Dist. of Columbia v. Exxon Mobil Corp.

640 F.Supp.3d 95

DISTRICT OF COLUMBIA, Plaintiff, v. EXXON MOBIL CORPORATION et al., Defendants.

Civil Action No. 20-1932 (TJK)

United States District Court, District of Columbia

Signed November 12, 2022

Katherine Hannah Jones, Pro Hac Vice, Matthew Kendall Edling, Quentin C. Karpilow, Victor Marc Sher, Pro Hac Vice, Sher Edling LLP, San Francisco, CA, Kathleen M. Konopka, Office of the Attorney General for D.C., Washington, DC, Anna C. Haac, Hassan A. Zavareei, Kristen Simplicio, Tycko & Zavareei, LLP, Washington, DC, Matthew T. Heartney, Pro Hac Vice, Arnold & Porter, Los Angeles, CA, for Plaintiff.

Daniel John Toal, Pro Hac Vice, Theodore V. Wells, Jr., Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, Justin A. Anderson, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC, Patrick J. Conlon, Exxon Mobil Corporation, Spring, TX, for Defendants Exxon Mobil Corp., Exxonmobil Oil Corporation.

Diana E. Reiter, Pro Hac Vice, Nancy G. Milburn, Pro Hac Vice, Arnold & Porter Kaye Scholer LLP, New York, NY, Ethan G. Shenkman, James W. Cooper, Arnold & Porter Kaye Scholer LLP, Washington, DC, John D. Lombardo, Pro Hac Vice, Matthew T. Heartney, Pro Hac Vice, Arnold & Porter Kaye Scholer LLP, Los Angeles, CA, Jonathan W. Hughes, Pro Hac Vice, Arnold & Porter Kaye Scholer LLP, San Francisco, CA, for Defendants BP P.L.C., BP America Inc.

Joshua Seth Lipshutz, Thomas G. Hungar, Gibson, Dunn & Crutcher, LLP, Washington, DC, Steven M. Shepard, Pro Hac Vice, Susman Godfrey LLP, New York, NY, Theodore J. Boutrous, Jr., Gibson, Dunn & Crutcher LLP, Los Angeles, CA, Ashley McMillian, Pro Hac Vice, Erica W. Harris, Pro Hac Vice, Johnny W. Carter, Pro Hac Vice, Mary Kathryn Sammons, Susman Godfrey LLP, Houston, TX, for Defendants Chevron Corporation, Chevron U.S.A. Inc.

David Charles Frederick, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Washington, DC, for Defendants Shell PLC, Shell USA, Inc.

MEMORANDUM OPINION

TIMOTHY J. KELLY, United States District Judge

The District of Columbia sued Defendants, a group of energy companies, for violating a District of Columbia consumer protection law. The District alleges, among other things, that Defendants knowingly misrepresented the effects of fossil fuel products to consumers within the District through misleading advertisements and biased scientific studies. Defendants removed the case to federal court, invoking seven bases for the Court's subject-matter jurisdiction. The District of Columbia moved to remand to Superior Court, and Defendants opposed. For the following reasons, the Court will grant the District's motion to remand.

I. Background

The District of Columbia ("the District") sued Exxon Mobil, BP, Chevron, Shell Oil, and relevant subsidiaries ("Defendants") in District of Columbia Superior Court for alleged violations of the D.C. Consumer Protection Procedures Act ("the Act"). ECF No. 1-14 at 6. According to the District, Defendants have known about the harmful effects of fossil fuels for decades yet have misrepresented those effects and "promoted disinformation" to District of Columbia consumers. Id. at 36. The complaint alleges, for example, that Defendants "funded and controlled" scientists to manipulate public perception on fossil fuels and embarked on "misleading" advertising campaigns in the Washington Post and elsewhere to deceive the public about the effects of fossil fuels on the environment. See, e.g., id. at 41-42. The District also alleges that Defendants' violations of the Act are ongoing, and that Defendants have now "turned their attention to misleading consumers about their level of investment in cleaner energy sources." Id. at 53. According to the complaint, Defendants have undertaken "greenwashing campaigns," in which they promote their investment in "alternative energy sources" but intentionally overstate their commitment to non-fossil fuels. See, e.g., id. at 58. According to the District, Defendants' actions have caused "existential" environmental injuries—such as rising temperatures and sea levels—which cause "damage [to] critical infrastructure and property," "heat waves," "flooding," and other "extreme weather." ECF No. 1-14 at 52-53.

The District claims that each Defendant and its subsidiary violated the Act by "engaging in a number of deceptive acts and practices in its marketing, promotion, and sale of fossil fuel products." ECF No. 1-14 at 77, 80, 82, 84-86. For relief, the District seeks an order enjoining Defendants from violating the Act. It also seeks civil penalties, restitution, and damages as provided by the Act. Id. at 86-87; see D.C. Code § 28-3909.

Exxon removed the case to this Court, ECF No. 1, and the other defendants consented, ECF No. 8, 12, 16. In the notice of removal, Defendants claimed that removal is proper because (1) the claims arise under federal common law; (2) the lawsuit raises disputed and substantial federal issues under Grable; (3) the action arises out of federal enclaves; (4) the Federal Officer Removal statute applies; (5) the Outer Continental Shelf Lands Act applies; (6) diversity jurisdiction exists; and (7) the Class Action Fairness Act applies. ECF No. 1 at 11-12. The District moved to remand, ECF No. 45, and Defendants opposed, ECF No. 51. Since then, the parties have peppered the docket with notices of supplemental authority. See, e.g., ECF Nos. 66, 68, 71, 74, 77, 78, 82, 84, 87, 89, 91, 93, 97, 103, 107, 108, 112, 114.

II. Legal Standard

Federal courts 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). Thus, "[a] civil action filed in state court may only be removed to a United States district court if the case could originally have been brought in federal court." Nat'l Consumers League v. Flowers Bakeries, LLC, 36 F. Supp. 3d 26, 30 (D.D.C. 2014) (citing 28 U.S.C. § 1441(a)). "When a plaintiff files a motion to remand, the removing defendant bears the burden of proving that removal was proper." Arenivar v. Manganaro Midatlantic, LLC, 317 F. Supp. 3d 362, 367 (D.D.C. 2018) (internal quotation marks omitted). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447. "Any doubts about the existence of subject matter jurisdiction are to be resolved in favor of remand." Witte v. Gen. Nutrition Corp., 104 F. Supp. 3d 1, 3 (D.D.C. 2015) (cleaned up).

III. Analysis

Defendants raise seven theories for the Court's subject-matter jurisdiction. Each, they say, is an independent ground for removal. None is.

A. Federal Common Law Does Not Confer Jurisdiction Over the District's Claims

Defendants argue that the suit must be heard in federal court because the District's claims implicate interstate pollution, the navigable waters of the United States, and foreign affairs, and therefore its consumer protection claims "necessarily" arise under federal common law. In other words, even though the District did not plead a federal claim, Defendants say that the Court has jurisdiction because claims "may arise under federal common law regardless of whether a plaintiff affixes a federal law label." ECF No. 51 at 29. In response, the District argues that federal common law does not apply to its state consumer protection claims, but even if it did, it cannot support removal because the federal question must appear on the face of their well-pleaded complaint, and complete preemption does not apply. ECF No. 63 at 18-19.

For Defendants to demonstrate federal-question jurisdiction on federal common law grounds, they must first show that federal common law applies to the District's false-advertising claims or that the Court should fashion a new federal common law rule. Defendants come up well short on this first step.

The Court has original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. "There is, of course, 'no federal general common law.' " Texas Indus., Inc. v. Radcliff Materials, 451 U.S. 630, 640, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981) (quoting Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). But the Supreme Court has recognized "few and restricted" areas of federal common law to protect "uniquely federal interests." Id. Federal courts should tread lightly in this area, however, because "whether latent federal power should be exercised to displace state law is primarily a decision for Congress." Atherton v. FDIC, 519 U.S. 213, 218, 117 S.Ct. 666, 136 L.Ed.2d 656 (1997) (cleaned up). In the rare instance when a federal court creates such a rule, it must ensure two things. First, the state law or claim must affect "uniquely federal interests." Boyle v. United Techs. Corp., 487 U.S. 500, 504, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). Second, there must be "significant conflict" between the federal interests and state law.¹ Id. at 507, 108 S.Ct. 2510.

Defendants use almost all their opposition to argue that the District's claims "implicate" three uniquely federal interests: interstate pollution, the navigable waters of the United States, and foreign affairs. Fair enough.² But even so, their argument fails because they have not shown a "significant conflict" between the District's claims under the Act and a federal interest they identify. See O'Melveny & Myers v. FDIC, 512 U.S. 79, 88, 114 S.Ct. 2048, 129 L.Ed.2d 67 (1994) (failing to show "significant conflict" is "fatal" to federal common law argument). Simply put, they do not engage with this prong of the federal common law test. See, e.g., ECF No. 51 at 29 (arguing only that the District's claims "implicate" federal interests). They do not, for example, sufficiently describe actual conflict between the Act's protections against misleading advertising and federal interests in regulating "transboundary...