California Sues GM, Ford, Toyota Over Global Warming (Update3)
By Karen Gullo and Alan Ohnsman
Sept. 20 (Bloomberg) -- California sued the six biggest automakers in the U.S., including General Motors Corp. and Ford Motor Co., for making vehicles that cost the state billions of dollars in its fight against the effects of global warming.
General Motors, Ford, Toyota Motor Corp., DaimlerChrysler AG, Honda Motor Co. and Nissan Motor Co. have created a ``public nuisance'' by making millions of vehicles that emit huge quantities of carbon dioxide, a greenhouse gas that increases the temperature of the earth's atmosphere, according to a complaint filed today in U.S. District Court in Oakland.
``Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and the automakers have refused to act,'' said California Attorney General Bill Lockyer in a statement. His is the first state to sue auto companies over emissions linked to global warming, according to his spokeswoman, Teresa Schilling.
The suit, which seeks compensation for pollution and erosion caused by increased greenhouse gas levels, is the latest initiative by California to push businesses and the federal government to address global warming. The state legislature approved a measure last month to force utilities to cut emissions, and the state has sued the U.S. for failing to address the effects of carbon dioxide emissions.
Targeted
California has already targeted carmakers with laws that would require them to lower emissions. The state enacted rules in 2004 that sought to force cuts in the amount of carbon dioxide and other tailpipe gases by up to 30 percent in cars sold in the state. Other states have adopted or are weighing similar rules.
Today's lawsuit claimed the auto companies are violating federal and state laws against creating a public nuisance, which in California bans action ``which affects at the same time an entire community or neighborhood, or any considerable number of persons.'' Nuisances are ``anything which is injurious to health,'' obstructs free use of property or interferes with the comfortable enjoyment of life or property, the complaint said.
A similar lawsuit filed by New York, California, New Jersey and five other states against utilities was dismissed in New York federal court. That case alleged that utility power plants pump 650 million tons of carbon dioxide into the atmosphere each year, causing a public nuisance by reducing water supplies, raising sea levels and exposing people to smog that can cause asthma.
Similar Suit
The suit was filed against American Electric Power Co., Xcel Energy Inc., Cinergy Corp., Southern Co., and the Tennessee Valley Authority. U.S. District Judge Loretta Preska in Manhattan dismissed the case last September, saying it raised questions ``consigned to the political branches that are accountable to the people.'' Her ruling is on appeal to the U.S. Court of Appeals in New York.
John Kostyack, senior counsel for the National Wildlife Federation, an environmental protection group, said he expected Preska's ruling to be reversed.
``I think these are both viable cases,'' Kostyack said. ``Nuisance law is really designed for situations where the legislature fails to address harms.''
Patrick Long, president-elect of DRI, an association of defense lawyers and corporate counsel, said he saw similarities between the California suit and the power-plant case.
Legislation
``The most productive way to approach these issues would be through legislation that would affect automobile manufacturers that market automobiles in all 50 states,'' said Long, whose firm, Long, Williamson & Delis, is based in Santa Ana, California. ``What one state calls a public nuisance the next state may not.''
California Attorney General Lockyer said automakers emit 289 million tons of carbon dioxide, accounting for 20 percent of all such emissions in the U.S. and 30 percent of emissions in California.
Dave Barthmuss, a spokesman for Detroit-based General Motors, said the company is reviewing the lawsuit. DaimlerChrysler spokesman Max Gates, Toyota spokeswoman Mira Sleilati and Nissan spokeswoman Katherine Zachary declined to comment.
Shares of GM, the world's largest automaker, rose 37 cents to $31.77 in New York Stock Exchange composite trading. Shares of Dearborn, Michigan-based Ford rose 9 cents to $7.75, and U.S. shares of Stuttgart, Germany-based DaimlerChrysler rose 70 cents to $49.99.
Toughest Standards
American depositary receipts of Aichi, Japan-based Toyota, No. 2 in global sales, rose 93 cents to $107.29 in New York. Honda's American depositary receipts rose 36 cents to $32.91 in New York and Tokyo-based Nissan's shares rose 22 cents to $22.58 in Nasdaq Stock Market composite trading.
California legislators approved the toughest pollution limits in the U.S. last month, requiring utilities, oil refineries and other companies to cut emissions tied to global warming by 25 percent in the next 14 years. California Governor Arnold Schwarzenegger, a Republican who is seeking re-election this year, said he supports the measure.
Automakers have sued to overturn the new state emissions rules. Redesigning cars to address such restrictions would cost the industry billions of dollars, carmakers have claimed. California asked a federal court on Sept. 15 to throw out an industry complaint. The judge has yet to rule.
`Rising Temperatures'
``Rising temperatures are threatening California's economy, health and environment,'' said Amy Lynd Luers, a climate researcher with the Union of Concerned Scientists, in a statement. ``Automakers are contributing to global warming.''
Carbon dioxide is a byproduct of burning gasoline. Car companies say the only way to meet California's emissions rules is to reduce vehicle fuel consumption. They claim the state is trying to regulate fuel economy, or the number of miles a car runs on a gallon of gas, a standard which is set by the National Highway Traffic Safety Administration.
``The federal government, through the National Highway Traffic Safety Administration, should raise federal fuel economy standards as the means of addressing the issue,'' said American Honda Motor Co. Inc., in an e-mailed statement. The company declined to comment on the lawsuit.
GM, Honda, and Toyota have said they are developing so- called fuel-cell cars in response to consumer demand for better fuel economy amid higher gas prices. Fuel cells produce only water vapor as a byproduct.
`Billions of Dollars'
Today's lawsuit claimed that Californians have suffered ``billions of dollars in damages, including millions of dollars of funds expended to determine the extent, location and nature of future harms.''
Global warming has forced the state to prepare for and mitigate those harms, and caused ``billions of dollars of current harm to the value of flood control infrastructure'' and natural resources such as the snow pack and the coastline, according to the complaint.
Schwarzenegger, who has been a critic of regulations considered too expensive for business, has backed carbon dioxide limits for automobiles and last month struck a deal with lawmakers over greenhouse gas limits that some business groups opposed.
``We applaud any effort to defend California's right to clean our air,'' said Linda Adams, California Secretary for Environmental Protection, when asked about Lockyer's suit.
The lawsuit is California v. General Motors, 06-05755, U.S. District Court, Northern District of California.
