City of Charleston v. Brabham Oil Co.

1

City of Charleston, Plaintiff, v. Brabham Oil Company, Inc.; Colonial Group, Inc.; Enmark Stations, Inc.; Colonial Pipeline Company; Piedmont Petroleum Corp.; Exxon Mobil Corporation; Exxonmobil Oil Corporation; Royal Dutch Shell PLC; Shell Oil Company; Shell Oil Products Company LLC; Chevron Corporation; Chevron U.S.A. Inc.; BP P.L.C.; BP America Inc.; Marathon Petroleum Corporation; Marathon Petroleum Company LP; Speedway LLC; Murphy Oil Corporation; Murphy Oil USA, Inc.; Hess Corporation; ConocoPhillips; ConocoPhillips Company, Phillips 66; and Phillips 66 Company, Defendants.

No. 2:20-cv-03579-RMG

United States District Court, D. South Carolina, Charleston Division

July 24, 2023

ORDER AND OPINION

RICHARD MARK GERGEL, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Plaintiff's Motion to Remand. (Dkt. No. 139). Defendants have responded in opposition to Plaintiff's motion (Dkt. No. 141), and Plaintiff has replied (Dkt. No. 142). The parties have also submitted supplemental briefing. (Dkt. Nos. 143-1, 149, 150 151, 152, and 153). For the reasons set forth below, the Court grants Plaintiff's Motion to Remand and remands this case to the Court of Common Pleas for Charleston County South Carolina.

I. Background

This case brought by the City of Charleston is one of over twenty cases across the country brought by different state and local governments asserting climate-change related claims against fossil fuel companies. Most of the cases were initiated in state courts and removed to the federal courts. Judicial discourse in those cases has centered not around whether the companies can be held liable, but rather, whether federal or state courts should decide. This is the question presently before this Court.

The City of Baltimore, Maryland was one of the first plaintiffs to bring these claims against fossil fuel companies in this Circuit. After a journey to the Supreme Court on an appellate jurisdiction issue and a second Fourth Circuit opinion affirming the district court's remand order, the Baltimore case has been remanded to Maryland state court. Mayor and City Council of Baltimore v. BP P.L.C., 31 F.4th 178, 238 (4th Cir 2022), cert. denied, __ S.Ct. __, 2023 WL 2046224 (April 24, 2023). A review of the Baltimore case is instructive.

A. Mayor and City Council of Baltimore v. BP P.L.C.

In 2018, the Mayor and City of Baltimore filed a complaint in the Circuit Court for Baltimore city against “major corporate members of the fossil fuel industry” alleging eight causes of action, public nuisance, private nuisance, strict liability failure to warn, strict liability for design defect, negligent design defect, negligent failure to warn, trespass, and violations of the Maryland Consumer Protection Act. Mayor & City Council of Baltimore v. BP P.L.C., 388 F.Supp.3d 538, 548 (D. Md. Aug. 16, 2018) (“Baltimore I”). The corporate defendants immediately removed the case to federal court, presenting eight grounds for federal removal: (1) federal common law, (2) federal question jurisdiction under Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005), (3) Clean Air Act preemption, (4) Outer Continental Shelf Lands Act, (5) federal officer removal statute, (6) “federal enclaves,” (7) bankruptcy law, and (8) original admiralty jurisdiction. The district court rejected the defendants' proposed grounds for federal jurisdiction and granted Baltimore's motion to remand to state court. Id. at 574.

The defendants appealed the district court's remand order to the Fourth Circuit. The Fourth Circuit found that it only had statutory authority to review one of the eight jurisdictional arguments, the federal officer argument under 28 U.S.C. § 1442, because Congress generally prohibits appellate review of a remand order. Mayor & City Council of Baltimore v. BP P.L.C., 952 F.3d 452, 459 (4th Cir. 2020) (“Baltimore II”). The Fourth Circuit rejected Defendants' federal officer removal argument and affirmed the district court's decision to remand the case to state court. Id. at 471.

Defendants sought certiorari on whether the appellate court had jurisdiction to consider all eight of Defendants' arguments for federal jurisdiction. BP P.L.C. v. Mayor & City Council of Baltimore, U.S., 141 S.Ct. 1532 (2021) (“Baltimore III”). The Supreme Court granted certiorari and held that the Fourth Circuit is not divested of appellate jurisdiction over the defendants' other theories of removal and that the court may consider all bases for removal included within the district court's remand order. Id. at 1543. The Supreme Court did not address the Fourth Circuit's rejection of the defendants' federal officer removal argument and remanded the case to the Fourth Circuit to evaluate the remaining theories of removal the defendants proffered. Id.

On remand, the Fourth Circuit rejected the defendants' remaining seven arguments, concluding once again that there was no federal jurisdiction and that Baltimore's case belonged in state court. Mayor & City Council of Baltimore v. BP P.L.C., 31 F.4th 178, 238 (4th Cir. 2022) (“Baltimore IV”). The Supreme Court denied the defendants' petition for writ of certiorari as to Baltimore IV. BP P.L.C. v. Mayor & City Council of Baltimore, __ S.Ct. __, 2023 WL 3046224, at *1 (April 24, 2023).

B. The Instant Case

The City of Charleston filed suit in the Court of Common Pleas for Charleston County against more than twenty multinational oil and gas companies. (Dkt. No. 1-2 at 1). The City alleges that Defendants have substantially contributed to greenhouse gas pollution, global warming, and climate change by extracting, producing, promoting, refining, distributing, and selling fossil fuel products, while simultaneously deceiving consumers and the public about dangers associated with those products. (Id., ¶¶ 1-12). As a result of such conduct, the City claims that it has suffered and will continue to suffer severe injuries related to “climate crisis-caused environmental changes.” (Id., ¶ 11). According to the City, Defendants' conduct has adversely changed the environment in and around Charleston by causing a rise in sea level and an increase in storms, floods, heatwaves, drought, hurricanes, and other extreme weather events. (Id., ¶ 10).

The Complaint asserts six causes of action, all based on South Carolina law: Public Nuisance (Count 1); Private Nuisance (Count 2); Strict Liability Failure to Warn (Count 3); Negligent Failure to Warn (Count 4); Trespass (Count 5); and violations of South Carolina Unfair Trade Practices (Count 6). (Id., ¶¶ 153-218). The City seeks monetary damages, civil penalties, and equitable relief. (Id. at 141).

Defendants Chevron Corp. and Chevron U.S.A. Inc. timely filed a notice of removal in this Court, which asserted eight grounds for removal. (Dkt. No. 1). Defendants argued that the case is removable under the following eight theories: (1) the case is removable based on federal question jurisdiction because the City's claims are governed by federal common law, not state common law; (2) the case is removable under the Outer Continental Shelf Lands Act; (3) the case is removable under the Federal Officer Removal statue, 28 U.S.C. § 1442; (4) the case is removable under Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005) because the case necessarily raises disputed and substantial federal issues; (5) the case is removable because the City's claims are completely preempted by the Clean Air Act; (6) the case is removable because it arises out of federal enclaves; (7) the case is removable under the class action fairness act; and (8) the case is removable because the only South Carolina defendants are fraudulently joined. (Dkt. No. 1 at 3).

Despite largely re-arguing contentions from Baltimore, three aspects of Defendants' Notice of Removal present new evidence and arguments in support of removal to federal court. Specifically, Defendants “present a materially expanded evidentiary record” in support of federal officer jurisdiction, a new argument for Grable jurisdiction, and an argument based on the doctrine of fraudulent joinder. (Dkt. No. 141 at 1).

This opinion only addresses these three new arguments because the Fourth Circuit's opinion in Baltimore IV governs and forecloses all other arguments presented by Defendants.^[1]Because Defendants' new arguments similarly fail to provide grounds for federal jurisdiction, this Court grants the Plaintiff's motion to remand.

II. Standard

District courts of the United States are “courts of limited jurisdiction” and “possess only that power authorized by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) (internal citation omitted). District courts “may not exercise jurisdiction absent a statutory basis,” id., and in turn, Congress may not confer jurisdiction absent a constitutional basis. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) (“The power reserved to the states under the Constitution to provide for the determination of controversies in their courts, may be restricted only by the action of Congress in conformity to the Judiciary Articles of the Constitution.”). Thus, “removal jurisdiction raises significant federalism concerns.” Mulcahey v. Columbia Organic Chemicals Co., 29 F.3d 148, 151 (4th Cir. 1994) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)). For this reason, courts “must strictly construe” removal statutes and resolve all doubts in favor of remanding the case to state court. Mulcahey, 29 F.3d at 151. The “burden of establishing federal jurisdiction is placed upon the party...