A three-judge federal panel heard arguments in Pasadena on Wednesday to determine whether two high-stakes climate change lawsuits pitting cities and counties in California against multinational fossil fuel companies would be heard in state or federal courts.

Local governments are alleging that oil companies knew about the consequences of climate change decades ago, that they lied to the public, and that they should pay for mitigation efforts like seawalls as a result. They asked the Ninth Circuit Court of Appeals to rule that state courts hear the cases.

The fossil fuel industry argues that its business practices were lawful and that the cases should be heard in federal court — if heard at all — because they deal with questions that transcend state borders.

If the cases end up in California state courts — as Oakland, San Francisco, Imperial Beach and other citieshave asked — legal experts predict oil companies will have a much harder time winning. The judges do not have a hard deadline by which to rule, although a decision is expected within several months.

“Legally, it’s based on the wrongful promotion and marketing and deceit that led to the profligate and uncontrolled and limitless use of [fossil fuels] to the world’s detriment,” attorney Victor Sher, who represents the localities bringing the cases, said in court on Wednesday.

"I object to the way it's being characterized," said Theodore Boutrous, an attorney representing Chevron, who argued that "the case is drenched in federal issues from any angle you look at it."

Federal v. state

Richard Wiles is the executive director of the Center for Climate Integrity, an organization that supports the cities' and counties' position. He disagreed with Boutrous because the plaintiffs are not looking to set policy nor regulate emissions.

"These are simply cost-recovery cases like the opioids cases or tobacco cases or lead paint cases," Wiles said.

Similar cases that originated from Colorado, Maryland and Rhode Island are also working their way through the court system, and Wiles said that the fight over state or federal jurisdiction will largely be decided in 2020.

To avoid state jurisdiction, lawyers from the oil industry are painting the litigation as a sweeping attack on any carbon emissions from burning fossil fuels since the Industrial Revolution. Because much drilling happens on federal land or in federal waters, the cases should be heard at that level, Boutrous, Chevron's attorney, said.

When reached for comment, Sean Comey, a spokesperson for Chevron, referred to the company's answering brief. In it, the company's lawyers argued that state laws and state court were the wrong venues "for regulating worldwide energy policy or punishing lawful, global commercial activity that is vital to every sector of the global economy."

The Western States Petroleum Association, a trade group that counts these companies among its members, declined to comment on the cases.

The federal government was also represented at the hearings to side with the oil industry. Department of Justice lawyer Jonathan Brightbill said that under both the Obama and Trump administrations, the government's position has been that these cases should not be heard in state court.

He said the federal government had a specific interest in seeing to it that the legislative and executive branches retain power to "set and continue to set national policy in this country relating to the complex questions related to greenhouse gas emissions and climate change."

This was also the first large climate change-related case since youth activists lost the headline-grabbing Juliana v. United States case — which had sought to force the government to act on climate change — in mid-January.

What's at stake

If these cases are allowed to go to trial, regardless of jurisdiction, they would open up oil companies to discovery, the evidence-gathering process of a case.

And if they were to progress all the way to a verdict, and were found liable, then the fossil fuel industry could be responsible for covering the costs of mitigation measures, a precedent that would get very costly quickly if other coastal cities and states sued on similar grounds.

Wiles' group estimated that coastal communities might be facing a $22 billion price tag in California alone to build seawalls by 2040.

“The last thing the industry wants is to have to go on trial," Wiles said.

Mark Olalde covers the environment for The Desert Sun. Contact him at molalde@gannett.com, and follow him on Twitter at @MarkOlalde.