On April 24, 2023, the Supreme Court denied the petition of several oil and gas company defendants seeking to remove a climate change lawsuit from state court to federal court.
The case, BP P.L.C. v. Mayor and City Council of Baltimore, is one of more than a dozen lawsuits filed since July 2017 by local and state governments against oil and gas companies.
These states filed lawsuits allege that the oil and gas companies’ exploration, production, and marketing of fossil fuels contributed to the plaintiffs’ climate-change-related injuries. In BP P.L.C., the city of Baltimore alleged that the companies’ “production, promotion, marketing of fossil fuel products, simultaneous concealment of the known hazards of those products, and their championing of anti-science campaigns, actually and proximately caused [its] injuries.”
Until now, the battle has primarily centered on establishing the proper forum, federal court or state court.
The city filed suit in the Circuit Court for Baltimore City against several oil and gas defendants. It alleged, among other things, that the defendants “substantially contributed to greenhouse-gas pollution, global warming, and climate change by extracting, producing, promoting, refining, marketing, distributing, and selling fossil-fuel products (i.e., coal, oil, and natural gas).”
After Baltimore’s suit was filed in state court, certain industry defendants removed Baltimore’s complaint to the United States District Court for the District of Maryland, asserting eight grounds for removal, including: (1) federal common law; (2) substantial issues of federal law; (3) complete preemption under the Clean Air Act (CAA); (4) federal enclaves; (5) the Outer Continental Shelf Lands Act (OCSLA); (6) the bankruptcy removal statute; (7) the admiralty jurisdiction statute; and (8) the federal officer removal statute.
Baltimore, in turn, filed a motion to remand its complaint back to state court, which the District Court granted. Defendants appealed the District Court’s decision to the U.S. Fourth Circuit Court of Appeals.
The Fourth Circuit evaluated each of the defendants’ eight grounds for removal and concluded that none permitted the exercise of federal jurisdiction. The court reasoned that the defendants’ federal common law argument failed because Baltimore’s complaint never expressly asserted any claim under federal common law, and the defendants did not show that federal common law truly controls this dispute involving their fossil-fuel products.
Concerning the defendants’ argument that Baltimore’s complaint raises substantial issues of federal law, the court said a federal issue was not “necessarily raised” in Baltimore’s complaint, and the defendants failed to identify what federal question is a “necessary element” for any of Baltimore’s state-law claims.
Defendants’ third ground for removal was unsuccessful because the Court found nothing within the Clean Air Act requiring the complete preemption of state-law claims that seek to impose liability upon fossil-fuel products. The federal enclaves basis for removal was dismissed because the court found that only some of the defendants’ activities occurred on federal lands, which according to the court, was not enough to confer federal jurisdiction.
The court reasoned that federal-question jurisdiction tied to federal enclaves “generally requires ‘that all pertinent events t[ake] place on a federal enclave,’” and here, some of the defendants’ conduct occurred in the City of Baltimore.
Additionally, defendants’ OCSLA ground for removal was dismissed for lack of a but-for connection between Baltimore’s causes of action and the Outer Continental Shelf.
Next, the court reasoned that the defendants’ bankruptcy basis for removal failed because Baltimore’s suit lacked any “close nexus” or relation to any bankruptcy plan involving the defendants or their predecessors.
The court also declined to entertain the defendants’ attempt to invoke admiralty jurisdiction, reasoning that the defendants failed to establish their floating rigs and platforms qualified as vessels to satisfy the admiralty location test, nor were the rigs the alleged cause of plaintiff’s land-based tort claims.
Lastly, the defendants’ final basis for removal under the federal officer statute was dismissed. The Fourth Circuit reasoned none of the defendants’ alleged contractual relationships between them and the government were sufficient to justify removal under the federal officer removal statute, “either because they fail to satisfy the acting-under prong or because they are insufficiently related to Baltimore’s claims for purposes of the nexus prong.”
Having denied all of the defendants’ grounds for removal, the Fourth Circuit affirmed the decision of the District Court, remanding the matter to the Circuit Court for Baltimore City. It was from this decision the industry defendants sought U.S. Supreme Court review.
In response to the defendants’ petition for certiorari, the Supreme Court issued a two-sentence order providing no reasons for the denial of the defendants’ petition.
However brief, this ruling addressed the heavily litigated question of whether climate change suits brought by state and local governments should proceed in state court. The Supreme Court’s answer: yes
Nevertheless, just because the highest court rejected the defendants’ request to halt state court proceedings, it doesn’t mean the fight for the federal court is over.
There might just be another avenue defendants can take to federal court. In 2011, the Supreme Court issued an opinion in Am. Elec. Power Co. v. Connecticut, holding that the federal Clean Water Act displaced federal common law climate-based claims for public nuisance. Notably, the Court did not address whether federal law displaces such state common law nuisance claims.
Notably, it has become clear that Supreme Court is standing firm on its denial of a federal forum to litigate climate change lawsuits.
On May 15, 2023, a mere three-weeks after the Supreme Court denied the defendants’ petition for certiorari in Mayor & City Council of Baltimore v. BP P.L.C., the Justices issued another brief order denying a bid by oil and gas industry defendants seeking to overturn a Third Circuit’s ruling that climate change complaints brought by the states of Delaware and New Jersey must be litigated in state court (Chevron Corp., et al. v. Hoboken, NJ, et al).
Authors: Claire E. Juneau, Partner and Kelicia D. Raya, Associate (Kean Miller)
