Firm behind climate lawsuits faces DOJ referral after court finds 'misconduct bordering on criminal'
A federal judge’s extraordinary decision to refer Hagens Berman to the Department of Justice for possible unlawful conduct escalated to an appeals court this week, marking one of the toughest challenges yet for a high-profile law firm known, in part, for its aggressive climate litigation.
The referral came as part of a lawsuit that Hagens Berman brought related to a separate topic, alleged drug-related injuries, and involved Judge Paul Diamond taking the rare step of asking the DOJ to review whether Hagens Berman acted unlawfully.
Diamond noted in an order on Dec. 2 that a court-appointed lawyer, known as a special master, found Hagens Berman engaged in a yearslong effort to bring "fraudulent" complaints in the case in the Eastern District of Pennsylvania. Hagens Berman also obstructed discovery and "doctored evidence," the special master found. The order noted that the firm’s apparent "misconduct bordering on criminal" warranted the DOJ’s involvement.
Hagens Berman has aggressively pushed back on the allegations and turned to the U.S. Court of Appeals for the 3rd Circuit for relief. The firm accused the judge of bias, noting it had recently sought Diamond’s recusal from the case and claiming the judge could be retaliating.
"To rebut the charge in the court below would risk fomenting even greater ire of the district judge—ire that would be calamitous for petitioners’ clients," Hagens Berman lawyers wrote. "To remain silent is to permit a baseless accusation leveled by an Article III judge no less, to hang like a dark, ignominious cloud over petitioners’ professional reputation."
The clash comes as Hagens Berman continues positioning itself as a go-to firm for high-risk litigation, including environmental cases, even as its track record in that arena shows mixed results.
Last month, the firm filed a class-action lawsuit on behalf of Washington state homeowners against ExxonMobil, Shell, Chevron and other fossil fuel companies. The suit alleges the companies sparked a rise in natural disasters that has driven up homeowners' insurance premiums and claims they mounted a "coordinated and deliberate scheme to hide the truth about climate change and the effects of burning fossil fuels."
But in addition to the DOJ referral, Hagens Berman has thus far struggled to secure clear victories or settlements in its climate cases and was dealt some legal blows in that realm in 2018.
Efforts to reach a Hagens Berman representative for comment were unsuccessful by press time.
Judge William Alsup, a Clinton appointee, tossed out San Francisco and Oakland’s case, which was brought by Hagens Berman against fossil fuel companies over the alleged effects of climate change. Alsup called the scope of the cities’ claims in that case "breathtaking."
"It would reach the sale of fossil fuels anywhere in the world, including all past and otherwise lawful sales, where the seller knew that the combustion of fossil fuels contributed to the phenomenon of global warming," Alsup wrote.
The cities dropped Hagens Berman as their representation after a series of adverse decisions in the case.
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The law firm also lost in a similar case that same year in New York. In that dismissal, the late Judge John Keenan, a Reagan appointee, again found Hagens Berman’s lawsuit was far too expansive.
"The City has not sued under New York law for claims related to the production of fossil fuels in New York," Keenan wrote. "The City brings claims for damages caused by global greenhouse gas emissions resulting from the combustion of Defendants’ fossil fuels, which are produced and used ‘worldwide.’"
The DOJ review, if upheld by the 3rd Circuit, could now overshadow the firm’s more recent endeavors and raises the stakes for the practice as it continues to take on ambitious cases.