Update on “climate lawsuits” – first German regional courts consider climate lawsuits unfounded

The preliminary legal statements expressed during the oral hearings at the regional courts of Detmold and Stuttgart in the climate lawsuits against Volkswagen AG and Mercedes-Benz AG indicate climate lawsuits will have a difficult time before civil courts as things stand. The civil judges see problems primarily with respect to the separation of powers, causality and illegality – issues likely to be common to all climate lawsuits against private companies. For the claimants, however, it seems that what is important is not only success in their lawsuits, but also the media coverage achieved.

Back in early September 2021, the CEOs of the environmental organisations Deutsche Umwelthilfe and Greenpeace called on three well-known German car manufacturers and others by means of civil-law claims to commit themselves in future to climate protection measures specified in more detail therein. These include, in particular, a phase-out of the sale of vehicles with internal combustion engines. After the car manufacturers, as expected, rejected a voluntary commitment in line with environmental protection associations’ ideas, lawsuits were filed in the same month against BMW AG (BMW AG lawsuit), Mercedes-Benz AG (Mercedes Benz AG lawsuit) (“Mercedes”) and Volkswagen AG (Volkswagen AG lawsuit) (“VW”) (in November 2021), among others. (For more details, see “Climate lawsuits” against German companies under scrutiny).

In the proceedings against Mercedes, the CEOs of Deutsche Umwelthilfe are seeking a reduction in emissions. They want Mercedes to (among other things) refrain from bringing passenger cars with internal combustion engines onto the market for the first time after 31 October 2030. This should only not apply if Mercedes can prove greenhouse gas neutrality for the use of passenger cars put on the market after that date. We summarised the exact pleas and motions, as well as the substantive construction in the proceedings against Mercedes in “Climate lawsuits” against German companies under scrutiny.

In another case against VW, which has clear parallels to the case mentioned above, a farmer from Lower Saxony, supported by the environmental organisation Greenpeace, is suing. According to the court (Farmer sues Volkswagen), the claimant is demanding a reduction in emissions from VW and a complete phase-out of the sale of vehicles with internal combustion engines from 2030 onwards. He claims that the land he uses for agriculture, along with the associated forest, has been damaged as a result of climate change. In the view of the claimant, the entire VW group was responsible for this, since as a major emitter of climate-damaging CO₂ it was to be held responsible, among other things, for the climate damage claimed.

In the two proceeding described below the oral hearings recently took place.

Hearing at Detmold Regional Court in late May 2022 – lawsuit has no chance of success

In late May 2022, Detmold Regional Court (Landgericht), as the first German court to handle these cases, heard the action against VW.

According to the provisional legal statements expressed at the hearing, the action does not seem to have any prospect of success (at least at first instance). The 1st Civil Division of Detmold Regional Court expressed a critical opinion, both on procedural and substantive points.

What appears particularly noteworthy is the court’s comment that it does not interpret the Federal Constitutional Court’s climate case law as meaning that it is the task of a civil court, in this case Detmold Regional Court, to impose specific emissions standards on companies. That was solely the task of the legislator, the court said (see “Climate lawsuits” against German companies under scrutiny).

The court also saw procedural difficulties in the claimant’s submission. It appears that the motions were directed at a prohibitory injunction within the meaning of section 1004(1) sentence 2 German Civil Code, whereas the facts and legal arguments referred to the elimination of an interference that had already occurred, pursuant to section 1004(1) sentence 1 German Civil Code. According to the court, it was not clear what was actually to be remedied.

The court was also critical of substantive issues, in particular the question of causality. Even claimant’s counsel admitted that causality was a major obstacle to overcome. It remained unclear whether only the emissions resulting from the use of the individual vehicles produced and placed on the market (known as Scope 3 emissions; see definition: Briefing: What are Scope 3 emissions?) or whether emissions caused directly within the company (Scope 1 emissions) or during the generation of the energy required by the company (Scope 2 emissions) should also be taken into account.

According to Detmold Regional Court, it is also doubtful whether the emissions of the entire group are attributable to VW.

Furthermore, court was critical of the asserted “right to preserve greenhouse gas-related freedom”. It said that the claimant was attempting to create another new right within the meaning of section 823(1) German Civil Code. In essence, however, the examples of carbon-emitting acts mentioned by the claimant (farm transfer, use of Twitter, etc.) were probably about the general freedom of action under Article 2(1) of the German Basic Law.

Finally, the court said it was questionable whether the production of motor vehicles with internal combustion engines was illegal at all. A violation of the law was not evident de lege lata.

Stuttgart Regional Court also considers action unfounded

Shortly afterwards, on 21 June 2022, Stuttgart Regional Court heard the case against Mercedes.

First of all, it is striking that Stuttgart Regional Court apparently did not express any reservations about the admissibility of the action (Frankfurter Allgemeine Zeitung, 22 June 2022, p21).

Nevertheless, Stuttgart Regional Court also doubted that a civil court could impose emission specifications on Mercedes without breaching the principle of separation of powers. The court raised the question of whether it should be the legislator that determines which vehicles may be produced, and when (see same article in Frankfurter Allgemeine Zeitung).

Stuttgart Regional Court also expressed concerns in terms of substantive law, especially with regard to the claimants’ line of argument.

This is as follows: If Mercedes continues to sell vehicles with internal combustion engines beyond the year 2030 and as a consequence exceeds its allocated CO₂ budget, then the legislator must excessively restrict future CO₂-emitting conduct. This would breach the claimants’ general rights of personality.

Stuttgart Regional Court also expressed considerable doubts to the effect that this was not a specific danger, but rather a hypothetical danger, which was not sufficient for the asserted claim for injunctive relief under section 1004(1) sentence 2 German Civil Code (loc. cit.).

The 17th Civil Division of Stuttgart Regional Court intends to announce how the proceedings will continue on 13 September 2022 (loc. cit.).

Duty of the legislator

The doubts expressed by the courts are justified. The “intertemporal safeguarding of freedom” developed by Germany’s Federal Constitutional Court is, as the court itself emphasises, a protective mandate for the legislator arising from the constitution. It appears that the Federal Constitutional Court did not intend to strengthen the defensive function of fundamental rights, certainly not in the context of indirect third-party effect. The concerns expressed by the regional courts with regard to emission standards enforceable in civil law is therefore correct with regard to the separation of powers.

The decision of the Federal Constitutional Court on the Climate Protection Act (BVerfGE 157, 30) explicitly states that it is up to the legislator to draw the necessary boundaries with regard to emissions conduct in order to protect the climate under Article 20a of the German Basic Law and to fulfil constitutional protection obligations (BVerfGE 157, 30). It cannot and must not be the task of the civil courts to determine emission standards (see “Climate lawsuits” against German companies under scrutiny).

Action against Mercedes already inadmissible

Unfortunately, Stuttgart Regional Court did not address the issue of admissibility of the action against Mercedes. On closer inspection, the claimants would appear to lack the capacity to sue in the first place.

This is because they are not asserting their own rights of freedom, but are rather fighting for the common good, which cannot be enforced in civil proceedings, by unjustifiably claiming to be the advocates of all people who are equally affected by climate change. Thus, the claimants are not individually and subjectively affected themselves (which would be required for them to have the right to sue) and also cannot be distinguished from the general public. The purpose of the right to sue is to avoid popular actions (actio popularis) (see Musielak/Voit/Weth, 18th ed. 2021, ZPO section 51(14) with further references), and this is what is at issue here.

Moreover, the conduct invoked by the claimants is in fact only covered by the general freedom of action. This general freedom of action is already not an absolute right and thus cannot be made the subject of a claim under section 1004(1) sentence 2 of the German Civil Code (see “Climate lawsuits” against German companies under scrutiny). This was also rightly pointed out by Detmold Regional Court in the proceedings against VW.

Claimants cannot demonstrate a specific threat

Furthermore, as Stuttgart Regional Court rightly notes, the claimants have not conclusively demonstrated the serious and specific threat of an impairment of their civil liberties required in the context of section 1004(1) sentence 2 German Civil Code.

The claimants in the action against Mercedes merely submit that placing vehicles with internal combustion engines on the market after 31 October 2030 could ultimately lead to a restriction of their leisure time activities. They should have conclusively shown, however, that a state restriction of carbon-intensive behaviour is so specific that a reliable legal assessment is possible. They did not do so.

Whether restrictions will occur and if so, which ones, is highly uncertain, as is the question of what countermeasures will be taken: it is not foreseeable which measures will be necessary to meet climate targets and when and whether they will be introduced. Moreover, the carbon budget calculated by the IPCC is not a static quantity. The increase in natural carbon sinks, for example through afforestation, and through the already existing technical possibilities for absorbing or storing carbon can considerably expand the remaining residual budget (see “Climate lawsuits” against German companies under scrutiny).

Courts see causality as a problem

The claimants themselves admit that causality is a major obstacle to overcome. The alleged impairment of the asserted rights of freedom cannot be attributed in any case in an equivalent and adequately causal manner to the placing on the market of vehicles with internal combustion engines. Moreover, the alleged attribution cannot be reconciled with the protective purpose of section 1004(1) sentence 2 German Civil Code by analogy.

Due to the marginal share of the emissions caused by the defendant companies compared to the total amount of emissions, it is already extremely questionable to attribute the exact adverse effects of climate change specifically to emissions that were (at best indirectly) caused by the defendant. The claimants are unlikely to succeed in proving this alone. Furthermore, due to the large number of global emitters of greenhouse gases, it will not be possible to determine equivalent-causal contributions to causation by individual actors, despite the calculation methods presented by the claimants. The fact that it is practically impossible to attribute damage to specific emitters (summation damage) due to the mixing of causation contributions was already established by Germany’s Federal Supreme Court in 1987 with regard to the creation of air pollutants by a large number of emitters (BGHZ 102, 350). The legal ideas established in relation to forest dieback can be transferred to climate change caused by greenhouse gas emissions (see “Climate lawsuits” against German companies under scrutiny).

Defendant companies not acting unlawfully

Detmold Regional Court correctly raised the question of whether the production of motor vehicles with internal combustion engines is illegal at all. This must be answered in the negative de lege lata.

While the claimants can base their argumentation on the rights of freedom, the defendants, by contrast, can claim the constitutional guarantees of Article 12 and Article 14 German Basic Law.

First of all, it must be taken into account that the alleged impairment of the rights of freedom has not been demonstrated in specific terms, but rather as a vague prediction fraught with various uncertainties. This already reduces the significance of the rights of freedom asserted by the claimants. The defendants, on the other hand, are very likely to suffer considerable competitive disadvantages, meaning that the constitutional guarantees of Article 12 and Article 14 German Basic Law invoked by them carry considerable weight. If the courts were to find for the claimants, the risk would be that competitors whose production was not regulated by civil law would take over the defendants’ market share. This would only relocate carbon emissions (known as carbon leakage).

The Federal Constitutional Court also states in the 4th headnote of the decision on the Climate Protection Act (see above) that the protection of future freedoms also requires that orientation be provided for the necessary development and implementation processes. A sufficient degree of development pressure must also always be accompanied by planning security (BVerfGE 157, 30 (4th headnote)).

In this respect, Article 12 and Article 14 German Basic Law require that the necessary transformation of the defendant proceeds in an orderly manner and that the defendant is also granted the necessary time to implement such a transformation. In addition, planning security is the top priority for such transformation process. It must be evaluated from an economic point of view whether the transformation, which would be the consequence of upholding the claim, would be possible at all within the period of time mentioned. In turn, the interests of all stakeholders, and especially of the thousands of employees, must be taken into account. Transformation processes that are ordered by the courts and are not feasible or at least not socially acceptable must manage without a balancing of interests, which the constitution requires the legislator to do.

In addition, the existing emission limits regulations and the European carbon certificate trading (the ETS system) must be taken into account in order to avoid contradictions. The latter already stipulates in a binding manner how many Scope 1 and Scope 2 emissions companies are allowed to release in the European Union. This also includes Scope 3 emissions from end consumers through movement of the motor vehicles produced (BeckRS 2021, 15559 (para. 4.4.46)). The standard of due diligence under civil law was concretised by the regulations on European emissions trading. Further requirements cannot be imposed on companies within the scope of application of the ETS system, as the regulations on emissions trading are conclusive in this respect; this was also recently confirmed by the District Court of The Hague (cf. loc. cit.; Chatzinerantzis/Appel in: NJW 2019, 881 (885); Spieth/Hellermann in: NVwZ 2020, 1405 (1408)) .

Moreover, these are legislative acts that are already the result of a balancing of interests (see “Climate lawsuits” against German companies under scrutiny).

“Strategic litigation” probably the main aim

The overarching aim of the claimants is obviously to promote the justified issue of climate protection through the lawsuits with a high media profile. The claimants’ representative, Roda Verheyen, said with regard to a lawsuit against the German government: “Of course, Greenpeace also aims to convey its agenda publicly through the lawsuit. [...] I don’t believe that the claimants only feel a sense of success if they win in court. They also want visibility – but of course they also want their situation to improve. " (Climate lawsuit: Interview with lawyer Roda Verheyen)

This is precisely why companies need to identify their environmental law risks and assess the likelihood of corresponding lawsuits.