BHP Secures Dismissal of All Claims in Puerto Rico Climate Litigation

Cleary Gottlieb successfully secured the dismissal of all claims against BHP Group Limited (BHP) on personal jurisdiction grounds in two climate-related lawsuits filed in the U.S. District Court for the District of Puerto Rico—one class action brought in November 2022 by 37 Puerto Rico municipalities and the other, a substantively identical action, brought in December 2023 by the Municipality of San Juan.

The complaints asserted federal and Puerto Rico law claims against a large group of oil, gas, and coal mining companies, alleging decades-long misrepresentations regarding the climate impacts of fossil fuels that led to two destructive hurricanes in 2017. Though one of a number of climate-related litigations in the U.S., the Puerto Rico actions were the first to assert federal RICO and Sherman Act claims.

BHP asserted a BHP-specific personal jurisdiction defense refuting the accuracy of the municipalities’ jurisdictional allegations. Cleary successfully represented BHP on similar grounds in earlier-filed Hawaii climate-related litigations (City & County of Honolulu v. Sunoco and County of Maui v. Sunoco), securing BHP’s dismissal for lack of personal jurisdiction in April 2022. BHP was the only defendant in that case to have been successfully dismissed on personal jurisdiction grounds.

In the Puerto Rico actions, plaintiffs asserted personal jurisdiction over BHP primarily on the theory that BHP imported coal into Puerto Rico from certain Colombian coal mines that plaintiffs incorrectly alleged BHP owned and controlled. In support of BHP’s individual Rule 12(b)(2) motion, Cleary submitted declarations and documentary evidence rebutting plaintiffs’ allegations regarding BHP’s purported control of the coal mines.

In granting BHP’s individual Rule 12(b)(2) motions in the Puerto Rico actions, the courts held that plaintiffs’ sole jurisdictional allegation—BHP’s purported indirect connection to the coal mines—was insufficient. The courts found that the evidence submitted by BHP affirmatively established that (1) BHP itself had no ownership interest in the mines, (2) that its subsidiaries’ corporate separateness must be respected, and (3) that veil-piercing was unwarranted. The courts also dismissed the federal RICO and antitrust claims, finding the statutory provision for nationwide service does not confer jurisdiction over a foreign defendant, such as Australian-based BHP, when served abroad.

The courts also granted the defendants’ joint Rule 12(b)(6) motion to dismiss with prejudice on statute of limitations grounds, holding there was “overwhelming evidence” that plaintiffs knew or should have known that they suffered injury and whom to sue by September 2021. The Puerto Rico municipalities have all appealed the dismissal orders, but notably, San Juan does not appear to challenge BHP’s dismissal in its appeal.

Cleary continues to monitor the appellate posture closely and is prepared to defend BHP’s jurisdictional victory should any appeal be directed at BHP.

The Cleary team is led by partner Victor Hou and counsel Boaz Morag and Charity Lee, and includes associates Isabella Riishojgaard and Deandra Fike.