City & Cnty. of Honolulu v. Sunoco LP

39 F.4th 1101

CITY & COUNTY OF HONOLULU, Plaintiff-Appellee,

v.SUNOCO LP; Aloha Petroleum, Ltd.; E xxon Mobil Corporation; ExxonMobil Oil Corporation; Shell PLC ; Shell USA, Inc.; Shell Oil Products Company LLC; Chevron Corporation; Chevron USA Inc.; BHP Group Limited; BHP PLC; BHP Hawaii Inc.; BP PLC ; BP America, Inc. ; Marathon Petroleum Corp.; ConocoPhillips; ConocoPhillips Company; Phillips 66 Company; Aloha Petroleum LLC, Defendants-Appellants,andDoes, 1 through 100 inclusive, Defendant.

County of Maui, Plaintiff-Appellee,

v.Chevron USA Inc.; Chevron Corporation; Sunoco LP; Aloha Petroleum, Ltd.; Aloha Petroleum LLC ; E xxon Mobil Corporation; ExxonMobil Oil Corporation; Shell PLC ; Shell USA, Inc.; Shell Oil Products Company LLC; BHP Group Limited; BHP Group PLC ; BHP Hawaii Inc.; BP PLC ; BP America, Inc. ; Marathon Petroleum Corp.; ConocoPhillips; ConocoPhillips Company; Phillips 66 Company, Defendants-Appellants,andDoes, 1 through 100 inclusive, Defendant.

No. 21-15313

No. 21-15318

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 17, 2022

Submission Vacated February 22, 2022

Resubmitted June 29, 2022 Honolulu, Hawaii

Filed July 7, 2022

Theodore J. Boutrous Jr. (argued) and William E. Thomson, Gibson Dunn & Crutcher LLP, Los Angeles, California; Thomas G. Hungar, Gibson Dunn & Crutcher LLP, Washington, D.C.; for Defendants-Appellants.

Victor M. Sher (argued), and Matthew K. Edling, Sher Edling LLP, San Francisco, California; Monana M. Lutey, Corporation Counsel; Richelle M. Thomson and Keola R. Whittaker, Deputies Corporation Counsel; Office of the Corporation Counsel, Wailuku, Hawai‘i; Dana M.O. Viola, Corporation Counsel; Robert M. Kohn, Nicolette Winter, and Jeff A. Lau, Deputies Corporation Counsel; Office of the Corporation Counsel, Honolulu, Hawai‘i; for Plaintiff-Appellee.

William M. Jay and Andrew Kim, Goodwin & Procter LLP, Washington, D.C.; Andrew R. Varcoe and Stephanie A. Maloney, U.S. Chamber Litigation Center, Washington, D.C.; for Amicus Curiae Chamber of Commerce of the United States of America.

Tristan L. Duncan, Shook Hardy & Bacon LLP, Kansas City, Missouri; Tammy Webb, Shook Hardy & Bacon LLP, San Francisco, California; for Amici Curiae General (Retired) Richard B. Myers and Admiral (retired) Michael G. Mullen.

Robert S. Peck, Center for Constitutional Litigation PC, Washington, D.C., for Amici Curiae National League of Cities, U.S. Conference of Mayors, and International Municipal Lawyers Association.

Daniel P. Mensher and Alison S. Gaffney, Keller Rohrback LLP, Seattle, Washington, for Amici Curiae Robert Brulle, Center for Climate Integrity, Justin Farrell, Benjamin Franta, Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran, and Union of Concerned Scientists.

William A. Rossbach, Rossbach Law PC, Missoula, Montana, for Amicus Curiae Charles Fletcher.

Michael R. Cruise, Leavitt Yamane & Soldner, Honolulu, Hawai‘i; Chase H. Livingston, Honolulu, Hawai‘i; for Amici Curiae Legal Scholars.

Miranda C. Steed, Jon S. Jacobs LLLC, Honolulu, Hawai‘i, for Amicus Curiae Hawai‘i State Association of Counties.

Clare E. Connors, Attorney General; Kimberly T. Guidry, Solicitor General; Ewan C. Rayner and Kaliko‘onalani D. Fernandes, Deputy Solicitors General; Department of the Attorney General, Honolulu, Hawai‘i; Rob Bonta, Attorney General, Sacramento, California; William Tong, Attorney General, Hartford, Connecticut; Kathleen Jennings, Attorney General, Wilmington, Delaware; Brian E. Frosh, Attorney General, Baltimore, Maryland; Keith Ellison, Attorney General, Saint Paul, Minnesota; Andrew J. Bruck, Acting Attorney General, Trenton, New Jersey; Hector Balderas, Attorney General, Santa Fe, New Mexico; Letitia James, Attorney General, Albany, New York; Ellen F. Rosenblum, Attorney General, Salem, Oregon; Peter F. Neronha, Attorney General, Providence, Rhode Island; Robert W. Ferguson, Attorney General, Olympia, Washington; Maura Healey, Attorney General, Boston, Massachusetts; Karl A. Racine, Attorney General, Washington, D.C.; for Amici Curiae States of Hawai‘i, California, Connecticut, Delaware, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Washington, the Commonwealth of Massachusetts, and District of Columbia.

Before: Michael Daly Hawkins, Ryan D. Nelson, and Danielle J. Forrest, Circuit Judges.

R. NELSON, Circuit Judge:

The City and County of Honolulu and the County of Maui (Plaintiffs) seek to bring climate-related claims against numerous oil and gas companies (Defendants). The question before us has nothing to do with the merits of those claims, but only whether they belong in federal court.

We do not write on a blank slate. Various oil company defendants have sought removal several times in similar climate change suits, including in this Court. See, e.g., County of San Mateo v. Chevron Corp. (San Mateo II ), 32 F.4th 733 (9th Cir. 2022) ; Rhode Island v. Shell Oil Prods. Co. , 35 F.4th 44 (1st Cir. 2022) ; Mayor of Baltimore v. BP P.L.C. (Baltimore II ), 31 F.4th 178 (4th Cir. 2022) ; Bd. of Cnty. Comm'rs of Boulder Cnty. v. Suncor Energy (U.S.A.) Inc. , 25 F.4th 1238 (10th Cir. 2022). Similar to here, defendants in those cases contended that removal was proper under jurisdiction for federal officers, federal enclaves, and the Outer Continental Shelf Lands Act (OCSLA). Following precedent and consistent with our sister circuits, we reject these arguments. Because Defendants cannot show federal jurisdiction, we affirm.

I

Plaintiffs allege that oil and gas companies knew about climate change, understood the harms energy exploration and extraction inflicted on the environment, and concealed those harms from the public. Plaintiffs sued in Hawaii state court, asserting state-law public and private nuisance, failure to warn, and trespass claims. The Complaints assert that Defendants' deception caused harms from climate change, like property damage from extreme weather and land encroachment because of rising sea levels.

Defendants removed, asserting eight jurisdictional grounds. Plaintiffs sought to remand. After addressing the three removal grounds at issue before us, the district court remanded. Defendants now appeal and we have consolidated the two appeals.

II

We have jurisdiction to review the district court's remand order under 28 U.S.C. §§ 1291, 1447(d). BP P.L.C. v. Mayor of Baltimore , ––– U.S. ––––, 141 S. Ct. 1532, 1538, 209 L.Ed.2d 631 (2021). We review the district court's decision de novo. Canela v. Costco Wholesale Corp. , 971 F.3d 845, 849 (9th Cir. 2020).

III

Defendants' arguments lack merit. For federal officer jurisdiction, Defendants must show: (1) they were "acting under" federal officers, (2) they can assert a colorable federal defense, and (3) Plaintiffs' injuries were for or relating to Defendants' actions. Most arguments fail the first prong, and all fail the second. For federal enclave jurisdiction, Defendants cannot show that activities on federal enclaves directly caused Plaintiffs' injuries. And for jurisdiction under OCSLA, Defendants' activities on the Outer Continental Shelf (OCS) are too attenuated from Plaintiffs' injuries. We address each argument in turn.

A

The federal officer removal statute allows defendants to remove a "civil action ... that is against or directed to ... [t]he United States or any agency thereof or any officer (or any person acting under that officer) ... in an official or individual capacity, for or relating to any act under color of such office." 28 U.S.C. § 1442(a)(1). Exercising "prudence and restraint," "we strictly construe the removal statute against removal jurisdiction."

Hansen v. Grp. Health Coop. , 902 F.3d 1051, 1056–57 (9th Cir. 2018) (citation omitted). To establish federal jurisdiction, a defendant must show that (a) "it is a person within the meaning of the statute"; (b) "it can assert a colorable federal defense"; and (c) "there is a causal nexus between its actions, taken pursuant to a federal officer's directions, and [the] plaintiff's claims." San Mateo II , 32 F.4th at 755 (citing Riggs v. Airbus Helicopters, Inc. , 939 F.3d 981, 986–87 (9th Cir. 2019) ). Because the parties agree that corporations are persons, the disputes are (1) whether Defendants acted under federal officers, (2) whether Defendants can assert colorable federal defenses, and (3) whether the lawsuits are for or relating to Defendants' actions. We need only address prongs one and two.

The first prong is "acting under" federal officers. 28 U.S.C. § 1442(a)(1). "The words ‘acting under’ are broad, and ... the statute must be ‘liberally construed.’ " Watson v. Philip Morris Cos. , 551 U.S. 142, 147, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007) (quoting Colorado v. Symes , 286 U.S. 510, 517, 52 S.Ct. 635, 76 L.Ed. 1253 (1932) ). In San Mateo II , we identified four factors to determine whether a person was "acting under" a federal officer: (1) working under an officer "in a manner akin to an agency relationship"; (2) being "subject to the officer's close direction, such as acting under the ... ‘guidance, or control’ of the officer" or having an "unusually close" relationship "involving detailed regulation, monitoring, or supervision"; (3) helping fulfill "basic governmental tasks"; and (4) conducting activities "so closely related to the government's implementation of its federal duties that the ... person faces ‘a significant risk of state-court prejudice.’ " 32 F.4th at 756–57 (citing Watson , 551 U.S. at 151–53, 127 S.Ct. 2301 ).

We gave several examples in San Mateo II. We noted that a private party acts under the government when the party is a contractor given detailed specifications and ongoing supervision to help fight a war. San Mateo II , 32 F.4th at 757 (citing Watson , 551 U.S. at 153–54, 127 S.Ct. 2301 (citing Winters v. Diamond Shamrock Chem. Co. , 149 F.3d 387, 399–400 (5th Cir. 1998), overruled on other grounds by Latiolais v. Huntington Ingalls, Inc. , 951 F.3d 286 (5th Cir. 2020) )). On the other hand,...