State v. Exxon Mobil Corp.

83 F.4th 122

STATE of Connecticut, BY its Attorney General, William M. TONG, Plaintiff-Appellee, v. EXXON MOBIL CORPORATION, Defendant-Appellant.

No. 21-1446-cv

August Term 2022

United States Court of Appeals, Second Circuit

Argued: September 23, 2022

Decided: September 27, 2023

Appeal from the United States District Court for the District of Connecticut, No. 20-cv-1555, Janet C. Hall, Judge.

Benjamin W. Cheney, Assistant Attorney General (Matthew I. Levine, Deputy Associate Attorney General; Daniel M. Salton, Jonathan E. Harding, Assistant Attorneys General, on the brief), for William M. Tong, Attorney General of Connecticut, Hartford, CT, for Plaintiff-Appellee State of Connecticut.

Kannon K. Shanmugam, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC (Justin Anderson, Kyle Smith, William T. Marks, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC; Theodore V. Wells, Jr., Daniel J. Toal, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY; Kevin M. Smith, Tadhg Dooley, Wiggin & Dana LLP, New Haven, CT; Robert M. Langer, Wiggin & Dana, LLP, Hartford, CT; Patrick J. Conlon, Exxon Mobil Corporation, Spring, TX, on the brief), for Defendant-Appellant Exxon Mobil Corporation.

Before: Sullivan, Nardini, and Pérez, Circuit Judges.

Richard J. Sullivan, Circuit Judge:

In 2020, the State of Connecticut sued Exxon Mobil Corporation ("Exxon Mobil") in Connecticut state court, alleging that Exxon Mobil had engaged in a decades-long "campaign of deception" to knowingly mislead and deceive Connecticut consumers about the negative climatological effects of the fossil fuels that Exxon Mobil was marketing to those consumers. J. App'x at 8. Based on these allegations, Connecticut asserted eight claims against Exxon Mobil, all under the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen. Stat. § 42-110b(a). Exxon Mobil removed the case to federal district court, invoking subject-matter jurisdiction under the federal-question statute, 28 U.S.C. § 1331, the federal-officer removal statute, id. § 1442(a)(1), and the Outer Continental Shelf Lands Act (the "OCSLA"), 43 U.S.C. § 1349(b)(1)(A), as well as on other bases no longer pressed in this appeal. The district court (Hall, J.) rejected each of Exxon Mobil's theories of federal subject-matter jurisdiction, and thus remanded the case to state court.

On appeal, we are tasked with deciding (1) whether the "well-pleaded complaint rule," Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987), is subject to any exceptions other than the three we enumerated in Fracasse v. People's United Bank, 747 F.3d 141, 144 (2d Cir. 2014); (2) whether Connecticut's CUTPA claims raise the "federal common law of transboundary pollution," Exxon Mobil Br. at 30-31; cf. City of New York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021), as a necessary element for establishing Exxon Mobil's liability; (3) whether Exxon Mobil was "acting under" an "officer ... of the United States" and "under color of such office," 28 U.S.C. § 1442(a)(1), for purposes of the allegedly deceptive acts forming the basis of Connecticut's CUTPA claims; and (4) whether such acts "aris[e] out of, or in connection with," Exxon Mobil's "operation[s]" on the outer continental shelf (the "OCS"), where Exxon Mobil extracts oil and gas on land leased from the federal government, 43 U.S.C. § 1349(b)(1)(A). For the reasons explained below, we answer each of these questions in the negative. As a result, we AFFIRM the district court's order remanding this case to the Connecticut Superior Court for the District of Hartford.

I. Background

A. Facts

Exxon Mobil is a multinational energy and chemicals company and was ranked the eleventh-largest public company in the world in 2019. Exxon Mobil's "principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufactur[ing] of petroleum products[,] and transportation and sale of crude oil, natural gas and petroleum products." J. App'x at 17 (internal quotation marks omitted). The State of Connecticut alleges that Exxon Mobil has engaged "[f]or several decades" in a "campaign of deception" that "has misled and deceived Connecticut consumers about the negative effects of its business practices on the climate." Id. at 8. More specifically, Connecticut alleges as follows:

Since the 1950s, Exxon Mobil's corporate leadership has been aware of research indicating that the combustion of fossil fuels — such as those produced and marketed by Exxon Mobil — causes dangerous changes to the Earth's climate. Indeed, much of that research has been internal research, commissioned by Exxon Mobil and conducted by its own in-house scientists. Throughout the 1970s and 1980s, as the issues of "climate change and its potentially catastrophic consequences" grew increasingly prevalent in American public discourse, id., Exxon Mobil's leadership grew increasingly concerned that the company would face catastrophic economic consequences if consumer markets for oil and gas were to be softened by widespread public acceptance of what Exxon Mobil's own internal research had long suggested: that fossil fuels play a significant role in causing climate change.

In an effort to protect its profitability and revenues, Exxon Mobil began publishing and commissioning "advertisements, interviews, ... research papers," and other public "statements casting doubt on th[e] connection" between fossil fuels and global warming in various media outlets consumed by "tens of thousands of Connecticut residents, nearly every week." Id. at 26-41, 218. Even after "finally admitting publicly that combustion of fossil fuels contributes to climate change," Exxon Mobil continued to publish advertising "falsely portraying [itself] as a corporation committed to seriously combatting climate change." Id. at 9.

The effect of this "campaign of deception" has been that "many consumers still do not believe the scientific facts" of climate change and its causal connection to fossil fuels. J. App'x at 10. Closer to home, it has resulted in "Connecticut consumers" purchasing "more oil and gasoline than [they] would have purchased had the reality of climate change been disclosed." Id. at 9, 43. As a corollary, it has also "resulted in the stifling of an open marketplace for renewable energy, thereby leaving consumers unable to reasonably avoid the detrimental consequences of fossil[-]fuel combustion." Id. at 46.

B. Procedural History

On the basis of this alleged "campaign of deception," the State of Connecticut, by and through its Attorney General, commenced this suit against Exxon Mobil on September 14, 2020 in the Connecticut Superior Court for the District of Hartford. Connecticut's complaint asserted eight claims — all under CUTPA, which provides that "[n]o person shall engage in ... unfair or deceptive acts or practices in the conduct of any trade or commerce." Conn. Gen. Stat. § 42-110b(a). The Connecticut Supreme Court has read two distinct causes of action into CUTPA — one for "decepti[on]," Caldor, Inc. v. Heslin, 215 Conn. 590, 597, 577 A.2d 1009 (1990) (explaining that a deception claim requires a "material" "representation, omission, or practice" that is "misleading" when interpreted "reasonably under the circumstances"), and the other for "unfairness," Ulbrich v. Groth, 310 Conn. 375, 409, 78 A.3d 76 (2013) (noting that the sole element of an unfairness claim is "a [trade] practice [that] is unfair"). Here, Connecticut brought four claims for deception and four for unfairness. Based on these claims, Connecticut sought numerous forms of relief, including, among others: (1) an injunction enjoining Exxon Mobil from continuing to engage in deceptive practices under CUTPA; (2) civil penalties of $5,000 per willful violation of CUTPA; (3) disgorgement of revenues attributable to unfair practices under CUTPA; and (4) "[e]quitable relief" for "deceptive acts and practices that will require future climate[-]change mitigation," including in the form of "restitution" for "all expenditures attributable to Exxon[]Mobil that [Connecticut] has made and will have to make to combat the effects of climate change." J. App'x at 51 ¶¶ 3, 5 (citing Conn. Gen. Stat. § 42-110m).

Exxon Mobil timely removed Connecticut's action to federal district court. In its notice of removal, Exxon Mobil invoked federal subject-matter jurisdiction under the federal-question statute, the federal-officer removal statute, and the OCSLA, as well as other statutory provisions no longer relevant on appeal. Following removal, Connecticut moved to remand the case to state court. After a full round of briefing and oral argument, the district court issued a lengthy opinion rejecting all of Exxon Mobil's asserted grounds for federal jurisdiction and granting Connecticut's motion to remand the case to the Connecticut Superior Court for the District of Hartford.

Exxon Mobil timely appealed.

II. Appellate Jurisdiction

As a general matter, "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d). However, such an order is "reviewable by appeal" where, as here, the case "was removed pursuant to [28 U.S.C. §] 1442," i.e., the federal-officer removal statute. Id.

Until recently, there was "persistent circuit conflict" as to the scope of appellate review authorized by this statutory exception in cases, like this one, where "the removing defendant [had] premised removal [only] in part on the federal-officer removal statute." Petition for a Writ of Certiorari at 11, BP P.L.C. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532 (2021) (No. 19-1189), 2020 WL 1557798, at *11 (emphasis added). Eight circuits — including our own — had taken the view that appellate review under section 1447(d)'s exception for federal-officer removal cases "is ... confined to a defendant's removal arguments under the federal[-]officer ... removal ...