Municipalities in Puerto Rico Sue Fossil Fuel Giants Under Organized Crime Law

A "first of its kind" lawsuit

by Vins

Sixteen municipalities in Puerto Rico are suing Chevron, ExxonMobil, Shell, and other fossil fuel companies for their efforts to deny the role of fossil fuel products in causing climate change.  In a November 2022 report for Common Dreams, Kenny Stancil described the lawsuit—a “first of its kind” RICO case—which seeks to hold the fossil fuel corporations financially responsible for the damages caused by the hurricanes that devastated Puerto Rico in 2017. The lawsuit contends that the 2017 hurricane season was made worse by global warming and that fossil fuel companies colluded to deceive the public about the impacts of fossil fuel products on the climate.

Although dozens of US municipalities and states have attempted to sue fossil fuel corporations for climate change-related damages, the class action suit filed by Puerto Rican municipalities is the first to do so under RICO, the Racketeer Influenced and Corrupt Organizations Act, established in 1970, to enhance the control of organized crime.

The lawsuit contends that ExxonMobil, Shell, and others colluded to deceive consumers through a “fraudulent marketing scheme” intended to convince the public that fossil fuel products do not alter the climate. As Reuters reported, the lawsuit alleges that the companies’ coordinated deception, undertaken over a period of decades, violates US racketeering and antitrust laws. The lawsuit cites what Reuters described as “a joint memo that took aim at international climate negotiations in the 1990s.”

The 2017 hurricane seasons caused more than $294 billion in damages in Puerto Rico, according to the lawsuit. Beyond catastrophic damage to critical infrastructure, including healthcare and educational facilities, two of the hurricanes, Irma and Maria, caused an estimated 4,600 deaths according to the municipalities.

A partner at one of the law firms representing the municipalities, Marc Grossman, called Puerto Rico “the ultimate victim of global warming.”

Hurricane Maria, which hit Puerto Rico in September 2017, resulted in an island-wide blackout and paved the way to the island’s power grid being completely privatized by LUMA Energy, a joint venture owned by the Canadian firm ATCO and US contractor Quanta Services, Stancil reported.

An October 2022 report in Jacobin, by Joe Wilkins, described how LUMA Energy was able to capitalize on Puerto Rico’s misfortune. In 2016 the US Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which allowed the US government to exert influence on Puerto Rico’s finances through the Financial Oversight and Management Board (FOMB). As Wilkins explained, the US pressured Puerto Rico to cut public services in order to “achieve fiscal responsibility and ultimately reestablish access to credit markets” while also denying unions the right to strike. “The FOMB’s independence from Puerto Rican lawmakers meant that it could clear the way for Puerto Rico’s public electrical company, the Puerto Rico Electric Power Authority (PREPA), to sell commonwealth assets and outsource services related to the generation and transfer of electricity,” Wilkins wrote. After the devastating 2017 hurricane season, privatization was pitched as the solution to the island’s outdated electrical grid.

Noting that Puerto Rico is an American colony without proper political representation, Ryan Cooper wrote in the American Prospect that “the root problem is political inequality
 Until this inequality is rectified, it’s a safe bet that Puerto Rico will never fully recover.”

Although Reuters covered the story, as of December 1, 2022, no major US corporate news outlets appear to have reported on the Puerto Rican municipalities’ unprecedented RICO case against Big Oil.

Sources:

Kenny Stancil, “Puerto Rican Towns File RICO Suit Accusing Big Oil of Colluding on Climate Denial,” Common Dreams, November 29, 2022.

Clark Mindock, “Puerto Rican Towns Sue Big Oil Under Rico Alleging Collusion on Climate Denial,” Reuters, November 29, 2022.

Joe Wilkins, “Puerto Rico’s Electricity Nightmare Was Brought to You by Privatization,” Jacobin, October 6, 2022.

Ryan Cooper, “Puerto Rico’s Colonial State Left It Vulnerable to Hurricane Fiona,” American Prospect, September 23, 2022.

Student Researcher: Vikki Vasquez (California State University, East Bay)

Faculty Evaluator: Mickey Huff (Diablo Valley College)