WASHINGTON, D.C. – U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-Texas) and House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) today sent a letter to the law firm Sher Edling LLP demanding information related to the firm’s barrage of lawsuits targeting energy companies, and the role the acting administrator of the National Highway Traffic Safety Administration, Ann Carlson, played in these lawsuits while serving as a professor at UCLA Law School.

Sen. Cruz and Rep. Comer wrote:

Over the past five years, your law firm, Sher Edling LLP (“Sher Edling”), has launched a barrage of lawsuits aimed at bankrupting oil and gas companies. While people may use their resources to bring whatever cases they want—even those that may be so frivolous as to be sanctionable—it appears that left-wing funds are footing the bill for Sher Edling’s climate crusade. Radical activists are backing these lawsuits, too. Ann Carlson, the acting administrator of the National Highway and Traffic Administration (“NHTSA”), gave legal services to Sher Edling while she was a professor at University of California, Los Angeles (“UCLA”) School of Law. Ms. Carlson’s prior work for your firm raises concerns about her current efforts to extralegally create new climate policy through vehicle fuel economy standards. As the Republican leaders of the Senate and House committees with oversight over energy policy and NHTSA, we seek information concerning the third-party donations funding your firm’s climate cases as well as Ms. Carlson’s role in those lawsuits.

Sher Edling has established a niche for itself in the so-called “climate cases” field. Since 2017, Sher Edling has filed over twenty such cases on behalf of Democrat-controlled states, counties, and cities. These lawsuits distort common law causes of action—like public nuisance claims, which target wrongful conduct that directly harmed the plaintiff—and allege that oil and gas companies are liable for causing “climate change-related injuries.” Sher Edling’s lawsuits rely upon a daisy-chain causation theory: energy companies extracted and sold fossil fuels knowing that their actions caused climate change; climate change, in turn, triggered weather events like storm surges and droughts that would not have occurred but for the extraction and sale of the companies’ fossil fuels; these events damaged the state’s property and resources; and the state incurred expenses to address the damage. In effect, Sher Edling is asking courts to create novel liability for perfectly legal activities without alleging those activities directly harmed anyone.

Sher Edling purports to be taking a righteous gamble that this ludicrous argument will pan out. The firm shopped these lawsuits to jurisdictions around the country. And to convince them to sign up for what is likely to be very costly litigation, Sher Edling agreed to provide its legal services at no cost unless it obtained a “settlement against the industry.” So far, however, it is unlikely Sher Edling has earned any fees from these lawsuits, as none has settled.

It appears that Sher Edling is not really working on these lawsuits on a contingency basis, but rather the lawsuits are being funded, tax-free, by wealthy liberals via dark money pass-through funds. For example, from 2017 through 2021, the Resources Legacy Fund, which is focused on advancing “bold environmental outcomes,” gave Sher Edling over $5.2 million, including $2.4 million in 2020 alone. In 2021, the New Venture Fund, which also gears itself towards “conservation, climate, and energy issues,” gave Sher Edling $3 million. Both of these firms purportedly manage the funds of affluent elitists like Hollywood star Leonardo DiCaprio. And as these groups showered Sher Edling with millions of dollars, your law firm advanced numerous climate change lawsuits. It therefore appears that dark money—a purported concern of many who support radical climate legislation—is fueling your firm’s litigious effort to achieve a left-wing goal lacking majority support in Congress: the eradication of fossil fuels.

Mr. DiCaprio is not Sher Edling’s only friend in high places. NHTSA’s acting administrator Ann Carlson provided professional services to the firm for years, though she has remained tight-lipped about it. She did not identify the firm in her U.S. Department of Transportation recusal form. Yet on her UCLA annual reporting forms for the years 2016 through 2019 (all of which she filed in a single month just before she joined NHTSA), Ms. Carlson stated that she performed “pro bono consulting on litigation for municipalities litigating against oil companies” as a “consultant/committee member” for Sher Edling each year. Publicly-available emails further reveal that Ms. Carlson fundraised for the firm, travelled to Hawaii “to encourage Hawaii to consider a nuisance lawsuit,” and allowed students in UCLA’s Environmental Law Clinic to give assistance to Sher Edling on these climate cases. Moreover, it appears that Ms. Carlson has moved from attacking traditional energy through litigation to attacking it through regulation: on July 28, 2023, NHTSA proposed stringent fuel economy standards that, as even NHTSA admits, will make purchasing cars less affordable in the name of reducing “the impacts and risks associated with climate change.”

Sen. Cruz and Chairman Comer have requested information regarding Ms. Carlson’s work for Sher Edling, including when she worked for the firm, what she did, the specific lawsuits she worked on, and her compensation for that work. They are also seeking information regarding UCLA’s Environmental Law Clinic’s work for Sher Edling.

Sen. Cruz and Chairman Comer also requested a list of every person and entity Sher Edling received money from, except clients and vendors. 

Read the full text of this letter HERE.

BACKGROUND:

In May, following Ms. Carlson’s nomination to be administrator of NHTSA, Ranking Member Cruz sent Sher Edling a letter requesting information on these lawsuits—which yielded nothing but stonewalling from the firm. Just weeks later, the Biden administration abruptly withdrew Ms. Carlson’s nomination, in the face of significant opposition, including a letter Sen. Cruz led from Committee Republicans highlighting serious concerns about Ms. Carlson’s radical background and lack of qualifications. However, shortly after withdrawing her nomination, President Biden named her to the same position in an acting capacity, in an obvious attempt to skirt the Senate confirmation process.

Last week, Sen. Cruz led all Committee Republicans in sending a letter to President Biden, blasting the administration for violating the Vacancies Act by allowing Ann Carlson, who was effectively rejected by the Senate to be administrator of the National Highway Traffic Safety Administration (NHTSA), to serve as acting head of the agency. The Senators also assert that the actions that Carlson has taken while illegally leading the agency, including the issuance of proposed Corporate Average Fuel Economy (CAFE) standards for model years 2027-2032, a de facto electric vehicle (EV) mandate, are invalid under the Vacancies Act.

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