In The City of New York v. Exxon Mobil Corp., No. 24-1568 (2d Cir. Oct. 3, 2025), a 2-1 panel holds that Exxon could be sanctioned under 28 U.S.C. § 1447(c) for pressing the same grounds for removal that eight U.S. Courts of Appeals had rejected after the original removal. The dissent would hold that the proper time frame for measuring the defendant’s good faith is the time of removal (2021) rather than two years later when the motion was finally argued and decided (2023).
Section 1447(c) provides that “[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” In Martin v. Franklin Capital Corp., 546 U.S. 132 (2005), the Supreme Court interpreted this provision to provide that “[a]bsent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal.”
“Starting in approximately 2017, numerous state and local entities sued Exxon (and, in some instances, other oil companies as well) in different state courts under state and local deceptive advertising, nuisance, and other consumer protection laws [relating to climate change]. In response, Exxon repeatedly removed the cases to federal court. The state and local entities moved to remand, and Exxon opposed, consistently raising the same or similar grounds for removal as proffered in this case. In virtually all of those cases, Exxon failed in its efforts to oppose remand, as its jurisdictional arguments were roundly rejected, both before it renewed its opposition to remand in this case (November 11, 2023) and thereafter, as courts continued to reject its jurisdictional arguments in later cases.”
In the present case, Exxon removed the original suit in 2021. In the intervening years between removal and remand, Exxon and other fossil-fuel companies lost in eight U.S. Courts of Appeals decisions on the same grounds relied upon here: federal common law, complete preemption, admiralty jurisdiction, federal enclave jurisdiction, bankruptcy jurisdiction, OCSLA, First Amendment, and the federal officer removal statute. One of the cases that rejected these arguments was the Second Circuit itself, in Connecticut v. Exxon Mobil Corp., 83 F.4th 122 (2d Cir. 2023) (“Connecticut”).
When the district court finally granted remand in this case in 2023, it held that in the face of virtually unbroken, intervening authority that denied...
