<<

. 10
( 16)



>>

26 Stanford Envtl. L.J. & 43 Stanford J. Int™l L. 181 (2007) (discussing these and additional cases).
With the exception of example No. 3, Connecticut v. Am. Elec. Power Co., 406 F. Supp. 265
(S.D.N.Y. 2005), a public nuisance suit against power companies, all of these actions are so primarily
regulatory that they would appear to fall outside the scope of the liability insurance policies held by
the defendants irrespective of the manner in which plaintiffs™ claims were pled. Had the suit sought
monetary damages, it could have triggered duties on the part of the power companies™ liability insurers.
See TAN 17“19, 26“30, infra.
For the dismissal, see Order Granting Defendants™ Motion to Dismiss, People v. Gen. Motors, 2007
7

WL 2726871 (Sept. 17). For another example, in Comer v. Nationwide Mutual Insurance Co., a putative
class of plaintiffs who incurred property damage due to Hurricane Katrina sought damages from a
number of commercial entities (insurers, mortgage lenders, chemical companies, oil companies, and
an industry trade association) engaged in activity alleged to have contributed to adverse climatic
changes that increased the frequency and severity of hurricanes. The Court refused class action
treatment on the ground that the plaintiffs™ claims and injuries were too individuated and later
dismissed the case on the grounds that it presented a nonjusticiable “political question” and the
plaintiffs lacked legal “standing.” See 2006 U.S. Dist. LEXIS 33123 (S.D. Miss. Feb. 23, 2006) (Comer
action alleges injury from climate change and seeking monetary damages); Order of Aug. 30, 2007,
in Comer v. Murphy Oil USA, Inc., Civil Action No. 1:05-CV-436 (S.D. Miss.) (dismissing case); see
also John E. Nowak & Ronald D. Rotunda, Constitutional Law §§ 2.12(f), 2.15 (6th ed. 2000)
(reviewing legal doctrines of standing and political question). In Northwest Environmental Defense
Center v. Owens Corning Corp., 434 F. Supp. 2d 9557 (D. Or. 2006), plaintiffs alleged violations of
the Clean Air Act and contribution to global warming, seeking civil penalties as relief. Many insurers
would take the position that a request for civil penalties is not covered under a standard liability
insurance policy. However, as discussed herein, the standard commercial general liability (“CGL”)
policy agrees to provide coverage for actions seeking to impose liability upon the policyholder because
of property damage to a third party. Depending on the nature of the claim and the underlying facts,
a request for civil penalties may or may not qualify as an attempt to impose liability for property
damage. If, for example, the civil penalties are imposed merely for violating permitting processes,
the insurer position that the policyholder is not being sued for damages may prevail. If, however,
the civil penalties are assessed because of property damage in¬‚icted by the policyholder™s failure to
observe proper permitting process, the policyholder may prevail in obtaining defense of the action and
coverage; see also In re Methyl Tertiary Butyl Ether (“MTBE”) Product Liability Litigation, 438 F.
Supp. 2d 291 (S.D.N.Y. 2006); Barasich v. Columbia Gulf Transmission Co., 2006 U.S. Dist. LEXIS
86062 (E.D. La. Sept. 28, 2006), at — 8“10.
Insurance and Climate Change Litigation 233


the plaintiff seeks monetary damages. Actions aimed at regulatory compliance are
generally outside the scope of general liability insurance coverage irrespective of
whether the defendant is a public or private entity. In addition, government entities
frequently self-insure or “go bare” without liability insurance in place. To date,
the most prominent example of what I call “regulatory” climate change litiga-
tion “ lawsuits directed toward prompting improved regulatory responses to climate
change “ is Massachusetts v. EPA,8 in which several states successfully challenged
the EPA™s view that it was not authorized under the Clean Air Act to regulate green-
house gas emissions from new motor vehicles and that the stated reasons for its
refusal were “consistent with the statute.”9
Actions that seek judicially mandated emissions reductions directly from private
parties are also unlikely to implicate third-party liability insurance unless the plaintiff
seeks money damages from a defendant. Standard general liability policies agree to
pay the amounts for which a policyholder is liable “as damages,” a requirement that
generally has been held to preclude coverage for actions against the policyholder
that seek only declaratory or injunctive relief.10 The plaintiffs in the bulk of climate
change cases to date seek a change in government policy or a change in defendant
behavior rather than a monetary award.11 For example, in Connecticut v. American
Electric Power Co.,12 the plaintiffs sought an order forcing the defendant utilities
to abate the “public nuisance” aspects of their business activity but did not request
the type of “damages” that are traditionally required to invoke liability insurance
coverage.13
Despite the inapplicability of insurance questions to many of the lawsuits to
date, there exists potential for substantial liability insurance involvement in climate
change litigation seeking damages from private parties through formulations like the
one in California™s recent lawsuit against automobile manufacturers. In California v.

549 U.S. 497, 504 (Apr. 2, 2007).
8

See id. The Massachusetts v. EPA majority (Justices Stevens, Kennedy, Souter, Ginsburg, and Breyer)
9

found that the plaintiff states had standing to challenge the agency action, that the statute clearly
provided the EPA with the requisite authority to regulate, and that the agency™s proferred reasons for
refraining to consider action were meritless. See 549 U.S. at 504, 514“35. Chief Justice Roberts and
three other Justices (Scalia, Thomas, and Alito) dissented.
See Barry R. Ostrager & Thomas R. Newman, Handbook of Insurance Coverage Disputes
10

§§ 5.01, 5.02 (12th ed. 2006); Jeffrey W. Stempel, Stempel on Insurance Contracts §§ 9.03;
14.01“14.04, 14.09 (3d ed. 2006); Eugene R. Anderson, Jordan S. Stanzler & Lorelie S. Masters,
Insurance Coverage Litigation §§ 3.01“3.05 (2d ed. 2000 & Supp. 2006), Jerry, supra note 4, § 111;
Allan Windt, Insurance Claims & Disputes ch. 4 (3d ed. 1995).
See, e.g., Nw. Envt™l Def. Ctr. v. Owens Corning Corp., 434 F. Supp. 2d 957 (D. Or. 2006); Korinsky v.
11

EPA, 2005 U.S. Dist. LEXIS 21778 (S.D.N.Y. Sept. 29, 2005); Friends of the Earth, Inc. v. Watson, 2005
U.S. Dist. LEXIS 42335 (N.D. Cal. Aug. 23, 2005); see also Cent. Valley Chrysler-Jeep v. Witherspoon,
2006 U.S. Dist. LEXIS 67933 (E.D. Cal. Sept. 11, 2006); In re Quanti¬cation of Envtl. Costs, 578
N.W.2d 4794 (Minn. 1998).
406 F. Supp. 2d 265 (S.D.N.Y. 2006).
12

See Complaint, Connecticut v. Am. Elec. Power Co., available at http://www.ct.gov/ag/lib/ag/press_
13

releases/2004/enviss/global%20warming%20lawsuit.pdf.
Jeffrey W. Stempel
234


General Motors, the State of California notes that auto emissions account for more
than 30 percent of carbon dioxide emissions in California and contends that the
defendants, by promoting carbon emissions, contribute substantially to global warm-
ing, producing adverse impacts on the State.14 The California complaint is styled
as one sounding in federal common law and California public nuisance law and
seeks declaratory relief. More important for insurance purposes, the complaint also
speci¬cally requests an “[a]ward [of] monetary damages” and the declaratory relief
request is “for such future monetary expenses and damages as may be incurred by
California in connection with the nuisance of global warming.”15
The California action seeks compensatory damages against the automakers
because the State has suffered: “reduced . . . snow pack (a vital source of fresh water)”;
“an earlier melting of the snow pack”; “raised sea levels along California™s coastline”;
“increased ozone pollution in urban areas”; and “increased . . . threat of wild¬res.”
In addition, the complaint alleges that as a result of climate change caused in part
by auto emissions, the State has expended substantial funds “assessing impacts and
preparing for the inevitable increase in those impacts and for additional impacts,”
including expenditures already made “to address the declining snow pack and earlier
melting of the snow pack in order to avert future water shortages and ¬‚ooding.”16
These contentions of property damage and ¬nancial consequence due to global
warming are made throughout the complaint.17 The complaint arguably alleges
bodily injury to California residents as well, contending that climate change is “hav-
ing severe impacts on the health and well-being of California™s residents” and on
the State™s health-care system because adverse climate change increases “the fre-
quency, duration, and intensity of extreme heat events, conditions that are favorable
to the formation of smog,” which increases “the risk of injury or death caused by
dehydration, heatstroke, heart attack, and respiratory problems.”18
Due to these allegations of property damage and bodily injury, California v.
General Motors appears to trigger a duty of the defendant™s insurers to defend against
the litigation and raises the prospect that commercial liability insurers may be forced
to become involved in climate change litigation. Depending on how appellate
courts rule in this and other pending nuisance actions, similar cases could perhaps


See Complaint, California v. Gen. Motors Corp., supra note 6, at ¶ 3.
14

See id. at 14 (“Relief Requested” 2, 3).
15

See id. 1, 4.
16

See id. 21 (alleging “signi¬cant damage” to the state™s natural resources); 43 (injured land held in public
17

trust by state); 45 (injury to “natural resources, including water, snow pack, rivers, streams, wildlife,
coastline, and air quality”); 46 (disruption of water storage systems); 47 (signi¬cant increase in average
temperatures in Sierra Nevada mountain region); 48 (detailing further damage to rivers, streams, and
wildlife due to shrinkage of snow pack); 49 (“greater risk of ¬‚ooding”); 51 (increased ¬‚ooding); 52
(beach erosion, beach closures, costs to rectify beach problems); 53 (disappearance of sandy beaches,
shoreline erosion leading to increased ¬‚ooding); 54 (increased salt in¬ltration into fresh water); 56
(“increased risk and intensity of wild¬res, risk of prolonged heat waves, loss of moisture . . . and related
impacts on forests and other ecosystems, and a change in ocean ecology as water warms.”).
See id. 55.
18
Insurance and Climate Change Litigation 235


proceed and trigger insurer defense duties. The possibility of this scenario makes an
exploration of insurance coverage for climate change litigation critical.


2. APPLICABLE INSURANCE COVERAGE FOR CLIMATE CHANGE
LITIGATION

2.1. The History, Nature, and Structure of General Liability Insurance
Large automakers typically purchase comprehensive or commercial general liability
(“CGL”) insurance. The CGL policy was created by the insurance industry during
the 1940s by fusing together a number of other liability insurance products, princi-
pally owner™s public liability insurance (“PL”) with owner™s, landlord™s, and tenant™s
(“OTL”) insurance.19 The CGL policy ¬rmly institutionalized what had been a
growing practice among liability insurers since the 1920s: the “duty to defend” in
which, as part of the liability insurance product, the insurer agreed not only to pay
tort judgments against the policyholder (provided there was no applicable exclusion
to coverage) but also to defend the lawsuits brought by plaintiffs against the policy-
holder even if the suit was “groundless, false or fraudulent.”20 Liability insurance in
effect became “litigation insurance.”
Over the years, courts and insurers have adopted the view that a liability insurer™s
duty to defend is “broader” than its duty to indemnify because the insurer must
defend any suit that raises a “potential for coverage” while the insurer need only
pay judgments or settlements that in fact fall within coverage.21 If there are facts
known to the insurer (or made known by the policyholder) that create a potential
for coverage, most states require the insurer to defend even if these facts are not
set forth on the face of the plaintiff™s complaint.22 Over time, insurers amended
the CGL (substantially in 1955, 1966, 1973, and 1986)23 but retained its breadth.
CGL insurers defended hundreds of thousands of lawsuits and paid billions of
dollars in settlements or judgments. In many cases, the plaintiffs™ claims in these
lawsuits were initially viewed as exotic or quixotic. For example, asbestos liability,
pollution liability, strict product liability, and liability for inadequate security are


See Stempel, supra note 10, § 14.04[A]; Elmer W. Sawyer, Comprehensive Liability Insurance 12
19

(1943); S.S. Huebner, Kenneth Black, Jr. & Robert S. Cline, Property and Liability Insurance
ch. 6 (2d ed. 1976).
See Stempel, supra note 10, § 14.01[B].
20

See Windt, supra note 10, §§ 4.01“4.03; Ostrager & Newman, supra note 10, § 5.02; Anderson,
21

Stanzler & Masters, supra note 10, § 3.01“3.05.
See Anderson, Stanzler & Masters, supra note 10, § 3.03; Jerry, supra note 3, § 111. See, e.g.,
22

Fitzpatrick v. Am. Honda Motor Corp., 78 N.Y. 61, 575 N.E.2d 90, 571 N.Y.S.2d 672 (1991).
See Donald S. Malecki & Arthur L. Flitner, Commercial General Liability Insurance (8th
23

ed. 2005); Anderson, Stanzler & Masters, supra note 10, § 1.02 and Appendix A; see also George C.
Tinker, Comprehensive General Liability Insurance “ Perspective and Overview, 25 Fed™n Ins. Couns.
Q. 217 (1975) (extensive discussion of 1973 revision); John J. Tarpey, The New Comprehensive Policy:
Some of the Changes, 33 Ins. Couns. J. 223 (1966) (describing 1966 revision).
Jeffrey W. Stempel
236


claims for relief that initially met with skepticism by commercial defendants and
their insurers but ultimately proved viable causes of action.
Where certain types of litigation became unduly problematic or expensive, insur-
ers ceased covering them. For example, the 1986 revisions to the CGL policy
included a broad exclusion of all asbestos-related claims as well as what is now known
as the “absolute” pollution exclusion.24 During the past twenty years, the CGL policy
has also been narrowed in other ways that may be pertinent to insurance coverage
for climate change defendant policyholders. For example, CGL policies since 1986
are more likely than earlier policies to be written on a “claims-made” basis, in which
a third party™s action against the policyholder (rather than injury itself) is the trigger
of coverage, a change that can limit the applicability of earlier years of insurance
coverage. Some modern CGL policies are also written on a “defense costs within
limits” basis in which funds spent defending litigation are applied to reduce the
amount of remaining policy limits available to pay claims, effectively shrinking the
overall insurance protection enjoyed by the policyholder. Nonetheless, claims like
those of the California v. General Motors case may trigger application of older poli-
cies that lack such restrictive provisions because defendant conduct contributing to
climate change arguably extends several decades into the past.


2.2. Liability Insurance Coverage for Injuries In¬‚icted by Business Policyholders
and the Liability Insurer™s “Duty to Defend” Climate Change Lawsuits

2.2.1. The Breadth of the CGL Insurer™s Duty to Defend
Climate change lawsuits seeking monetary damages, such as California v. General
Motors, pose a signi¬cant possibility of insurers being required to defend.25 As noted
earlier, the California Attorney General™s complaint contains several allegations that
the defendant automakers caused “property damage” to the State within the meaning
of the CGL policy. Under the standard form CGL policy, covered property dam-
age is de¬ned as “physical injury to tangible property.”26 The California complaint
alleges erosion (which is physical) of beaches and coastline (which are tangible);


The 1986 revisions to the CGL made changes in terminology that were designed to make it less likely
24

that courts would seize on the breadth of some of the policy language to require coverage in cases
beyond the contemplation of insurers subscribing to the basic CGL form.
See TAN 14“19, supra.
25

See, e.g., Insurance Services Of¬ce, Commercial General Liability Form CG 00 01 10 01 (2000). The
26

Insuring Agreement in Section 1, Coverage A provides: “We will pay those sums that the insured
becomes legally obligated to pay as damages because of ˜bodily injury™ or ˜property damage™ to which
this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking
those damages. . . . We may, at your discretion, investigate any ˜occurrence™ and settle any claim or
˜suit™ that may result.” In the De¬nitions section of the CGL policy, “property damage” is de¬ned as
“physical injury to tangible property.”
Insurance and Climate Change Litigation 237


¬‚ooding (physical injury) to land (tangible property); shrinkage (physical) to snow-
pack (tangible); and warming or pollution (physical) of the atmosphere (tangible,
although some insurers may dispute that air is tangible).27
The complaint™s allegations of “increased threat” of ¬‚ood, wild¬res, or other
calamities probably fail to satisfy the CGL de¬nition of property damage because
these are not allegations of physical injury to tangible property. Similarly, the com-
plaint™s allegations that the state must engage in preventative measures in response
to global warming28 are not allegations of actual physical injury today and thus may
not be covered unless the need for future state expenditures is linked to property
loss that has already befallen California. Preventive measures designed to avoid
future loss are often considered outside of the scope of liability insurance cover-
age. Conversely, the defendant policyholders may successfully argue that if they
are required to fund California™s preventive measures, necessitated by defendants™
creation of a public nuisance, this constitutes currently cognizable injury and cov-
ered “property damage” within the meaning of the CGL policy. The presence of
any uncovered allegations does not vitiate a liability insurer™s duty to defend. The
ironclad legal rule in all states is that the presence of a single allegation creating a
potential for coverage requires the insurer to defend the entire lawsuit against the
policyholder.29


2.2.2. The Requirement that the Policyholder Submit the
Claim to the Insurer for Defense
Under the rules of insurance, the policyholder must make a timely “tender” of
the claim to its insurer in order to trigger this duty.30 Presumably, the automaker
defendants will do so unless there are business factors militating against submitting
the case to the respective insurers. The automaker defendants presumably have
a strong incentive to notify their insurers and to seek a defense so that they can-
not be accused of giving late notice that prejudices the insurer™s opportunity to
defend, and therefore excuses the insurers from coverage otherwise provided under
the CGL.31


See TAN 14“19, supra.
27

See, e.g., Complaint, California v. Gen. Motors Corp., supra note 5, 49, 56, 63.
28

See Stempel, supra note 10, § 9.03[C]; Jerry, supra note 3, § 111. See, e.g., Aerojet-Gen. Corp. v.
29

Transport Indem. Co., 948 P.2d 909, (Cal. 1997); Buss v. Sup. Ct., 939 P.2d 766, (Cal. 1997).
See Stempel, supra note 10, §§ 9.01, 9.03; Jerry, supra note 3, §§ 81[a], 111. See, e.g., Country Mut.
30

Ins. Co. v. Livorsi Marine, 856 N.E.2d 333 (Ill. 2006); Gazis v. Nat. Catholic Risk Retention Group,
Inc., 892 A.2d 1277 (N.J. 2006).
However, it is possible that some of the automaker defendants will attempt to defend the California
31

claim without insurer assistance in order to maintain peaceable relations with insurers, who might
be less inclined to sell coverage in future years should they become embroiled in protracted test
case climate change litigation. See, e.g., W. Bay Exploration Co. v. AIG Spec. Ag. of Tex., 915 F.2d
1030 (6th Cir. 1990) (applying Michigan law) (policyholder and agent delay in giving notice out
Jeffrey W. Stempel
238


2.3. The Distinction between General Liability and Auto Liability Insurance and
the Likely Inapplicability of the Auto Exclusion to the CGL Policy
As noted previously, the CGL policy is just that “ a “general” liability policy designed
to cover the basic tort liability risks faced by the average business. By intent and pol-
icy text, the CGL historically, and currently speci¬cally, excludes a number of
signi¬cant liability risks faced by some businesses. Auto risks (which are dependent
upon area population, road conditions, alcohol consumption, crime, law enforce-
ment, car safety devices, and other factors) differ from general liability risks (which
depend more heavily upon the nature of the commercial policyholder™s work, its
potential for causing injury to others, and evolving tort law doctrine), requiring
different analyses and premium setting. The instinctive notion that the automobile
exclusion might well apply in a case involving automakers, however, falters upon
closer examination. The auto liability exclusion found in general liability policies
is designed to prevent the CGL policy from becoming an unintended automobile
policy that provides coverage for a commercial ¬‚eet of vehicles as well as the general
operations of the policyholder.32 The automobile use exclusion is not designed to
strip the policyholder of core CGL coverage.
The policyholder has the burden of showing that a claim falls within the insuring
agreement. Once the policyholder has established that a claim falls within coverage,
the burden shifts to the insurer when it attempts to escape coverage on the basis of an
exclusion. A standard axiom of insurance policy interpretation is that exclusions in
a policy are strictly construed and that insurers have the burden to establish clearly
the applicability of an exclusion in order to deny coverage successfully.33
This burden cannot be met regarding the automobile exclusion. The California
complaint does not allege that GM™s “use” of automobiles caused climate change
injury to the state. Rather, California alleges that the automaker™s design, manu-
facture, sale, and distribution of inef¬cient fossil fuel engines caused destructive
climate change.34 Liability of a business for its design, manufacture, or distribution

of concern for cancellation or premium increases, resulting in loss of coverage when notice was
¬nally given).
See Malecki & Flitner, supra note 23, at 55“57.
32

See Gustafson v. Cent. Iowa Mut. Ins. Ass™n, 277 N.W.2d 609, 614 (Iowa 1979); Merced Mut. Ins. Co.
33

v. Mendez, 261 Cal. Rptr. 273 (Cal. App. 1989); Stempel, supra note 11, § 2.03; Ostrager & Newman,
supra note 11, § 1.01; see also Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., 73 F.3d 1178, 1205
(2d Cir. 1995).
In summarizing the complaint in this manner, I am being a bit charitable to California counsel, who
34

could have, in my view, done a better job of framing the complaint to make it clear that the wrongdoing
of the automakers was putting so many engines (literally and ¬guratively) of climate change into the
¬eld where their carbon emissions would wreak destructive climate change. For example, the First
Cause of Action in the complaint (public nuisance under federal common law) alleges:
Defendants have engaged in and are engaging in activities that have caused and continue
to cause injury to the State of California. Defendants, by their emissions of carbon dioxide
and other greenhouse gases from the combustion of fossil fuels in passenger vehicles and
trucks, have knowingly created or contributed to and are knowingly creating or contributing
Insurance and Climate Change Litigation 239


of products or services lies at the core of general liability as understood by insurers,
policyholders, and insurance intermediaries.
General Motors and the other automakers are not accused of bad driving. They
are being sued for alleged corporate irresponsibility in the design of their products,
which in turn caused tortious injury to State property. Seen in this light, it seems
quite clear that CGL insurers will not be able to use the automobile use exclusion as
a basis for refusing to defend against climate change lawsuits and covering successful
climate change claims.


3. ANTICIPATING INSURER DEFENSES TO COVERAGE OF CLIMATE
CHANGE CASES

In the face of requests for defense or coverage, insurers likely will interpose a number
of defenses based on policy language, exclusions, or basic concepts of insurance.
The most likely battlegrounds are discussed below.


3.1. The Problem of When an Insurer™s Responsibility Is “Triggered”
An insurance policy is issued for a particular “policy period,” usually one year. A
policy is said to be “triggered” when a covered event takes place during the policy
period.35 There are two primary triggers “ occurrence basis and claims made “ that
may be used in liability policies. By far the most common is the occurrence-based
policy, which provides that it is triggered by a claim (for duty to defend purposes) of
bodily injury or property damage taking place during the policy period as a result of


to a public nuisance “ global warming “ injurious to the State of California, its citizens and
residents. . . . [This] constitutes a substantial and unreasonable interference with public rights
in [California] including, among other things, public comfort and safety, natural resources and
public property, and aesthetic and ecological values.
See Complaint, California v. Gen. Motors Corp., supra note 6, 58“59. The Second Cause of Action
(public nuisance under California law) restates these allegations as violations of Calif. Civ. Code
sections 3479 and 3480. See id. 66“70.
Although these allegations are in my view suf¬cient to make it clear that California is aggrieved
because of what the automakers have made and sold (and not what they drove), CGL insurers
may argue that allegations that defendants have engaged in “emissions of carbon dioxide and other
greenhouse gases from the combustion of fossil fuels in passenger vehicles and trucks” suggest that the
automaker defendants caused harm through driving the vehicles rather than making them available for
others to drive. Insurers may also seize on this portion of the complaint to argue that the automakers are
being sued over the direct release of carbon gases rather than for their role in making and distributing
the engines used by others to release carbon gases, thus making the CGL policy™s “pollution exclusion”
applicable. See TAN 51“55, infra.
Because insurers bear the burden to show clear applicability of an exclusion in a CGL policy, I
am relatively con¬dent that this sort of insurer argument would not persuade courts to excuse CGL
carriers from their duties to defend the automaker defendants. However, the complaint could have
more clearly alleged harm resulting from defendant corporate activities unrelated to actual use of
motor vehicles by the defendants or their agents.
See Ostrager & Newman, supra note 10, ch. 9; Stempel, supra note 10, § 14.09[A].
35
Jeffrey W. Stempel
240


an “occurrence.”36 The triggering event under an occurrence policy is the date (or
dates) of injury to a third person or damage to the property of a third person. The
time of actual wrongdoing or negligence is not relevant.37
The public nuisance action commenced by California would appear not to
require the state to prove any particular knowledge of the harm being wrought
in order for plaintiffs to prevail. However, once discovery ensues in litigation, very
damning facts about defendant knowledge could be unearthed. Insurers could try to
use this type of information to argue that the injuries in¬‚icted upon plaintiff by the
policyholder were not “accidental” and therefore need not be defended under the
CGL policy.38 For example, in the asbestos litigation, the evidence unearthed dur-
ing discovery showed that some manufacturers were aware of the medical evidence
of asbestos danger as early as the 1930s, some three or four decades prior to the initial
plaintiff claims.39 A similar scenario could unfold in cases such as the California cli-
mate change litigation (assuming that courts do not foreclose the litigation entirely
on the grounds that it is too speculative or novel). Because its claim for relief sounds
in nuisance, California may be able to succeed without even needing to prove that
the automakers had any reason to know of the harmful consequences of the use of
their products.40
To the extent that defendant knowledge or state of mind matters in a nuisance
action, automakers likely have been aware of auto pollution dangers since at least
1970, when the dangers were of suf¬cient concern to Congress to prompt passage
of the Clean Air Act.41 Although climate change may only have recently achieved a
high public pro¬le and potential saliency as a political issue, it is not unreasonable
to argue that as a scienti¬c matter, the posited linkage between carbon fuels and
environmental harm has been well established for approximately forty to ¬fty years,
with the linkage to climate change seriously discussed for more than twenty years.
Even in the absence of a successful public nuisance claim, if automakers are charged
with actual or constructive knowledge on these points, it may not be far fetched to
impose liability upon them for continuing to manufacture and market vehicles that
produced very high levels of carbon dioxide emissions into the marketplace.
The prevailing view is that an occurrence basis policy is triggered by “actual injury”
but that the injury or property damage need not be visible, palpable, or manifest. So
long as property damage can be shown to have occurred at least in part in a policy


See Ostrager & Newman, supra note 10, ch. 9; Stempel, supra note 10, § 14.09[A].
36

See Ostrager & Newman, supra note 10, ch. 9; Stempel, supra note 10, § 14.09[A].
37

See TAN 44“47, infra.
38

See Paul Brodeur, Outrageous Misconduct (1985).
39

See, Restatement (Second) of Torts § 821E (1979) (discussing elements of private nuisance). Public
40

nuisance is de¬ned as “an unreasonable interference with a right common to the general public.”
See Restatement § 821B. Accord Dan B. Dobbs & Paul T. Hayden, Torts and Compensation
670“76 (5th ed. 2005); Dan B. Dobbs, The Law of Torts §§ 465“470 (2000).
See 42 U.S.C. § 7521(a)(1).
41
Insurance and Climate Change Litigation 241


year, the CGL policy for that year is triggered.42 Particularly at the duty to defend
stage of the litigation, it would appear impossible to use the face of the California
complaint to preclude the triggering of many of the automakers™ CGL policies. If
this is correct, there may be decades of CGL policies at risk in the California climate
change litigation and in similar lawsuits in progress or on the horizon. It is unlikely
that insurers will be able to limit coverage to only a few policies or to only the more
modern policies that contain additional defenses to coverage.


3.2. Lack of an Occurrence/Expected or Intended Injury/Lack of Fortuity
Whatever policies are at issue, CGL insurers are sure to argue that climate change
claims are outside the scope of CGL coverage because the claimed damage results
from the volitional conduct of the defendants and therefore does not satisfy the
de¬nition or concept of an “occurrence” (accidentally caused injury) set forth in
the policy. In a similar fashion, insurers probably will argue that the climate change
damage alleged by plaintiffs results from an intentional act or was “expected or
intended” from the standpoint of the policyholder and that the claims are therefore
excluded. Although insurance is available only for fortuitous, accident-like losses
and not for losses willfully brought about by the policyholder,43 it is unlikely that
insurers can defeat policyholder requests for climate change coverage on this basis.
The California complaint, for example, is styled as a public nuisance action,
which may succeed in imposing liability on the automaker defendants almost with-
out regard to whether the fault or state of mind of the defendants because nuisance
liability appears to stem more from the consequences of the defendants™ activity than
from the reasonableness of the activity. However, as noted here, insurers may argue
that because nuisance requires an “intentional” invasion of property, any success-
ful nuisance suit would require a ¬nding of nonfortuitous, intentional conduct.44
Although perhaps initially beguiling, such arguments should fail.
Notwithstanding that fortuity-based defenses to CGL coverage travel under names
such as the “intentional act” exclusion, the exclusion does not bar coverage merely
because a defendant™s act was volitional. Rather, coverage is barred only when the
policyholder as a matter of subjective state of mind intended to in¬‚ict injury or
actually knew that the claimed injury was practically certain to take place as a
result of the policyholder™s conduct.45 Climate change defendants may have fully
intended to conduct business, but there is at this juncture nothing to indicate that
they intended to contribute to destructive climate change or that they were practically
certain that their activities would bring about deleterious climate change.


See Stempel, supra note 10, §§ 14.09[A][1], 14.05[b][2].
42

See id. § 1.06[A]; Jerry, supra note 4, §§ 63“63C.
43

See TAN 44, supra.
44

See Stempel, supra note 10, § 1.06.
45
Jeffrey W. Stempel
242


For example, the California v. General Motors complaint, although styled as a
public nuisance action, suggests negligence and perhaps even callous corporate
disregard. However, nothing on the face of the complaint or inherent in the nature
of the action suggests that the automaker defendants intended to create a public
nuisance or to in¬‚ict harm on any third parties or the public generally. They may
have been sadly oblivious to the impact of their products and too shortsighted
to see the wisdom of more fuel-ef¬cient, environmentally sensitive vehicles. But
these corporate shortcomings do not make them intentional despoilers. Negligent,
reckless, or even irresponsible conduct is not the same as conduct done with the
intent to in¬‚ict injury upon others. Although California sues the automakers for
doing what they intended to do (make cars with fossil fuel engines), the State does
not allege that automakers speci¬cally intended to effect adverse climate change.46
Mere intent to conduct activity that leads to liability claims does not remove those
claims from the broad scope of CGL coverage.


3.3. The Number of Occurrences and Available Policy Limits
CGL policies provide that the insurer™s obligations end when the total policy limits
are exhausted from the payment of judgments or settlements, so long as the expendi-
tures have been reasonably made in good faith.47 Thus, if an insurer is not recklessly
or intentionally paying out its limits in order to terminate any defense obligations,
it is possible for both the insurer™s duty to pay claims and duty to defend to come
to an end. Large auto manufacturers facing product liability and other substantial
claims may have already exhausted much of their insurance that would otherwise be
available to pay a successful global warming claim. However, so long as any single
insurance policy retains even a dollar of available, unexhausted coverage, the CGL
insurer must defend a potentially covered claim.
The California climate change litigation presents an interesting problem for causal
analysis in determining the number of occurrences. On one hand, the manifestations
of climate change contained in the State of California™s complaint can be seen as
having been caused by a single corporate policy of building vehicles that produce
carbon emissions. At the other end of the spectrum, each relatively discrete instance
of injury from climate change (e.g., erosion of this beach or of that coastline, melting
of snowpack on Mountain A or on Mountain B, etc.) could be construed as a separate
occurrence. In between, a court could ¬nd separate causes based on differentiating
among corporate decisions about engine design, fuel ef¬ciency, whether to warn, or
even on the creation of each and every individual car model for the respective years
of development.


See TAN 14“19, supra (discussing allegations of California complaint).
46

See, e.g., ISO CGL Policy Form No. CG 00 01 10 01, supra note 26.
47
Insurance and Climate Change Litigation 243


As a general matter, it appears that courts tend to determine a number of occur-
rences in a manner that maximizes coverage for the policyholder.48 Consequently,
a realistic prospect is that courts will identify a set of discrete defendant decisions or
actions as key events by automakers that have substantially contributed to climate
change. For example, a court might regard each engine type or each line of prod-
ucts (e.g., heavy trucks, consumer trucks, SUVs, passenger automobiles) as separate
occurrences causing climate change injury. Whatever course taken by the courts on
the issues of occurrence and policy limits (presuming that courts are willing to let
California go forward with its effort to achieve a pathbreaking imposition of liability),
it is unlikely that insurers will be able to dramatically limit their coverage exposure
on the basis of arguments concerning the number of occurrences.


3.4. The Pollution Exclusion
As previously mentioned, modern insurance policies (issued after 1986, and to some
extent, from the 1970s onward) often contain a pollution exclusion that if clearly
applicable may preclude even the potential for coverage necessary to invoke the
CGL insurer™s duty to defend. Insurers have enjoyed considerable success invoking
the absolute/total pollution exclusion to bar coverage whenever a plaintiff™s claim
against a policyholder involves chemically related injury, even when the liability
does not involve classic instances of pollution such as smokestack fumes, ef¬‚uent
runoff, or wetlands contamination. Many courts also have prevented the absolute
pollution exclusion from being construed so broadly as to gut core general liability
coverage,49 but other courts have been very willing to read the exclusion broadly,
notwithstanding the axiom that exclusions are to be narrowly construed against
insurers.50
Against this jurisprudential backdrop, insurers would have considerable ground
for arguing that climate change claims are pollution-related claims. But even if the
insurer view prevails on this point concerning construction of the absolute pollution
exclusion, policyholders may still have substantial CGL coverage for climate change
claims. Prior to the 1970s, many CGL policies contained no pollution exclusion at all.
Furthermore, before the mid-1980s, numerous policies contained only the quali¬ed

See Jerry, supra note 3, § 65.
48

See, e.g., Stoney Run Co. v. Prudential-LMI Commercial Ins. Co., 47 F.3d 34, 37 (2d Cir. 1995) (apply-
49

ing New York law) (coverage for claims arising out of carbon monoxide poisoning from defectively
installed furnace); Associated Wholesale Grocers, Inc. v. Americold Corp., 934 P.2d 65 (Kan. 1997)
(coverage for damage to inventory due to smoke from nearby ¬re); W. Am. Ins. Co. v. Tufco Floor-
ing E., Inc., 409 S.E.2d 692 (N.C. Ct. App. 1991) (coverage for injury stemming from inadequately
ventilated fumes released during carpet installation).
See, e.g., Deni Assocs. of Fla., Inc. v. State Farm Fire & Casualty Ins. Co., 711 So. 2d 1135 (Fla. 1998)
50

(no coverage when blueprint machine tipped over during relocation, spilling ammonia); E.C. Fogg
III v. Fla. Farm Bureau Mut. Ins. Co., 711 So. 2d 1135 (Fla. 1998) (no coverage for crop duster that
inadvertently sprayed bystanders).
Jeffrey W. Stempel
244


pollution exclusion that in many states was construed to provide coverage so long
as the policyholder did not speci¬cally intend to discharge harmful material. In the
states that interpret this version of the exclusion to bar coverage only for liability
resulting from intentional pollution-related injury, policyholders would appear to
have coverage, at least with respect to the duty to defend. In states requiring that
a pollution-related liability result from an abrupt or swift discharge of pollutants,
insurers probably would prevail, at least in cases such as California v. General
Motors, which asserts ongoing automaker misfeasance rather than any abrupt release
of pollutants.
More threatening to insurers and the ef¬cacy of the pollution exclusion is the
possibility that climate change defendants and CGL policyholders will succeed in
convincing courts that they are not being accused of actually releasing pollutants
but of having engaged in wrongful conduct that fostered the greater release of car-
bon dioxide contributing to climate change. Under this characterization of climate
change litigation, such as in California v. General Motors, neither the quali¬ed nor
the absolute pollution exclusion would seem to be applicable.
However, the decision in Massachusetts v. EPA will make such a characterization
harder. The complaint in that case51 posited that the Agency wrongfully refused
to characterize carbon dioxide as a “pollutant.” The plaintiff states™ consequent
victory in the litigation, which established that carbon dioxide can be considered
a “pollutant” subject to EPA regulation, could provide commercial insurers with a
stronger argument for imposition of the CGL pollution exclusion to bar coverage.
CGL insurers covering the post-1986 time period and D&O insurers52 with policies
containing broad pollution exclusions have signi¬cant defenses to coverage, but
pollution exclusion arguments are hardly certain to succeed even though noxious
or unwanted gases or emissions are widely regarded as “pollution.” Add this to the
signi¬cant number of potentially applicable occurrence-basis CGL policies that
may be triggered in climate change cases that could be old enough to contain no
pollution exclusion, or only the quali¬ed, “sudden and accidental” version of the
pollution exclusion, and insurers are at considerable risk of at least being compelled
to defend against climate change claims.
Exploring potential application of the pollution exclusion requires considerable
focus on the nuances of plaintiff theories of liability. For the California v. General
Motors action, even the modern, absolute pollution exclusion would appear not
to bar coverage. By both its text and its structure, the modern pollution exclusion
provision is designed to bar general liability insurance coverage for liability arising


See TAN 8“9, supra.
51

Directors and Of¬cers liability insurance or “D&O” insurance is written on a claims-made basis. The
52

D&O policies that will be “in the ¬eld” in the event that predicted shareholder suits emerge against
policyholders for failure to adequately anticipate and deal with the impact of climate change on
company fortunes will be D&O forms with modern, post-1986 pollution exclusion language favorable
to insurers. In short, D&O insurers may have a strong argument against coverage that many CGL
insurers lack.
Insurance and Climate Change Litigation 245


from a policyholder™s own polluting activities at its places of business and closely
linked operations (e.g., transport or waste disposal). Despite its breadth and broad
de¬nition of what constitutes a “pollutant,”53 the exclusion is not designed to block
coverage merely because a policyholder is sued in connection with a consumer™s
“downstream” use of a product that involves the release of chemicals or other
pollution activity.
Applied to the California v. General Motors litigation, this analysis strongly sug-
gests that even the absolute pollution exclusion is not a bar to coverage. Use of
automobile engines results in discharge of a number of “pollutants,” including car-
bon dioxide, which exacerbates deleterious climate change. But (with the exception
of product testing and test drives around a dealer™s parking lot), none of these dis-
charges are perpetrated by the policyholder. Moreover, the emissions do not take
place on policyholder premises, policyholder work sites, or in the course of policy-
holder business operations. Couple this with the fact that the pollution exclusion
is (to perhaps state the obvious) an exclusion (on which the CGL insurer bears the
burden of persuasion in the face of strict construction favoring the policyholder)
and it appears that a pollution exclusion defense will be a loser for the automaker
insurers.54
By contrast, if the plaintiffs in Connecticut v. American Electric Power Co., in
which California is one of the parties, were to obtain reversal of the political question
dismissal currently on appeal and amend their complaint against the defendant
utilities to seek monetary relief, utility insurers would have a near-ironclad defense
to coverage under the modern pollution exclusion. In Connecticut v. American
Electric Power, the plaintiffs allege that the defendants™ regular, ongoing “smokestack
pollution” at their plant sites contributed to adverse climate change. However, as
discussed previously, climate change cases arguably involve insurance policy periods
during which the relevant CGL policies contained no pollution exclusion, or only
the quali¬ed pollution exclusion.


3.5. Seeking Recoupment of Defense Costs
A number of states, including California, permit an insurer that has defended a
lawsuit involving both potentially covered claims and uncovered claims to seek
reimbursement for defense expenditures related to the uncovered claims. The


The modern CGL typically de¬nes pollutants as meaning “any solid, liquid, gaseous or thermal
53

irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste
[which includes] material to be recycled, reconditioned or reclaimed.” See CGL Policy Form, supra
note 28, § V (De¬nitions), No. 15, reprinted in Fischer, Swisher & Stempel, supra note 3, at app.
E-17.
But see Complaint at ¶ 3 and supra note 44 (a portion of plaintiff™s allegations can be interpreted as
54

suggesting that automaker defendants were actually involved in the direct release of pollutants but
Complaint as a whole is more consistent with the view that defendants are accused of selling polluting
products and not the direct release of pollutants).
Jeffrey W. Stempel
246


leading pro-insurer decision in this context was rendered by a California court.
In Buss v. Superior Court,55 liability insurers for Los Angeles Lakers owner Jerry Buss
successfully argued that they were entitled to seek recoupment of defense costs in
connection with defending a nineteen-count complaint (involving mostly uncov-
ered breach of contract allegations) against Buss that involved only one potentially
covered claim (defamation, which is covered under the “personal injury” provi-
sions of the CGL policy rather than the more commonly invoked bodily injury and
property damage aspects of the policy).56
Under Buss and similar decisions, the insurer must defend any lawsuit in which
the face of the complaint seeks monetary damages and alleges at least one poten-
tially covered claim for relief against the policyholder. However, if the insurer
can adequately separate the costs of defending the covered claims and the not-
even-potentially-covered claims in a lawsuit, the insurer may seek reimbursement
from the policyholder for defense expenditures regarding the uncovered claims. In
large or protracted litigation, the amounts at stake can be substantial. For exam-
ple, in Buss, the insurer asserted that of the approximately $1,000,000 it spent
on defense costs, only about $50,000 involved the potentially covered defamation
claim.57
States are divided over the propriety of insurer efforts to recoup fees. In two impor-
tant post-Buss decisions, Illinois and Wyoming have rejected the Buss approach
and refused to permit insurer actions to recoup fees.58 The fee recoupment issue
could affect climate change litigation in the following manner. Lawsuits seeking
to impose liability for climate change“related damage will likely contain a mix of
covered claims (e.g., for damages due to negligent in¬‚iction of property damage, or
perhaps even bodily injury, due to the defendant™s contribution to global warming
and attendant problems) and uncovered claims (e.g., for injunctive relief, for a mere
declaration of responsibility, or for a regulatory determination). Depending on the
nature of the plaintiff™s theory of the case against a climate change defendant, the
resulting litigation could center more or less on covered claims.


4. THE ECONOMIC AND POLITICAL IMPLICATIONS OF INSURER
PARTICIPATION IN CLIMATE CHANGE LITIGATION

Climate change litigation is controversial. Even many environmental progressives
are skeptical about the prospect of holding automobile manufacturers, electric util-
ities, and other commercial actors liable for the consequences of the worldwide



939 P.2d 766 (Cal. 1997).
55

See CGL Form, supra note 28, § I, Coverage B (Personal and Advertising Injury Coverage); Stempel,
56

supra note 11, §§ 14.05“06.
See, 939 P.2d 766, 771 (Cal. 1997).
57

See Gen. Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods Co., 828 N.E.2d 1092 (Ill. 2005);
58

Shoshone First Bank v. Pac. Employers Ins. Co., 2 P.3d 510 (Wyo. 1998).
Insurance and Climate Change Litigation 247


problem of global warming.59 Some of the reluctance undoubtedly stems from a
sense that it seems unfair to impose liability upon commercial actors who were
acting legally in a manner designed to make and sell products at a pro¬t. More
reluctance probably stems from concerns that climate change litigation presents
signi¬cant problems of proof of liability, causation, calculation of damages, and the
limits of tort, evidence, and civil procedure doctrine.
Even if such conduct is considered suf¬cient to ascribe liability, it remains dif¬cult
to say how much of each defendant™s respective conduct produced a recognizable
quantum of injury. Thereafter, it remains dif¬cult to place a dollar ¬gure on the
damage stemming from an individual defendant™s activity. Although a “market share”
theory of liability60 might solve some of the damage calculation dif¬culties, other
problems would remain. While one can be certain that automobile use contributes
signi¬cantly to climate change, it is harder to say that auto manufacturers breached
an established tort duty to California by engaging in commercial enterprise that was
not only legal but often actively encouraged by local governments eager to attract
auto manufacturing business that was perceived as job creating and tax-revenue
enhancing.
There is even concern that in the face of these dif¬culties, California may not
continue to pursue its claim against the automakers.61 Climate change litigation,
like many emerging causes of action, presents litigants and courts with a host of
dif¬cult issues. In addition to the issue of whether the claim has suf¬cient chance

At least this is how I interpret extensive discussion on an environmental law professors™ listserve that
59

ensued during fall 2006 in the wake of the ¬ling of the California v. General Motors complaint.
The litigation prompted at least thirty back-and-forth messages among a number of well-known law
professors, with several expressing reservations over the utility of the lawsuit.
The continuing controversial nature of climate change litigation (despite the increasing consensus
that global warming is taking place and presents a problem) is re¬‚ected in the 5“4 Massachusetts v.
EPA decision. See 127 S. Ct. 1438 (2007). Compare 127 S. Ct. at 1446 (majority opinion of Justice
Stevens joined by Justices Kennedy, Souter, Ginsburg, and Breyer) with 127 S. Ct. at 1463 (dissent of
Chief Justice Roberts, joined by Justices Scalia, Thomas, and Alito) (expressing a dramatically different
view of whether Massachusetts and other plaintiffs have legal “standing” to challenge EPA action)
and at 1471 (Justice Scalia™s separate dissent joined by the other dissenters) (expressing a dramatically
different view of the statute in question and EPA prerogatives). To perhaps state the obvious, a slight
change in Court composition could overrule the Massachusetts v. EPA holding. This division extends
far outside the Court. Ten states actively opposed the climate change regulation efforts of the plaintiff
states. See 127 S. Ct. at 1446, n.5.
See, e.g., Sindell v. Abbott Labs., 607 P.2d 924 (Cal. 1980) (assessing liability of drugmakers according
60

to their share of sales); Hall v. E.I. Du Pont De Nemours, 345 F. Supp. 353 (E.D.N.Y. 1972) (same
for unidenti¬able blasting caps). See generally Dobbs, supra note 40, § 176 (discussing market share
liability).
See Amanda Bronstad, Some of AG™s Signal Suits May Not Survive: Two Candidates Vying for AG™s
61

Of¬ce Doubt Merits of Global Warming Suit, Nat™l L.J., Oct. 30, 2006, at 4. But see Edmund G.
Brown, Jr., Letter to the Editor, Wall St. J., Feb. 12, 2007, at B6, col. 1 (new Attorney General
“would prefer to reach solutions outside of the courthouse” but defends California v. General Motors
as “well grounded in precedent”). The federal trial court dismissed California™s federal common law
nuisance claims (see supra note 6). However, this does not automatically terminate the litigation. First,
California may successfully appeal the federal trial ruling. Second, the trial court™s order speci¬cally
permits California to re¬le its state law“based nuisance claims against the automakers in state court.
Jeffrey W. Stempel
248


for success to merit continued prosecution, there are many questions regarding the
ultimate fate of inventive legal claims. As with other novel theories of liability, one
can expect the early years of climate change litigation to focus on whether such
claims can be brought at all.
A parallel perhaps lies in asbestos bodily injury litigation. During the late 1960s
and early 1970s, asbestos claims met with mixed success, but plaintifs™ counsel
pressed on during what Deborah Hensler has referred to as the “heroic” phase
of asbestos litigation.62 With the Fifth Circuit™s 1973 Borel decision,63 plaintiff™s
counsel achieved a great doctrinal victory when a federal appeals court rejected
many standard defenses and ushered in the era of the asbestos mass tort. Although
subsequent developments have raised issues of excess and greed regarding asbestos
claims,64 almost everyone now acknowledges that asbestos is a dangerous material,
that many asbestos defendants long knew of its dangerous properties but failed to warn
or protect users, and that victims are entitled to compensation.65 Climate change
litigation may achieve the success of asbestos claims or sexual harassment litigation,66
both premised on what were initially considered nearly radical theories of liability,
or it may be relegated to the category of creative but ultimately unsuccessful claims,
in the same vein as comparable worth employment discrimination litigation67 or
efforts to ban imposition of the death penalty based on data showing that the race of
the victim is strongly correlated with the jury™s decision to execute.68 Which scenario
ensues may hinge on the relative persuasiveness of plaintiff and defense counsel,
which in turn may hinge on the effectiveness of climate change defendants, insurers,
and counsel in resisting and resolving climate change causes of action. If I am correct
in this assessment, both plaintiff and policyholder counsel must engage important
practical considerations. Other climate change plaintiffs (such as the Connecticut
plaintiffs in the suit against electric utilities) should perhaps take a page from the
California v. General Motors book and seek not only declaratory and injunctive relief


See Deborah Hensler, Asbestos Litigation in the United States: Triumph and Failure of the Civil Justice
62

System, 12 Conn. Ins. L.J. 1, 5“7 (2006).
See Borel v. Fibreboard Corp., 493 F.2d 1076 (5th Cir. 1973) (applying Texas law) see also Brodeur,
63

supra note 39 (describing in detail the background of Borel case and trial court action).
See Walter K. Olson, The Rule of Lawyers 207 (2003) (criticizing high settlement values and
64

counsel fees for marginal or speculative asbestos injuries).
See Hensler, supra note 63, at 4.
65

See Vinson v. Meritor Savs. Bank, 477 U.S. 57 (1986) (adopting the view that sexual harassment in the
66

workplace constituted a violation of Title VII of 1964 Civil Rights Act).
See Alexander v. Chattahoochee Valley Cmty. Coll., 325 F. Supp. 2d 1274, 1294 (M.D. Ala. 2004)
67

(“courts have held that comparable worth claims are not cognizable under either the Equal Pay Act
or Title VII”); see also Great Am. Savs. & Loan v. Novotny, 442 U.S. 366 (1979) (rejecting as a matter
of law a 242 U.S.C. § 1985(3) claim based on alleged conspiracy to deprive plaintiff of her Title VII
rights). Thus far, courts appear receptive to defendant arguments that climate change claims are
nonjusticiable political questions involving policy choices that must be decided by other branches
of government. However, the appellate process remains to run its course, making it premature to
pronounce the death of current theories of liability in climate change litigation.
See McCleskey v. Kemp, 481 U.S. 279 (1987).
68
Insurance and Climate Change Litigation 249


against actors allegedly contributing to climate change damage, but also speci¬cally
request monetary damages from these defendants.
In addition, well-drafted plaintiffs™ complaints should take pains to allege that
the damages complained of ¬‚ow from physical injury to tangible property or from
bodily injury, including sickness or disease. Both of these pleading efforts (which
of course are not legitimate unless made in good faith and supported by counsel™s
factual investigation) will make it much more dif¬cult for any liability insurer to
successfully refuse to defend climate change claims against the policyholder. In this
way, a plaintiff alleging injury from climate change can both pursue recompense
and aid the policyholder (without consultation or collusion) in seeking optimal
insurance coverage. Alternatively, climate change plaintiffs may make a knowing
and intentional decision to avoid seeking monetary damages or current or past
property damage in¬‚icted by the respective defendants in order to attempt to ensure
that climate change defendants are unable to access liability insurance coverage and
insurer-funded defense of the claims. Similarly, plaintiffs might (where supported
by information suf¬cient to satisfy honesty-in-pleading requirements) speci¬cally
allege that defendants intended or expected to cause injury from their climate
change activities.
In this manner, plaintiffs can “ if this is their goal “ force defendants to bear the
brunt of the litigation without the aid of their insurers. Clever plaintiffs™ counsel
might even purposely plead cases in a way that makes the duty to defend ques-
tion problematic in hopes of forcing a defendant to both pay its own way at the
outset and engage in protracted coverage litigation with its insurers, perhaps even
sowing the seeds for future attorney fee recoupment disputes between insurers and
policyholders.69
Ordinarily, this is not the goal of plaintiffs, most of whom wish to maximize the
prospects for a larger monetary recovery by ensuring that the defendants™ insurers
are drawn into the action. However, climate change plaintiffs may rationally wish
to force defendants to internalize the costs of global warming litigation in order to
in¬‚ict more economic pain on the defendants in hopes that this will make defendants
more pliable regarding settlement and less likely to discount their environmental
decisions in the future.
My own view is that such a strategy would be misplaced. If courts do not smother
climate change litigation in the cradle through rejection on political question or
other doctrinal grounds, it poses a substantial economic threat, even to defendants
with plenty of insurance and the resources and expertise to battle insurers over
coverage. The U.S. Supreme Court™s willingness to decide the controversy between
Massachusetts and its allied states and the federal Environmental Protection Agency

In an adversary system, clever, ulterior motive“laden pleading of this type is generally permissible so
69

long as the complaint does not misstate or fabricate facts. However, collusion between plaintiffs and
insurers to plead a matter “out of coverage” would constitute bad faith by the defendant™s insurer.
See Lockwood Int™l, B.V. v. Volm Bag Co., 273 F.3d 741 (7th Cir. 2001) (applying Wisconsin law),
reprinted in Fischer, Swisher & Stempel, supra note 3, at 962.
Jeffrey W. Stempel
250


suggests that efforts to keep these disputes out of court on technical legal grounds
may not succeed.70 If defendants such as auto manufacturers and oil companies
can add insurance proceeds to their already ample coffers, plaintiffs may extract
suf¬cient funds to achieve signi¬cant progress in holding back adverse climate
change (provided they can mount suf¬cient proof of liability to bring defendants
and insurers to the bargaining table).
In responding to climate change lawsuits, defendants will make choices regarding
whether to defend such claims with chosen counsel or whether to tender the cases
to their liability insurers. If climate change cases grow, and if the insurance industry
becomes heavily engaged in defending such claims, one would reasonably expect
insurer involvement to shape the nature and degree of defendant responses. In
addition, one would anticipate that insurers, perhaps looking down the barrel of
another asbestos-like mass tort (unless courts roundly reject climate change theories,
a signi¬cant possibility), would consider a holistic approach to resolving such claims
and limiting their ¬nancial exposure.
Because climate change cases will involve a mixture of covered and uncovered
claims, there exists, at least in theory, substantial opportunity for policyholder defen-
dants and liability insurers to collaborate in trying to resolve climate change lawsuits
as ef¬ciently and effectively as possible. If the climate change plaintiff is a state like
California or Connecticut (rather than an individual or commercial entity paying
counsel fees), the plaintiffs also have a substantial incentive to work for resolution
rather than to “shoot the moon” in hopes of obtaining large damage awards. Although
some may decry this as de facto legislation through novel litigation, my own view
is that this sort of outcome may serve as a needed ¬lling of the vacuum created by
government inaction, opposition, or denial of the problem.
All of this suggests to me that the prospect of insurer obligations in the emerging
¬eld of climate change litigation, such as those raised by California v. General
Motors, is generally a good thing, perhaps adding an infusion of additional litigation
expertise and capital that will enable “private” dispute resolution to accomplish
some of what the national government has failed to address. At a minimum, a
commercial policyholder™s success in getting the CGL carrier involved in defense
of a claim means that the insurer money becomes part of the mix, which may
prompt more serious insurer attention to climate change claims and may provide
an additional source of funds and settlement expertise as well as additional legal
resources ensuring that climate change disputes will be thoroughly litigated and
(at least in theory) correctly decided.



See Massachusetts v. EPA, 549 U.S. 497 (2007). Accord Noel C. Paul, Student Article, The Price
70

of Emission: Will Liability Insurance Cover Damages Resulting from Global Warming?, 19 Loy.
Consumer L. Rev. 468 (2007) (“It is not unlikely that emitters of greenhouse gases will ultimately
face a public nuisance suit on the part of states™ attorneys general, similar to the tobacco litigation
brought against cigarette manufacturers in the 1990s. If plaintiffs prevail . . . defendants should receive
coverage under their standard CGL policies.”) (footnotes omitted).
Insurance and Climate Change Litigation 251


With luck, plaintiffs, defendants, insurers, and courts will recognize both the
contractual and doctrinal exposure of insurers to defense and coverage of climate
change litigation, as well as the potential gains from rational resolution of such
litigation aided by the insurer involvement and the possible infusion of insurance
policy proceeds. Better still, perhaps these parties will “make their own luck” by
prosecuting, defending, and resolving climate change litigation with an appreciation
of the potential positive role of liability insurance in addressing climate change
disputes.
PART III


SUPRANATIONAL CASE STUDIES
11

The World Heritage Convention and Climate Change:
The Case for a Climate-Change Mitigation Strategy
beyond the Kyoto Protocol

Erica J. Thorson—

INTRODUCTION

Between 2004 and 2006, nongovernmental organizations (NGOs) from several
countries submitted four petitions and a report (collectively, the Petitions) to the
World Heritage Committee1 to list certain World Heritage sites on the “List of
World Heritage in Danger” (the “in danger” list) because of the deterioration these
sites have endured as a result of climate change.2 These sites include Sagarmatha
National Park in Nepal, Huascar´ n National Park in Peru, the Great Barrier Reef
a
in Australia, Waterton-Glacier International Peace Park in the United States and
Canada, and Belize™s Barrier Reef Reserve System,3 which suffer from two of the
most dramatic effects of climate change on natural areas “ coral bleaching and
glacial ice loss.4 The Petitions argue that pursuant to their obligations under the
World Heritage Convention (WHC),5 State Parties must develop a mitigation strat-
egy that prevents anthropogenic interference with the climate system suf¬cient to
halt further deterioration of World Heritage sites threatened by climate change. At
the heart of the Petitions, then, is a call for all State Parties to the WHC to make
drastic cuts in their greenhouse gas emissions.
— Clinical Professor of Law, International Environmental Law Project, Lewis & Clark Law School,
10015 SW Terwilliger Blvd., Portland, Oregon 97219, 503.768.6715, ejt@lclark.edu. The author greatly
appreciates the valuable suggestions of Prof. Chris Wold of Lewis & Clark Law School and Peter
Roderick of the Climate Justice Programme during the preparation of this manuscript.
The World Heritage Committee implements the World Heritage Convention. It consists of representa-
1

tives from twenty-one State Parties, which are elected for terms of up to six years by the General Assem-
bly of the WHC. For further discussion of the World Heritage Committee, see http://whc.unesco.org/
en/comittee/ (last visited Aug. 25, 2006).
See http://www.climatelaw.org/media (offering links to press releases regarding the Petitions) (last
2

visited Aug. 25, 2006).
For copies of the Petitions and more information on the NGO™s action, see http://www.climatelaw.org/.
3

For a more concise summary of the relationship between climate change and coral bleaching, see
4

Contribution of Working Group II to the Third Assessment Report of the Intergovernmental Panel
on Climate Change, Climate Change 2001: Impacts, Adaptation, and Vulnerability, 361 (2001). For a
summary of the effects of climate change on glaciers and small ice caps, see id. at 208.
See Convention Concerning the Protection of the World Cultural and Natural Heritage, Nov. 16,
5

1972, 27 U.S.T. 37, 1037 U.N.T.S. 151, (entered into force Dec. 17, 1975) (de¬ning cultural and natural
heritage of “outstanding universal value”) [hereinafter World Heritage Convention].

255
Erica J. Thorson
256


The World Heritage Committee ¬rst considered the Petitions, except the peti-
tion concerning Waterton-Glacier International Peace Park (Waterton-Glacier), at
its regular meeting in Durban, South Africa, during July 2005.6 The Committee
adopted a decision recognizing the threat climate change poses to the integrity of
World Heritage sites. Moreover, it encouraged State Parties to incorporate responses
to these threats in management plans developed for World Heritage sites and
requested the creation of a working group of experts to study the effects of climate
change on world heritage.7 The expert working group called for in the decision met
in March 2006 at a meeting at the World Heritage Centre8 in Paris, France.9
One month prior to the meeting, a group of NGOs submitted the petition to list
Waterton-Glacier on the “in danger” list. This petition, along with the election of
the United States to the World Heritage Committee, raised the stakes of the review
of the Petitions because of the claim that the WHC requires State Parties to reduce
greenhouse gas emissions to protect World Heritage sites.10 The United States,
under the Bush administration, withdrew from the Kyoto Protocol, which would
have imposed a binding international obligation to reduce its emissions. At the time
of the petitions, Australia had also refused to ratify the Kyoto Protocol (though it
has since done so), despite the fact that the Great Barrier Reef had suffered a series
of devastating coral bleaching episodes linked to climate change.11 By suggesting
that the WHC requires a climate change mitigation strategy independent of the
Kyoto Protocol, the Petitions argue that all State Parties, including the United States
and Australia, may have an obligation to cut greenhouse gas emissions that exceeds
their obligations under the Kyoto Protocol or, in the case of the United States and
Australia at that time, what would have been their Kyoto Protocol obligations.

See World Heritage Committee, General Issues: Threats to World Heritage Properties, Decision 29
6

COM 7B.b (July 2005). The Petition to list Waterton-Glacier International Peace Park as a World
Heritage site “in danger” was submitted on Feb. 16, 2006.
Id. at paras. 5“7.
7

The World Heritage Centre is tasked with managing the day-to-day affairs of the World Heritage
8

Convention. For a further discussion of the World Heritage Centre, see http://whc.unesco.org/en/134/
(last visited Aug. 25, 2006).
See Decision 29 COM 7B.b, supra note 6, at para. 8.
9

See Wil Burns et al., International Environmental Law, 40 Int™l Law. 197, 199 (Summer 2006)
10

(reporting that the Bush administration continues to refuse to ratify the Kyoto Protocol, emphasizing
insead voluntary approaches and funding of technology development and transfer).
See Sydney Centre for International and Global Law, Global Climate Change and the Great Bar-
11

rier Reef: Australia™s Obligations Under the World Heritage Convention (Sept. 21, 2004) (describing
coral bleaching events and other climate change effects in the Great Barrier Reef), available at
http://www.law.usyd.edu.au/scigl/SCIGLFinalReport21_09_04.pdf (last visited Aug. 25, 2006). The
United States, Australia, and other Asian countries are collaborating on climate change issues within
the context of the “Asia-Paci¬c Partnership for Clean Development and the Climate.” The Partnership
focuses on nonbinding, voluntary mechanisms, including technology development and transfer, infor-
mation exchange and increasing national energy security, as means of combating long-term climate
change. See Burns, supra note 10, at 199 (reporting on recent atmosphere and climate developments);
see also The White House, Fact Sheet: The Asia-Paci¬c Partnership on Clean Development and
Climate, available at http://www.whitehouse.gov/news/releases/2006/01/20060111“8.html (last visited
Aug. 16, 2006).
The World Heritage Convention and Climate Change 257


The United States issued a policy and position paper prior to the March 2006
meeting of the expert working group contending that the Petitions are “invalid” for a
number of substantive and procedural reasons.12 The primary premise is that the root
cause of climate change is not necessarily anthropogenic. The United States asserts
that “[c]limate change is as old as the earth itself ” and that “there is not enough data
available to distinguish whether climatic changes at the named world heritage sites
are the result of human-induced climate change or natural variability.”13 Whether
due to U.S. in¬‚uence or not, the World Heritage Committee™s most recent decision
on climate change fails to endorse a mitigation strategy that adequately implements
the State Parties™ WHC obligations.14
This chapter examines the relationship between climate change mitigation and
the WHC and responds to the views articulated in the position paper of the United
States. The chapter concludes that because climate change is threatening world her-
itage, State Parties are obligated to take mitigation action pursuant to the substantive
provisions and the spirit of the WHC. Section 1 of this chapter provides a general
overview of the relevant WHC provisions. Section 2 brie¬‚y discusses the threat of
climate change to World Heritage sites. Section 3 examines the nature and extent
of the WHC obligations, concluding that the provisions of the WHC create legally
binding duties despite qualifying language; it then applies the WHC obligations to
the threats posed by climate change and suggests that the WHC requires that State
Parties adopt a “deep cuts” mitigation strategy. Section 3 also explores the failures of
the World Heritage Committee™s climate change efforts to date. Section 4 concludes
that although the Petitions have heightened attention to climate change within the
WHC, the protection of world heritage requires that the World Heritage Committee
and State Parties to the WHC take more proactive mitigation action sooner rather
than later.


1. OVERVIEW OF THE WORLD HERITAGE CONVENTION

The General Assembly of the United Nations Educational, Scienti¬c and Cultural
Organization (UNESCO) adopted the World Heritage Convention at its seven-
teenth session on November 16, 1972.15 As of April 28, 2006, 182 countries had rati¬ed
the WHC, making it one of the most widely adopted international agreements.16
The WHC™s history re¬‚ects the global community™s growing understanding that

United States, “Position of the United State [sic] of America on Climate Change with Respect to
12

the World Heritage Convention and World Heritage Sites,” available at http://www.elaw.org/assets/
word/u.s.climate.US%20position%20paper.doc (last visited Aug. 17, 2006) [hereinafter U.S. Position
Paper].
Id. at 4“5.
13

World Heritage Committee, Issues Relating to the State of Conservation of World Heritage Properties:
14

The Impacts of Climate Change on World Heritage Properties, Decision 30 COM 7.1 (July 2006).
See http://whc.unesco.org/en/169/ (detailing history of the World Heritage Convention) (last visited
15

Aug. 25, 2006).
See http://whc.unesco.org/en/statesparties/ (last visited Aug. 9, 2006).
16
Erica J. Thorson
258


conservation of culture and nature requires international cooperation and com-
mitments.17 As Ren´ Maheu, Director-General of UNESCO during the WHC
e
negotiations, stated in an address to the drafters of the Convention, “[Member
States] should be responsible not only for combating deterioration and damage to
the cultural and natural heritage, but also for investigating their causes in order
that the evil may be attacked at its root.”18 As of March 2007, the State Parties have
inscribed 830 sites to the list, including 644 cultural sites, 162 natural areas, and 24
mixed cultural and natural properties in 138 countries.19
The “World Heritage List” is the core focus of the WHC. Article 11 of the Con-
vention provides that the World Heritage Committee must compose a list of World
Heritage sites based on inventories of world heritage submitted by State Parties.20 The
List serves as a locus for the World Heritage Committee™s energies, fund distribution,
and international protection. “Outstanding universal value” is the foundational cri-
terion for listing a site as World Heritage under the Convention, and a property may
be of “outstanding universal value” based on either its cultural or natural values.21
At its core, the WHC recognizes that the “deterioration or disappearance of any
item of the cultural or natural heritage constitutes a harmful impoverishment of the
heritage of all nations of the world . . . [they] therefore need to be preserved as part of
the world heritage of mankind as a whole.”22 The provisions of the treaty implement
the principle that international cooperation is essential to protect world heritage,
but they also explicitly respect national sovereignty.
Article 4 of the Convention de¬nes the obligations of State Parties respecting
World Heritage sites within their territories. It states that

[e]ach State Party to this Convention recognizes that the duty of ensuring the
identi¬cation, protection, conservation, presentation and transmission to future
generations of the cultural and natural heritage . . . situated on its territory, belongs
primarily to that State. It will do all it can to this end, to the utmost of its own
resources. . . .23

Thus, State Parties accept the responsibility to expend resources and take all neces-
sary actions possible to preserve World Heritage sites for future generations. To ful¬ll

The decision to build the Aswan Dam ¬rst sparked international interest in safeguarding cultural
17

monuments. The dam was to ¬‚ood the valley containing the Abu Simbel temples. Subsequent to an
appeal from Egypt and Sudan, UNESCO campaigned to safeguard the temples. Its success led to
other campaigns, and soon the idea for a convention to protect cultural heritage arose. A few years
later, the United States began work to include natural heritage. For further discussion, see id.
Address by Mr. Ren´ Maheu, Director-General of the United Nations Educational, Scienti¬c and
e
18

Cultural Organization, 72//DG/72/4, at http://whc.unesco.org/archive/1972/dg-72“4e.pdf (last visited
Aug. 22, 2006).
See http://whc.unesco.org/en/list/ (last visited Aug. 9, 2006).
19

For a complete list of World Heritage sites, see http://whc.unesco.org/pg.cfm?cid=31 (last visited
20

Aug. 23, 2006).
World Heritage Convention, supra note 5, at arts. 1 and 2.
21

Id. at preamble, sixth and seventh recitals.
22

Id. at art. 4.
23
The World Heritage Convention and Climate Change 259


this obligation, Article 5, among other things, requires that State Parties endeavor
to implement operating methods that “will make the State capable of counteracting
the dangers that threaten its cultural or natural heritage”24 and to “take the appropri-
ate legal, scienti¬c, technical, administrative and ¬nancial measures necessary for
the identi¬cation, protection, conservation, presentation and rehabilitation of this
heritage[.]”25
Although each State Party is ¬rst and foremost the protector of World Heritage
sites situated in its territory, the Convention, as stated in its Preamble, recognizes
that national effort alone is often insuf¬cient to address the threats facing world
heritage. Article 6 provides that State Parties recognize “that such heritage con-
stitutes a world heritage for whose protection it is the duty of the international
community as a whole to co-operate.”26 State Parties agree “to give their help in the
identi¬cation, protection, conservation and presentation of the cultural and natural
heritage . . . if the States on whose territory it is situated so request.”27 Finally, “[e]ach
State Party . . . undertakes not to take any deliberate measures which might damage
directly or indirectly the cultural and natural heritage . . . situated on the territory of
other States Parties to this Convention.”28 Together, these provisions comprise the
responsibility to cooperate in global efforts to protect world heritage and to ensure
that actions taken within a national territory do not cause damage or deterioration
of the world heritage situated in any other national territory.


2. LOSING WORLD HERITAGE “ THE THREAT OF CLIMATE CHANGE

The dramatic nature of the effects of climate change is most readily apparent in
ecosystem change, particularly in fragile and vulnerable ecosystems. According to
the Millennium Ecosystem Assessment Series, “[s]ome systems “ including coral
reefs, glaciers, mangroves, boreal and tropical forests, polar and alpine systems,
prairie wetlands, and temperate native grasslands “ are particularly vulnerable to
climate change because of limited adaptive capacity and may undergo signi¬cant and
irreversible damage.”29 Many examples of these ecosystems are treasured throughout
the world as World Heritage sites, and their particular vulnerability to climate change
has led to devastating and sometimes catastrophic consequences. A recent survey
by the World Heritage Centre of all State Parties of the WHC demonstrates the
nature and extent of the consequences of climate change on valuable natural areas.
The responses of eighty-three State Parties revealed that climate change threatened

Id. at art. 5(c). Article 5 also suggests that State Parties endeavor to develop comprehensive planning
24

and protection programs, train and educate protected-area staff, scientists, and community members,
and undertake scienti¬c and technical studies and research. Id. at art. 5.
Id. at art. 5(d).
25

Id. at art. 6(1).
26

Id. at art. 6(2).
27

Id. at art. 6(3).
28
29 1 Millennium Ecosystem Assessment, Ecosystems and Human Well-being: Current State
and Trends 379 (Rashid Hassan, Robert Scholes, & Neville Ash eds., 2005).
Erica J. Thorson
260


a reported 125 World Heritage sites.30 Of these sites, seventy-nine were listed as
natural or mixed heritage (of both cultural and natural signi¬cance), including
sixteen coastal areas (seven of which are coral reefs), fourteen glacier sites (seven of
which are glaciated mountain areas), twenty-eight terrestrial biodiversity sites, and
fourteen mixed biome and other sites.31 Among the concerns listed were glacial
retreat, sea level rise, loss of biodiversity, species migration and tree-line shifts, coral
bleaching, and droughts.32 The responses to this survey indicate that State Parties are
aware of the devastating consequences of climate change on world heritage, and they
further highlight how pervasive climate change consequences are in natural areas.
This chapter focuses on natural areas because the Petitions for “in danger” listing
due to climate change concern either the imminent loss of mountain glaciers or
the dying off of coral reefs. However, the World Heritage Centre survey reveals that
many man-made, cultural sites are also under threat from climate change.33 As such,
the following sections of this chapter concerning the legal obligations of State Parties
to the WHC should also be read with the protection and preservation of cultural
heritage in mind.


3. CLIMATE CHANGE MITIGATION

Although the Petitioners employed the “in danger” listing process to highlight the
devastating consequences of climate change and to urge immediate attention for
particular areas, the language of the Convention text, which is implicated when a
site is listed simply as “world heritage,” demands that State Parties engage in effective
climate change mitigation even before a site is listed as “in danger.” Climate change
mitigation is de¬ned as “an anthropogenic intervention to reduce the sources of
greenhouse gases or enhance their sinks.”34 Certainly, if climate change is causing
deterioration of World Heritage sites, then climate change mitigation is at least one
of the “appropriate” legal, scienti¬c, and technical undertakings because mitigation
is necessary to prevent total deterioration of many vulnerable World Heritage sites.
For example, although adaptation mechanisms could address ¬‚oods resulting from
glacial melt, only mitigation addresses the root cause of current glacial melt trends “
namely, an excess of greenhouse gases in the atmosphere. As was recognized by
an expert working group on climate change and world heritage, preventive actions,

May Cassar et al., Predicting and Managing the Effects of Climate Change on World Heritage: A Joint
30

Report from the World Heritage Centre, Its Advisory Bodies, and a Broad Group of Experts to the 30th
Session of the World Heritage Committee, para. 42 (2006) [hereinafter Joint Report].
Id. at para. 43.
31

Id. at para. 44.
32

Id. at para. 45“46. For example, sea level rise due to climate change threatens the World Heritage Sites
33

near the Thames River, including the Palace of Westminster and the Tower of London, because the
river™s ¬‚oodplain continues to expand. See Joint Report, supra note 30, at box 7“8 (describing climate
change effects on cultural sites).
Working Group III to the Third Assessment Report to the Intergovernmental Panel on Climate
34

Change, Climate Change 2001: Mitigation (Summary for Policymakers), at 3 (2001); see also Joint
Report, supra note 30, at para. 10 (restating the de¬nition of mitigation as “reducing the emission and
enhancing the sinks of greenhouse gases”).
The World Heritage Convention and Climate Change 261


including mitigation, “need to be taken to safeguard heritage.”35 However, the
World Heritage Committee has thus far failed to recommend the type of aggressive
mitigation strategy required by the WHC.


3.1. The Nature and Extent of State Parties™ Obligations under Articles 4, 5, and 6
The nature and extent of how the obligations set forth in Articles 4, 5, and 6 bind State
Parties “ namely, whether the operative provisions impose mere recommendations
entirely left to State Party discretion to implement or whether, in a given context,
such as climate change, they impose substantive obligations “ is a key interpretive
question. Articles 4 and 5 are broad, potentially leaving much room for State Party
discretion as to the exact nature of the respective responsibilities. They contain
qualifying language such as “as far as possible,” employ precatory verbs such as
“endeavor,” and merely require that State Parties “recognize” certain responsibilities.
In fact, some would argue that the language of Articles 4 and 5 is so broad and imparts
so much discretion that it eviscerates any binding obligation.36 The only case to
examine the nature of the obligations imposed by Articles 4 and 5 is Commonwealth
v. Tasmania, a case of the High Court of Australia.37 Despite the qualifying language
of Articles 4 and 5, a majority of the High Court of Australia determined that
both Articles impose legally binding obligations, essentially because the qualifying
language would be super¬‚uous if, in fact, no obligation existed.38 Although having

World Heritage Committee, The Impacts of Climate Change on World Heritage Properties, WHC-
35

06/30.COM/7.1, para. 13 (This document reports on the outcome of the expert working group on
climate change and world heritage, which met in Paris during March 2006, and was prepared for
presentation at the 30th Session of the World Heritage Committee, which took place in July 2006.)
[hereinafter Strategy].
See Commonwealth of Australia v. Tasmania (Tasmanian Dam Case), 158 CLR1 (1983), para. 69
36

(C.J. Gibbs) (“It is however impossible to conclude that Arts. 4 and 5 were intended to impose a legal
duty . . . on State Parties to the Convention. If the conduct which those articles purport to prescribe
was intended to be legally enforceable, the obligations thereby created would be of the most onerous
and far reaching kind. . . . The very nature of these obligations is such as to indicate that the States
Parties did not intend to assume a legal obligation to perform them.”); see also Michael I. Jeffery,
QC, An International Legal Regime for Protected Areas, in IUCN Environmental Law & Policy
Paper No. 49, 23 (John Scanlon & Francoise Burhenne-Guilmin, eds. 2004) (suggesting that the
¸
phraseology is so subjective that some argue no legal obligations may exist).
Tasmanian Dam Case, supra note 36. Although the case primarily concerned the relationship of
37

Commonwealth and State power, the decision turned, in part, on whether the WHC imposed binding
obligations and the nature of these obligations. In the case, Tasmania challenged the Australia
Commonwealth™s legislation providing for the protection of World Heritage areas. The argument
revolved around the division of powers between the Australian federal government and individual
state governments, such as Tasmania. See id. at paras. 2, 25 (C.J. Gibbs).
Id. at para. 31 (J. Mason). Judge Mason™s opinion states: “Article 5 cannot be read as a mere statement
38

of intention. It is expressed in the form of a command requiring each party to endeavour to bring
about the matters dealt with in the lettered paragraphs. Indeed, there would be little point in adding
the quali¬cations ˜in so far as possible™ and ˜as appropriate for each country™ unless the article imposed
an obligation.” See also Jeffery, supra note 36, at 23 (“Although terminology such as ˜to the utmost of
its own resources™ and ˜in so far as possible™ might be seen as adding a subjective mechanism from
which States can easily escape responsibility, it still places a legal obligation on each contracting
party.”).
Erica J. Thorson
262


found that Articles 4 and 5 of the WHC impose binding legal obligations, the Court
nonetheless recognized that the duties are so broadly articulated that State Parties
have much latitude as to how they implement the Convention. As one judge stated
in his opinion: “[T]here may be an element of discretion and value judgment on
the part of the State to decide what measures are necessary and appropriate.”39 This
discretion, however, is not without bounds. This judge further noted, “There is a
distinction between a discretion as to the manner of performance and discretion as
to performance or non-performance.”40
The Australian case clari¬es that Articles 4 and 5 impose discretionary obligations,
but international law de¬nes the nature of State Parties™ discretion. With respect
to treaty implementation, the principle of pacta sunt servanda guides State Party
discretion.41 This principle provides that States are bound by their international
agreements and that they must implement such agreements in good faith.42 Thus,
Articles 4 and 5 of the WHC impose discretionary obligations, but “good faith” is
the touchstone for implementation, and the aims of the Convention “ namely, the
protection and conservation of world heritage “ guide operationalization of State
Parties™ good faith.
Unlike Articles 4 and 5, Article 6 is not quali¬ed with language of limitation.43
The provisions of Article 6 are less discretionary, stating that State Parties are not to


<<

. 10
( 16)



>>