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Law Firms Stand To Make Killing From Blue Cities’ Climate Lawsuits Against Energy Giants

A Daily Caller News Foundation investigation into legal contracts has found that law firms could reap huge profits from climate change lawsuits filed in dozens of Democratic-leaning jurisdictions across the country. .

Several state and local prosecutors across the country have entered into agreements with private law firms to assist with cases against large energy companies. These agreements, known as contingency fee agreements, reward the law firm with a portion of the payment if the parties reach a settlement, but do not require a large upfront payment from the local government. (Related: Supreme Court rejects energy company’s bid to block Minnesota climate change case from being heard in state court)

These agreements create incentives for activist law firms and often Democratic prosecutors to cooperate in cases against U.S. energy companies in search of large settlements. Depending on how the case develops, settlements can range in size from tens of millions of dollars to billions of dollars. according to Go to E&E News. Although the details of the lawsuits vary, they generally allege that major energy companies are responsible for misleading the public about the environmental damage their products allegedly cause.

For example, Shah Edling’s agreement The lawsuit with the state of Minnesota, led by Democratic Minnesota Attorney General Keith Ellison, seeks 16.67% of the $150 million the company initially recovered in the state’s climate change lawsuit against energy interests such as ExxonMobil and the American Petroleum Institute. stipulates that 7.5% of the additional recovery amount will be paid. Notably, Shah Edling employees have donated tens of thousands of dollars to Democratic candidates dating back to 2016. according to Based on Federal Election Commission data.

Shah Edling, along with another law firm called Ticco and Zavari, have been contracted to assist with climate change litigation in Washington, D.C. agreement The maximum amount a company can pay in a settlement is $70 million.

Critics argue that these lawsuits are based on questionable legal theory and are attempts by special interests to enact anti-fossil fuel policies through the legal system.

A spokesperson for Republican Texas Sen. Cruz and the Senate Commerce Committee told DCNF that “radical climate change activists are involved in shadow policy decisions that bankrupt U.S. energy producers and ban fossil fuels. “We are funding law firms like Shah Edling to do this.” “Clearly these law firms are not taking any financial risk in filing these ridiculous lawsuits.”

“Additionally, the money these activist lawyers make by taking down U.S. energy companies — and having to use shareholder money to protect themselves from lawsuits — shows that this effort is a radical way to abuse the law. “It shows that this is part of the left’s ‘legal’ strategy to line the pockets of plaintiffs’ lawyers while strengthening the legal system and accomplishing policy goals that ordinary Americans don’t want,” Cruz said. added.

Ellison’s cooperation with Shar Edling on the case has drawn scrutiny in state political circles, with three Minnesota Republicans — state Sens. Mark Cohan and Andrew Matthews, and Rep. Jim Nash — sending Ellison the following questions: letter In April, it explained why Schaer Edling’s services were needed and how aware Ellison and his staff were that the company received millions of dollars from center-left “special interest” groups. asked to do so.

“The Minnesota Attorney General’s Office is concerned that out-of-state private law firms are being used as a pass-through to sue in-state businesses,” Matthews said in a statement to the DCNF. Ta. “Currently, Minnesotans fund a fully functioning attorney general’s office, and the attorney general’s office has two full-time lawyers dedicated to litigation, yet five Giving billions of dollars seems completely unnecessary. The citizens of our state have a right to understand the financial and political dynamics that affect our justice system.”

Ellison has not disclosed the specific amount of money he and his team are seeking to obtain from oil companies, but in 2020 he said the potential settlement would be worth $7 billion the state signed with big tobacco companies in the 1990s. He suggested it could rival the dollar agreement. according to To the Associated Press.

“My colleagues and I filed an amicus brief on behalf of energy policy advocates and argued that, from the plaintiffs’ perspective, their political base presents a burdensome and multifaceted challenge that may force defendants to sue for policy peace.” “While we appreciate one way to impose policy through legal action, we have made it clear that this is a profit-making exercise,” said Chris Horner, a practicing attorney with extensive experience in environmental law. told. “From a corporate perspective, this is just a new line of profitable business.”

The impact of these lawsuits may go beyond just large sums of money paid to lawyers.

A growing list of legal experts and former military officials have urged the Hawaii Supreme Court to take up the case because it raises big questions about federalism and national security. We are requesting that you take up the matter. The City of Honolulu is suing energy companies including Chevron and Shell in climate change lawsuits. according to to Reuters.

A similar climate change lawsuit against a major oil company in San Francisco could be even more lucrative for Cher Edling and Altshuler Berzon, another company involved in the case’s contingency fee structure. Plaintiffs are seeking settlements from five major energy companies that could amount to billions of dollars. according to To the San Francisco City Attorney’s Office.

Together, the companies will receive 25% of the first $100 million collected, 15% of the next $50 million, and 7.5% of any recovered funds above $150 million. according to to a contingency fee agreement covering the company’s work for the city.

“When private companies take on new cases, so do governments. They try to increase their staffing, but two things happen. Their costs become very high and they have to cover them. There will be upfront costs,” said Richard Epstein, a New York University law professor who co-authored one of the amicus briefs asking the Supreme Court to file the case. He spoke to DCNF about Hawaii’s climate issues. “They don’t like the cost of the front end being shouldered. So they try to outsource it to reduce the burden and increase yield. And everyone does it. I mean , the legal profession is full of people. (Related: State’s top judge handling climate change litigation teams up with environmental groups aligned with plaintiffs’ attorneys)

Hannon Law Firm similarly stands to receive about 20% of a large climate change settlement reached by the city of Boulder, Colorado against an energy company. according to to Forbes.

Worthington, Caron, Simon Greenstone Panatier, Thomas Kuhn, Newton, and Frost are based in Multnomah County, Oregon, including Portland. Supporting climate change litigation. according to A lawyer in Texas.

In total, companies will take home about a third of the first $100 million recovered, 26% of funds recovered up to $200 million, and 19% of funds above that threshold. according to Go to the local outlet KATU 2. Plaintiffs in the case are seeking $50 billion, but they are unlikely to win the full amount.

The Oakland City Attorney’s Office declined to comment, and all other prosecutors’ offices mentioned did not respond to requests for comment. All law firms mentioned, with the exception of Simon Greenstone Panatier, did not respond to requests for comment. Simon Greenstone Panatier declined to comment.

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