The past three years have seen a wave of tort lawsuits brought by local governments and one state seeking to hold fossil fuel companies liable for costs resulting from climate change.[i] Whether the cases can be removed to federal court is a central issue. In all but one case,[ii] plaintiffs initially filed suit in state court, asserting claims for public nuisance and other state-law causes of action. Defendants have removed the cases to federal court, and plaintiffs have fought to have the cases remanded to state court.
In a pair of opinions issued May 26, 2020, the Ninth Circuit held that the fossil fuel company defendants in two of these lawsuits, City of Oakland v. BP p.l.c. (“Oakland”) and County of San Mateo v. Chevron Corp. (“San Mateo”), had failed to satisfy the requirements for removal. The same three-judge panel, in opinions authored by Judge Ikuta, determined that the Oakland plaintiffs’ state-law claim does not arise under federal law for purposes of federal question jurisdiction and that the claim is not completely preempted by the Clean Air Act. In San Mateo, where the district court had granted plaintiffs’ remand motion, the panel held that its review was limited to the district court’s finding of no subject-matter jurisdiction under the federal officer removal statute, and it concluded that the San Mateo defendants had not established the criteria for federal officer removal. These opinions potentially open the door to more state court lawsuits seeking money damages from companies that have allegedly contributed to climate change.
In determining that plaintiffs’ claims do not raise federal questions, the Ninth Circuit joins the Fourth Circuit, the only other appellate court to have addressed the issue.[iii] Appeals in similar cases are pending before the First, Second, and Tenth Circuits.
City of Oakland v. B.P. P.L.C.
The Ninth Circuit concluded that the district court lacked federal-question jurisdiction and thus erred in refusing to grant plaintiffs’ request for remand. The three-judge panel began its analysis citing to the “well-pleaded complaint rule,” which holds that federal question jurisdiction exists only “when a federal question appears on the face of the complaint.”[iv] The court noted that there are a few exceptions to this rule, including state-law claims that arise under federal law because “federal law is a necessary element of the … claim for relief” and state-law claims that are completely preempted by federal law.[v]
The Ninth Circuit held that plaintiffs’ nuisance claim did not arise under federal law because it purportedly “does not require resolution of a substantial question of federal law.”[vi] In a crucial passage, the court compared the federal interests implicated by plaintiffs’ claims—namely energy policy, national security, and foreign policy—to the federal government’s interest in attracting able workers:
Rather than identify a legal issue, the Energy Companies suggest that the Cities’ state-law claim implicates a variety of “federal interests,” including energy policy, national security, and foreign policy. The question whether the Energy Companies can be held liable for public nuisance based on production and promotion of the use of fossil fuels and be required to spend billions of dollars on abatement is no doubt an important policy question, but it does not raise a substantial question of federal law for the purpose of determining whether there is jurisdiction under § 1331. Cf. Empire Healthchoice, 547 U.S. at 701, 126 S. Ct. 2121 (holding that the federal government’s “overwhelming interest in attracting able workers to the federal workforce” and “in the health and welfare of the federal workers upon whom it relies to carry out its functions” was insufficient to transform a “state-court-initiated tort litigation” into a “federal case”).[vii]
Turning to defendants’ argument that plaintiffs’ claim was completely preempted by federal law, the court determined that the Clean Air Act does not meet the requirements for complete preemption. First, the court pointed to the statute’s saving clause as evidence that Congress did not intend to preempt every state law cause of action within the scope of the Clean Air Act. Second, the court observed that the Clean Air Act “does not provide a federal claim or cause of action for nuisance caused by global warming” and therefore does not provide the plaintiffs with a “substitute” cause of action “that would allow the Cities to remedy the wrong they assert they suffered.”[viii]
The panel remanded the case to the district court, instructing it to determine whether it had any alternative basis for jurisdiction, and, if not, to remand the case to state court.[ix]
County of San Mateo v. Chevron Corp.
In its opinion affirming the district court’s remand order, the Ninth Circuit panel first determined that it only had jurisdiction to review the district court’s remand order “to the extent it addresses whether removal was proper” under the federal officer...
