has directly or indirectly engaged in unfair
competition with respect to scientific evidence regarding the
existence, extent, or current or future impacts of anthropogenic
induced climate change, provided the action is commenced within
30 years of the act giving rise to the cause of action. In
SB 1161 (Allen)
Page 6 of ?
effect, the bill would allow these public prosecutors to reach
back and hold firms accountable for allegedly misleading
consumers about the harmful effects of human-induced climate
change despite knowing that these harms were likely to
materialize. This sort of claim - an action for redress based
on the misleading or fraudulent business practices of another -
falls squarely within the mandate of the UCL, which is to
"provid[e] an equitable means through which both public
prosecutors and private individuals can bring suit to prevent
unfair business practices and restore money or property to
victims of these practices." (Korea Supply Co. v. Lockheed
Martin Corp. (2003) 29 Cal.4th 1134, 1150.)
3.Tolling for delayed discovery
The Unfair Competition Law (UCL) generally requires litigants to
file their claims within 4 years of the date upon which their
claim accrued. (See Bus. & Prof. Code Sec. 17208.) However,
the common law recognizes "a handful of equitable exceptions to
and modifications of the usual rules governing limitations
periods," and these exceptions and modifications operate to
"alter the rules governing either the initial accrual of a
claim, the subsequent running of the limitations period, or
both." (Aryeh v. Canon Business Solutions, Inc. (2013) 55
Cal.4th 1185, 1192.) Among the exceptions to the normal rules
governing limitations periods is the "discovery rule," which
"postpones accrual of a cause of action until the plaintiff
discovers, or has reason to discover, the cause of action."
(Id.)
According to a recent California Supreme Court case, "the UCL is
governed by common law accrual rules," including the discovery
rule, "to the same extent as any other statute." (Id. at 1196.)
Consequently, it is possible that public prosecutors, and any
other aggrieved party with standing, could bring a claim against
a company that allegedly misled consumers about the harmful
effects of human-induced climate change under existing law,
given that the revelations of this conduct were made public only
recently. Recognizing this possibility, the author nonetheless
states:
while the delayed discovery rule tolls the statute after the
cause of action has accrued (the act, causation, and harms),
it is unclear how courts will [rule on this] issue. There is
the possibility that a court could find that a plaintiff could
SB 1161 (Allen)
Page 7 of ?
have discovered their claims more than 4 years ago. SB 1161
avoids stepping into the common law debate by clarifying to
courts that they don't need to delve into a legal battle about
whether plaintiff had discovered or had reason to discover
this very specific cause of action. Thus, SB 1161 avoids the
current uncertainty about whether plaintiff's claims are
barred and legislates the extension by focusing on when the
act occurred rather than letting one judge decide the
discovery analysis and thus about whether these claims should
be allowed to proceed.
4.Extended statutes of limitation
Statutes of limitation are a fundamental element of California
law. By limiting the time period within which a party can bring
a cause of action against another, statutes of limitation
provide finality to disputes that otherwise might never end.
Without statutes of limitation, ancient wrongs committed while
someone was young might become the subject of litigation years
later in their old age. Statutes of limitation "are designed to
promote justice by preventing surprises through the revival of
claims that have been allowed to slumber until evidence has been
lost, memories have faded, and witnesses have disappeared. The
theory is that even if one has a just claim it is unjust not to
put the adversary on notice to defend within the period of
limitation and that the right to be free of stale claims in time
comes to prevail over the right to prosecute them." (Order of
R. Telegraphers v. Railway Express Agency, Inc. (1944), 321 U.S.
342, 348-349.)
This bill would create a new 30-year statute of limitation under
the UCL for claims against defendants that allegedly misled
consumers about the harmful effects of human-induced climate
change. A coalition of business organizations, in opposition,
state:
Current law allows unfair competition actions under Business
and Professions Code 17200 to be brought within four years.
Companies therefore keep their papers and records for a set
period of time before discarding them. No businesses could
have anticipated 30 years ago that it would have to defend its
routine business activities in the context of climate change
litigation. If you were accused now of doing something on
today's date 29 years ago, and had to provide documentation
and proof to defend yourself, could you do so? The
SB 1161 (Allen)
Page 8 of ?
administrative and transactional costs to keeping items for 30
years would be prohibitive, and until now, there would have
been no reason to do so.
. . .
This bill is changing the rules on companies late in the game.
An extension of over 26 years, retroactively, is at odds with
our notions of fair jurisprudence.
. . .
California already places tremendous burdens upon the
companies it depends upon for its tax base. Our civil justice
system is already perceived as the least fair in the country,
as evidenced by our ranking, yet again, as the nation's number
one "judicial hellhole." This bill will require companies to
operate in a constant state of "litigation preparedness,"
spending time and resources on preserving, organizing and
maintaining information in the event that they are eventually
sued.
Writing in support of an extended statute of limitation, the
Union of Concerned Scientists, the sponsor of SB 1161, writes:
We believe that extending the statute of limitations to 30
years from an act giving rise to the cause of action is
appropriate given the scale and duration of the allegations.
The alleged deceit rivals the tobacco industry's disavowal of
the link between tobacco and cancer, but the impact of fossil
fuels is even greater on people, the environment, and the
economy. Damage of climate change is already occurring and
will become more severe as time passes. Moreover, more than
half of all industrial carbon dioxide emissions have been
emitted since 1988-a time when the industry knew of the damage
caused by their product. Thus, the gravity of potential
misconduct is huge and deserving of a fair hearing on the
merits. . . . [W]hether these companies have actually broken
the law is something for the courts to decide-SB 1161 is not
making that judgment. The bill only gives law enforcement the
opportunity to make sure justice is served for the full weight
of any violations that could be proven in court.
Recognizing the concerns surrounding the creation of a 30-year
statute of limitation as proposed in this bill, the Committee
might wish to consider alternative pathways that would permit
these claims to be brought under the UCL, such as enacting a
one-time revival period for otherwise time-lapsed claims, or
bolstering applicability of the delayed discovery rule.
SB 1161 (Allen)
Page 9 of ?
5.Retroactivity
In addition to providing an expanded prospective statute of
limitation for bringing specified claims regarding the harmful
effects of human-induced climate change, this bill would also
have retroactive effect to revive claims that, absent such
revival, would be barred as untimely under the UCL's existing
4-year statute of limitation. "Generally, statutes operate
prospectively only." (McClung v. Employment Dev. Dept. (2004)
34 Cal.4th 467, 475.)
[T]he presumption against retroactive legislation is deeply
rooted in our jurisprudence, and embodies a legal doctrine
centuries older than our Republic. Elementary considerations
of fairness dictate that individuals should have an
opportunity to know what the law is and to conform their
conduct accordingly; settled expectations should not be
lightly disrupted. For that reason, the principle that the
legal effect of conduct should ordinarily be assessed under
the law that existed when the conduct took place has timeless
and universal appeal. (Landgraf v. USI Film Products (1994)
511 U.S. 244, 265 (internal citations omitted).)
"A statute does not operate [retroactively] merely because it is
applied in a case arising from conduct antedating the statute's
enactment, or upsets expectations based in prior law. Rather,
the court must ask whether the new provision attaches new legal
consequences to events completed before its enactment."
(Landgraf, 511 U.S. at 269-70 (internal citations omitted).)
"This is not to say," however, "that a statute may never apply
retroactively." (McClung, 34 Cal.4th at 475.) In California,
"[a] statute's retroactivity is, in the first instance, a policy
determination for the Legislature and one to which courts defer
absent some constitutional objection to retroactivity." (Id.,
at 475.) Under California law, "a statute may be applied
retroactively only if it contains express language of
retroactivity or if other sources provide a clear and
unavoidable implication that the Legislature intended
retroactive application." (Myers v. Philip Morris Companies,
Inc. (2002) 28 Cal.4th 828, 844.)
The language in this bill makes clear that it would operate
retroactively to revive claims brought by public prosecutors
against specified entities that directly or indirectly engaged
SB 1161 (Allen)
Page 10 of ?
in unfair competition with respect to scientific evidence
regarding the existence, extent, or current or future impacts of
anthropogenic induced climate change. In so doing, it would
allow public prosecutors to bring claims under the UCL against
corporations that allegedly misled the public about the harmful
effects of climate change in the 1980s and 1990s. Importantly,
the retroactive reach of this bill would not extend to claims
accruing outside the 30-year statute of limitation, and would
not operate to revive claims for which a final and nonappealable
judgment has already been rendered.
6.Author's amendments
The author offers the following amendments to clarify the scope
of this bill's retroactivity and revival provisions, and to
strike specified city attorneys from the list of public
prosecutors authorized to bring claims under the extended
statute of limitation.
Amendments :
On page 2, line 38, following "Actions" insert "alleging
claims described in paragraph (1)"
On page 3, strike lines 3 through 7, and insert "(3) Paragraph
(2) does not apply to actions alleging claims described in
paragraph (1) for which a final and nonappealable judgment has
been rendered."
On page 3, lines 9 and 10, strike "or a city attorney of a
city having a population in excess of 750,000."
Support : Amazon Watch; As You Sow; Asian Pacific Environmental
Network; Azul; California Coastal Protection Network; California
League of Conservation Voters; Center for Biological Diversity;
Center for Environmental Health; Center for International
Environmental Law; Climate Hawks Vote; Climate Resolve;
Coalition for Clean Air; Consumer Attorneys of California;
Environment California; Fossil Free California; Global Exchange;
Interfaith Power & Light; Media Alliance; Natural Resources
Defense Council; Rainforest Action Network; Sierra Club
California; Stand; Zevin Asset Management, LLC
Opposition : American Chemistry Council; American Insurance
SB 1161 (Allen)
Page 11 of ?
Association; Association of California Insurance Companies;
California Business Roundtable; California Business Properties
Association; California Building Industry Association;
California Chamber of Commerce; California Independent Oil
Marketers Association; California Independent Petroleum
Association; California Manufacturers and Technology
Association; California Retailers Association; Civil Justice
Association of California; National Federation of Independent
Business; Valley Industry and Commerce Association
HISTORY
Source : Union of Concerned Scientists
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote : Senate Environmental Quality Committee (Ayes 5,
Noes 2)
**************