Litigation Nation

Luke Behnke: Welcome Litigation Nation. I'm your host, Luke Behnke, alongside my co-host, Jack Sanker. For those of you new to the show, this is the podcast where we recap the most interesting legal news stories and talk to you about what you need to know. Jack, what do you.

Jack Sanker: The White House is promulgating a rule change that would allow the administrative agencies to start calculating the economic value of natural capital.

Jack Sanker: That means fresh water, natural resources, clean soil, et cetera. To be used in future rulemaking decisions and a defamation case involving political contributions by a fossil fuel billionaire and democratic gubernatorial senatorial presidential candidate. Beta O'Rourke raises Interesting First amendment questions, all that and more.

Jack Sanker: Here's what you need to know.

Jack Sanker: Up first, way back in episode 11 of the show, which we put out in March of 2022, we covered an initial ruling from the US District Court granting an injunction on an executive order issued by the White House. That would create a new methodology for calculating the social cost of carbon nitrous oxide in methane, and that new social cost figure that would then be relied upon by administrative agencies when considering new rules or legislation that might affect the.

Jack Sanker: Now in this case, the social costs are estimates of monetized damages associated with increases in greenhouse emissions. They're intended to include the effects of on agricultural activity, human health, increased risk of flood property damages, changes to the ecosystems and other factors. Basically this social cost executive order, what was an attempt by the White House to create an index of climate ecological agricultural net negatives.

Jack Sanker: Then attempts to express those costs as a monetary figure, and once everyone can agree on the money cost of something's impact on the environment, then everyone can fairly debate the merits of policies against whatever the proposed benefits of those policies are. Basically, it's a way to take all these things that on their face are kind of intangible and turn them into something that is more tangible, which can then be considered rationally by decision.

Jack Sanker: And put a pin in that. And by the way, if you wanna hear more about that one, go ahead back to episode 11 and listen to my breakdown there. So in the news this week is a newly announced plan by the White House and the US Department of Commerce to develop a set of statistics designed to capture the value of the nation's nature and that it provides to the economy.

Jack Sanker: This is from a Law 360. Write up on the subject quote. The national strategy to develop statistics for environmental economic decisions is a collaborative effort between the White House office and science and technology policy, office of Management and Budget, and the Commerce Department. According to the agencies, national economic statistics do not account for the role in the value of underlying national assets, such as land, water, minerals, plants, and.

Jack Sanker: Without natural capital reflected in national statistics, the United States cannot fully track the role of natural capital in driving economic growth, making it harder for public and private sectors to plan for the future. The agency set a joint statement. Expanding the national economic accounting system to include natural capital will better capture the links between nature and the economy and lead to a more inclusive and comprehensive accounting of the US economy.

Jack Sanker: The idea behind the plan is that nature is a huge part of the nation's economic engine and that it's time to analyze that more closely. For example, the strategy document notes that minerals, water, pollinator species and trees form the base of many supply chains and that natural landmarks drive. Parts of the tourism economy and that nature protects infrastructure and then it boosts health.

Jack Sanker: I'll be honest, I love this stuff. I think that the, like the social cost measures for greenhouse gases, I just love the idea of a multidisciplinary group of experts trying to quantify the natural world so that policy makers can, and voters, uh, can use that data to make more rational decision. According to the piece, some of this data actually already exists, um, but it's woefully incomplete.

Jack Sanker: For example, the World Bank data suggests that between 2010 and 2018, the value of the United States held in forest and mangrove assets, forest and mangrove assets, uh, declined by 10%. And the value of 10 Mineral Resources holdings declined by 51%. Analysis of groundwater in Kansas between 1996 and 2005 revealed a decline in water wealth of about 1 billion.

Jack Sanker: While other analysis suggested that nationwide productivity from water across the United States rose 65% between 2000 and 2015. I mean, these terms to me are just so interesting. Productivity from. Uh, water wealth, uh, forest and mangrove assets. I think that these ideas of, of taking, uh, the things that, you know, we're all supposed to care about in terms of the environment and freshwater and everything else, and putting a number on them is just such a better way to bridge the gap to, you know, maybe people that don't prioritize the climate or prioritize climate change much in people who do.

Jack Sanker: So I, I think really this, um, this just sounds a lot better than the kind of vague complaints about, you know, climate change that you hear from activists. For example, if you say to people that increasing carbon production will lead to higher temperatures at some point years or decades down the road, which could lead to higher shorelines or warmer temperatures, or less yielding crops, or more frequent hurricanes in distant parts of the country, and oh, by the way, you'll probably be dead by then.

Jack Sanker: It's gonna be hard to get people. But if you say, Hey, relying on a certain fuel source as opposed to another is gonna cost X YZ dollars in terms of environmental, economic, and social damages, and that means more government spending and that means your taxes might go up, then people will get interested.

Jack Sanker: What do you think, Luke?

Luke Behnke: Yeah, I, I think two things. Number one, what a massive undertaking this is. I mean, it, it, uh, it amazes me that we have that kind of capability to. Uh, quantify, um, the types of things that you're talking about. Uh, that's, that's incredible. Number two, I, I couldn't agree more with your statement about, uh, you know, making folks care, uh, when you put numbers on things.

Luke Behnke: Um, it, uh, to me anyway, it just, it makes it more real. Um, when, when you are, when you're talking about things. Uh, like climate change. I think you're right. And I, you know, I confess to being, uh, guilty of feeling the way that you just described, which is sort of like, yeah, I get that we should do something.

Luke Behnke: But, you know, I hopefully my kids take care of it. Like, I don't, you know, I'm not walking outside and throwing litter on the ground and, you know, dumping gas from my lawnmower into my trees or whatever. But, uh, you know, I, it, it, it. People care, um, when you've got, when you've got numbers tied to these really big ideas.

Luke Behnke: And, um, I, you know, I'm, I think it's, I think it's great.

Jack Sanker: Yeah. I mean, it makes a global issue, uh, local, you know, for a lot of people. I, I remember, um, uh, reading something and, and I'll never be able to find what I was actually reading, but the gist of it was, You know, with a certain amount of rise in temperature in parts of, uh, south and Central America, the average yield from like agriculture in that area is gonna go down.

Jack Sanker: And for every x amount of, of, you know, tons of agriculture yield goes down. There's like a direct correlation between migration and so climate. Is going to cause, uh, agricultural years to go down, which is gonna cause immigration. And if you're a person who's concerned about, you know, immigration on the southern border, for example, if that's like, you know, the political issue you're worried about, then climate change is gonna cause migration along the southern border.

Jack Sanker: Like it just is. Um, so it, you know, if you are, uh, in Texas and you don't care about climate change and you, and you care about migration, like now all of a. When you think about it that way, you should care about climate change, right? It's, it's gonna affect, you know, your, what's happening in your backyard.

Jack Sanker: Um, so, you know, I mean, I, I don't know how these economists and statisticians are, are gonna do it, um, but you know, I, there seems to be a lot of pressing for it. I mentioned the World Bank data, um, about the, you know, decline in water wealth and things like that. But if you can, if you can make something like this, you know, more.

Jack Sanker: Esoteric, less kind of ethereal and more, how does this affect my everyday life? You know, how does it affect, uh, gas prices or how does it affect, uh, you know, my taxes or things like that. Then I think you'll see people, you know, really taking these policies a lot more seriously, um, rather than just kind of vague complaints about global warming and things like that.

Luke Behnke: And I'm gonna take that one step further. Maybe there, maybe once you have people caring about these, You're actually taking action on some of these things versus just complaining about it, right? It's easy to sit back and be like, oh, climate change is a problem. It's like, well, what are you doing about it?

Luke Behnke: You know? And maybe if you've got these, um, figures right, it's easy to say, well, look, here's what I'm doing about it.

Jack Sanker: And, you know, I think the other thing is like, we may be getting on a tangent here, but like, it allows the, whatever intervention that, you know, we, we decide as a country we're gonna do to be all that more specific and hopefully that more effective, you know, Right.

Jack Sanker: Like if tomorrow, for example, we bann all gas cars, like that would definitely decrease emissions by a huge amount, but that would also make a lot of people's lives a lot worse. Um, so we're not gonna do that, right? Uh, but if you could find the numbers, um, to put behind, you know, policies where hopefully you could just tweak things here and there, um, you know, you could, uh, make a certain amount of the energy economy, um, based on renewables versus phasing.

Jack Sanker: Fossil fuels entirely, things like that. Um, any data that's gonna allow, you know, smart decision makers and policy makers to do those things more accurately and effectively, um, I'm a hundred percent behind.

Luke Behnke: Yep, yep. And if it's true, if these numbers bear out, look, you can make these small sort of incremental changes in your life, and this is the difference that it would make, you know, at least for me.

Luke Behnke: Right. I think that. That would go a long way. I can't speak for everybody, but I, I, I, like you said, I think it's easier for folks to, to see these numbers, to see the, the things that they're doing in their life makes, makes changes that are bigger than just the little changes that they're making. And, uh, when you have a bunch of people making these little changes, all of a sudden you've

Jack Sanker: got a big impact.

Jack Sanker: The one last thing I want to highlight is there's the, the plan in particular talks about how, um, Pollinator species and trees form the base of many supply chains. That was like a, a sentence I had to reread. Cause I was just like, oh yeah. So they're talking about, you know, whether we have enough bees to grow food.

Jack Sanker: And I've just never worried about that for a second in my life. And now I'm like, that's actually super important. And, um, do we, you know, are, are we planting enough trees to replace the ones we're cutting down so that we can keep building houses so that. Everyone's, you know, housing prices, uh, keep going up or whatever.

Jack Sanker: Like I just, you know, this, this stuff that makes total sense when you put it in that context. But again,

Luke Behnke: yeah. And, and I'm with you and you, you don't wanna just sort of identify issues and then just sort of leave it out there and throw your hands in the air. Right. And I think if you, again, if you've got these sort of tangible, you know, tangible things that you can see happening as a result of your actions, um, that's great.

Luke Behnke: I mean, that's the only. We're gonna get to where we need to get

Jack Sanker: to. Right? Yep. I agree. I agree.

Jack Sanker: There's an interesting First Amendment case in Texas with some political implications in the news involving Beta O'Rourke, who's the. Perpetual Democratic candidate for whatever election is Next, I'm relying on a write up from an outlet called, uh, lever News. And the plaintiff in this case is a guy named Kelsey Warren.

Jack Sanker: He's a billionaire who owns a fossil fuel company that was, uh, behind the Dakota Access Pipeline. Warren is suing Beto over, uh, campaign comment. Beto made during the 2020 gubernatorial campaign regarding Warren's contributions to beta's Republican oppos. Greg Abbott, specifically Beto criticized Warren for donating a million dollars to Abbott's campaign a few weeks prior to the election and shortly after Abbott signed legislation allowing fossil fuel companies like Warren's to opt out of weatherization regulations.

Jack Sanker: Now, Warren's company is called Energy Transfer Partners, and according to its website, it moves nearly 30% of all natural gas and oil produced in the us. Beto insinuated that Warren's 1 million donation to Abbott. Linked to the law that Abbott signed shortly thereafter, which accepted Warren's company from new regulations requiring additional weatherization.

Jack Sanker: Now that that legislation was passed in the wake of the recent blackouts and gas outages in Texas, which if you can remember as I think last winter where like half the state didn't have gas or electric in the middle of a historical cold spout. So here's one of the specific comments that Beto made that Warren is suing over quote Kelsey Warren and Greg Abbott want us to stop talking about how Warren's company made over 2 billion in profits while Texans were freezing to death and then turned around and gave a million to Abbott's campaign.

Jack Sanker: Warren also complained about the many ways in which Beto frequently used the term bribery to describe the donation and what this boils down to. Probably is whether Kelsey Warren was a quote unquote public figure within the meaning of the Supreme Court jurisprudence. And more specifically, there's a kind of a subset of Supreme Court cases defining public figures and the rules around defamation.

Jack Sanker: The uh, Gertz versus Robert Welch case from 1974 in this case is most instructive. And in the Gertz case, specifically, the Supreme Court defines someone who voluntarily injects himself or is drawn. A particular public controversy and therefore becomes a public figure for a limited range of issues as a limited purpose public figure.

Jack Sanker: And this is more limited than, say, a true public figure, like a politician or a movie star or something like that, which you're generally allowed to say a lot more about before you get into trouble for defamation. Uh, there's a couple of different tests ar in the d. Federal circuits, but I, I picked one of the fourth circuit cause I think it's pretty good.

Jack Sanker: And it defines a limited purpose public figure. As someone who had access to channels of effective communication, voluntarily assumed a role in special prominence in a public controversy sought to influence the resolution or outcome of that controversy. The controversy existed prior to the publication of the Def defamatory statement and the figure retain.

Jack Sanker: The public figure status at the time of the alleged defamation, yada, yada, yada. For a public figure who is a plaintiff in a defamation suit to succeed generally, you have to prove that the defamatory statements were made with actual malice i e, with the intent to cause the plaintiff harm. This is usually a pretty high burden, and it's why defamation suits by public figures are pretty rare and they don't succeed very frequently.

Jack Sanker: Here Warren's team is saying that he is a private citizen, and there's, I think, a pretty legitimate argument to be made here on both sides. Warren's lawyer sets it out pretty succinctly, quote. What they're asking you to do here is conclude that a million dollar or any campaign contribution makes you a public figure, opens you up to attack, that you can't defend against unless you prove actual malice, and there is no precedent for that whatsoever.

Jack Sanker: Now on the one hand here, just kinda shooting from the hip, a billionaire oil magnate who donates millions of dollars to political campaigns feels like a public figure. But I understand the point that Warren's lawyer is making if simply donating a million dollars to a campaign is sufficient to make someone a public figure that has wider implications.

Jack Sanker: I mean, I've donated, donated money to campaigns in the two to three figures, not the seven figure. But I don't think that would make me a public figure. So is the T, is there a threshold, dollar amount or donations above a certain amount enough to make someone a limited purpose public figure? That idea seems kind of problematic now.

Jack Sanker: Then again, campaign contributions are constitutionally protected speech as the Supreme Court is famously ruled. And if we get back to the definition of limited public figure offered by the fourth Circuit, I think that's. So did Warren have access to effective communication? Yes. Did he voluntarily assume a role of special prominence?

Jack Sanker: Well, I think running the company that was at least partially blamed for those blackouts and gas outages in 2020, and then publicly opposing regulations to remedy the issues that most people blame the blackouts on. The lack of weatherization is voluntarily assuming a role of special prominence, especially because the company is privately held and Kelsey is the.

Jack Sanker: And did he seek to influence the controversy regarding the weatherization of utilities? It's hard to say, but if he lobbied against the weatherization bill, which I think he did, then yes, the campaign contribution to Abbott probably also checks that box. So I think that ultimately he's probably a quote unquote limited purpose public figure under this analysis.

Jack Sanker: Now, on the flip side is what if Beto loses? Criticizing the receipt of political donations and criticizing the donors for attempting to influence or even bribe politicians is kind of a fundamental principle of free speech and pretty common in our politics, right? Like that's, uh, co politics 1 0 1, but party takes money from special interests.

Jack Sanker: It's always been fair game to go after them for it. So if beta loses, it would upend what I think is a pretty normal American tradition of. Politicians on both sides, taking political donations and then lobbying corruption accusations back and forth against each other. That's like 60% of all political ad campaigns.

Jack Sanker: So with all of that, I do think ultimately that Beto is likely to probably win this. But I, I think the question posed, which is, does simply donating to a campaign make you a public figure? I think that kind of intentionally mis frames the question because this, this. Kelsey figure did a lot more than that.

Jack Sanker: Um, and donating to a campaign isn't as, does not fully entail what it was that he did in this case. I mean, he ran the company that would've been directly affected by the bill and was at least in, in the minds of a lot of people, partially to blame for those blackouts that happened, which are the reason for the bill in the first place.

Jack Sanker: So what do you think, Luke? Uh, I've got a lot

Luke Behnke: of thoughts on that, right. Number one, I, I don't think being rich makes you a, a public. I agree. Um, which I think you've touched on, and I don't, you know, I don't think there's any debate there, at least among us. I mean, other people will say, well, you know, he is got a lot of money and they conflate the two.

Luke Behnke: Uh, I don't think they're the same. Um, number two. Defamation cases are, are always hard because you gotta show, uh, damages, uh, too. And so, you know, someone says something that you don't like, you sue 'em, and then the judge goes, okay, you know what, what were the damages that were caused by this statement?

Luke Behnke: You go, well, I don't know. He called me a jerk. It's like, okay, well, did you lose a deal? Did your wife divorce you? Like, what, what is the problem with that? And, and oftentimes people can't point to any, you know, actual damages that they sustained as a result of the alleged defamatory statement. Um, and the third thing I'll say is, you know, there, there are sort of two rules, right, that I, uh, I, I generally practice by number one, you know, as a litigator you don't blow deadlines.

Luke Behnke: Number two, uh, you don't get into legal fights with billionaires. And so, um, It, you, you've said, okay. You know, I think maybe, maybe Beto wins this thing. Um, let's call this for what it is, right? I mean, that would be a pure victory. The, the reason that this billionaire is suing Beto is because he hates him and he wants to drown him, and he wants him to spend a bunch of money and he wants to be a pain in his side, right?

Luke Behnke: So I don't think the billionaire, I believe it or not, Jack, I've been in lawsuits with, uh, some billionaires. They don't really care whether they win or lose, right? I mean, they're making a point. Um, and I think, I think let's not lose sight of the fact that, um, maybe it's not a fact, but let, let, let's call this thing what it is, right?

Luke Behnke: I mean, it's a billionaire trying to cause major headaches for Beto, and I think he's gonna succeed in that regardless of what Beto wins in court.

Jack Sanker: Certainly. And, uh, I, I totally agree. Um, I I also think that there's probably like a, you know, a small cohort of, of like billionaires who like are, are always in the press.

Jack Sanker: Like, uh, like, like El. Like Jeff Bezos, who are probably like cheering this case on. They're like, yeah, I would love to be able to sue these guys who keep, who keep dragging my name. So, um, I wouldn't be surprised if there was, you know, quite the cheerleading section behind this case. Uh, legally I don't think that it, it's gonna, it's gonna work, but for all the reasons you mentioned, um, it's got some, it's got some oomph to it, you know, stranger things have happened.

Luke Behnke: Yeah. Yeah. I think, uh, I think beta's gonna think twice before making the same comments about other billion.

Jack Sanker: Certainly, which is, which is the point, right? That's a, um, you know, uh, what, uh, it's a chilling effect, right? That's, that's what that'll boil down to. And, and, um, you know, when these campaigns happen again, and when Betos running for whatever he is running for in 2024, um, you know, he probably won't repeat the same comments about donors.

Jack Sanker: And I think you could also, you could thread the needle, you know, you could, you could criticize the candidate, um, and probably criticize the company. Naming names of, you know, the owner of the company and, and, and things like that. Um, and, and that would just keep you out of the crossfire here. Um, going forward,

Luke Behnke: what do you think this lawsuit's gonna cost this billionaire if you take it through to trial?

Luke Behnke: 150.

Jack Sanker: 200? Geez, I have no idea. Say

Luke Behnke: it's that he loses that in the couch cushions in like, you know, 10 minutes. Right. Right. I mean, not even. Um, you know, put, put that in perspective and for what it's worth, follow the money.

Jack Sanker: Yeah, I agree.

Luke Behnke: That's the show for today. Uh, you could find us wherever you get your podcasts. And as always, if you have thoughts on any of these stories, let us know what you think. Can either leave your comments below or email us, talk to you in a couple.