First appeal court judgments in climate-related lawsuits against German car manufacturers

On 12 October 2023 and on 8 November 2023, the Courts of Appeal Munich and Stuttgart upheld the first instance courts’ rulings which had dismissed climate-related claims brought by the German NGO Deutsche Umwelthilfe (DUH) against two German car manufacturers. Both claims are part of a series of four lawsuits in Germany seeking to compel corporations to reduce their contribution to climate change by way of injunctive relief. The other lawsuits by Greenpeace Germany against a car manufacturer and by DUH against a gas and oil company are still pending. 

Background

Since the first instance Hague District Court's decision in Milieudefensie v Royal Dutch Shell plc in May 2021, which ordered Shell to reduce its global carbon emissions (across all scopes) by 45% by 2030 (see our blog post), we have seen an increase in direct actions against companies, where claimants seek to compel corporations to reduce their corporate contribution to climate change. Taking the Shell judgment as a blueprint, DUH filed climate-related lawsuits against the two German car manufacturers in autumn 2021 (see our blog post), requesting the car manufacturers to stop distributing cars with a combustion engine after 31 October 2030 and to stop the distribution of cars with a combustion engine on the market between 1 January 2022 and 31 October 2030 if they exceed the alleged remaining budget for the car manufacturers of 604 million tons of CO₂ in total and 516 million tons of CO₂ in total respectively.  In both cases, the first instance courts had dismissed the claims as unfounded (see our blog post). These dismissals were upheld in the judgments rendered by the Court of Appeal Stuttgart and the Court of Appeal Munich.

Claimants’ reasoning 

The claims pursued by DUH are based on general provisions of German nuisance and tort law (sec. 1004, 823(1) German Civil Code), protecting the right of a free development of the personality against threats through interference by third parties which is stipulated in the German constitution. According to the claimants, the car manufacturers consuming too much of the world’s remaining CO₂ budget agreed at the Paris Summit in 2015 to maintain post-industrial warming under 1.5C. As a result of the exhaustion of the CO₂ budget, the political scope for action would be limited and radical measures to reduce CO₂ emissions would be necessary at a later date. These measures could interfere with the claimants’ right of personality protected by sec. 823(1) German Civil Code. 

The judgments

The Court of Appeal Munich held in its decision dated 12 October 2023 that there was no foreseeable violation of the claimant’s constitutional right of a free development of the personality by the defendant. According to the decision rendered by the Federal Constitutional Court on 24 March 2021, the German parliament has an obligation to specify targets for reducing greenhouse gases and to avoid infringements of fundamental rights (see our previous blog post). The Munich Court now held that the legislator has indeed sufficiently fulfilled this obligation following the decision by the Federal Constitutional Court. A possible infringement of the general right of free development of personality under civil law could therefore only be assumed if the scope of protection under civil law were to be extended further than it is currently required under constitutional law. Such extension would break new legal grounds which the Munich Court did not pursue, pointing to the large number of greenhouse gas emitters. According to the Court, genuine protection cannot be achieved via the general right of free development of the personality under civil law, without generally applicable prohibitions on harmful behaviour. Further, an alleged infringement would not be unlawful, as the defendant complied with the statutory regulations. The court also held that concrete measures that might be necessary if the Paris goals are not achieved, are currently not foreseeable. For those potential measures, the car manufacturer would not itself be responsible, since these are to be decided by the legislator. Even if the defendant ceased all sales of combustion engine cars, this would not be sufficient to certainly avoid future radical legislative measures.

In its ruling in the other DUH-case, the Court of Appeal Stuttgart similarly held that the placing of combustion engines on the market did not lead to an unlawful situation. The defendant could not be subject to obligations that go further than the obligation of the legislator to impose concrete emission budgets. As the court held, the legislator had already fulfilled its obligation through the EU climate protection package “Fit for 55”. This regulation would lead to climate neutrality for the transport sector until 2035. For this sector, the CO₂ budget is therefore already reduced, so that no further reduction measures will be necessary. From a procedural perspective, it is noteworthy that the Court of Appeal Stuttgart even rejected the appeal as “manifestly unfound” in accordance with sec. 522 (2) German Code of Civil Procedure. Under sec. 522 (2) Code of Civil Procedure the Court of Appeal is entitled to immediately dismiss an appeal if it is unanimously satisfied that the appeal has no prospects of success and does not require an oral hearing. 

Comment & Outlook 

The DUH sought to build upon the landmark decision of the Federal Constitutional Court on 24 March 2021 and to extend it to private companies, arguing that a specific emission reduction target for private companies can be derived from an unwritten duty of care or even fundamental rights. The DUH also relied upon the argumentation that had already been successful at first instance in the Shell case, in relation to a company’s duty of care to reduce it greenhouse gas emissions. So far, German civil courts have, however, been reluctant to develop similar obligations for companies, as long as the legislator has not yet set specific limits for CO₂ emissions. Unlike in the Netherlands, in Germany the actions brought against corporations seeking the reduction of corporate contributions to climate change have so far been unsuccessful. For companies, the decisions issued to date mean that if they comply with the German and European regulation on the reduction of emissions, they cannot be obliged to take further measures under civil law. 

Both Courts of Appeal did not grant further appeal to the Federal Court of Justice, but the DUH has already announced to file a request for leave to appeal to the Federal Court of Justice. Thus, it might be up to the Federal Court of Justice to ultimately decide on the claims. Irrespective of the prospects of success, it can be expected that NGOs will continue to target private companies for their (alleged) share of contribution to climate change via civil litigation.