Petition for Writ of Certiorari — Chevron Corporation, et al., Petitioners v. City of Hoboken, New Jersey, et al.
Supreme Court briefFeb 27, 2023
Ask Donna
What actually matters in this document.
Text
APPENDIX
TABLE OF CONTENTS
Page
APPENDIX A: Opinion of the United States
Court of Appeals for the Third Circuit
(Aug. 17, 2022) .................................................... 1a
APPENDIX B: Opinion of the United States
District Court for the District of New
Jersey Granting Motions to Remand
(Sept. 8, 2021) ................................................... 37a
APPENDIX C: Opinion of the United States
District Court for the District of Delaware
Granting Motions to Remand
(Jan. 5, 2022) ..................................................... 67a
APPENDIX D: Order of the United States
Court of Appeals for the Third Circuit
Denying Rehearing En Banc
(Sept. 30, 2022) ............................................... 109a
1a
APPENDIX A
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________________________________
No. 21-2728
_________________________________________
CITY OF HOBOKEN
v.
CHEVRON CORPORATION;
CHEVRON U.S.A. INC.;
EXXON MOBIL CORPORATION;
EXXONMOBIL OIL CORPORATION; SHELL PLC;
BP P.L.C.; BP AMERICA, INC.; CONOCOPHILLIPS; CONOCOPHILLIPS CO.; PHILLIPS 66;
PHILLIPS 66 COMPANY; AMERICAN PETROLEUM INSTITUTE;
SHELL USA,
Appellants.
_________________________________________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2:20-cv-14243)
District Judge: Honorable John M. Vazquez
_________________________________________
2a
_________________________________________
No. 22-1096
_________________________________________
STATE OF DELAWARE, ex rel. Kathleen Jennings,
Attorney General of the State of Delaware
v.
BP AMERICA INC.; BP P.L.C.;
CHEVRON CORPORATION; CHEVRON U.S.A.
INC.; CONOCOPHILLIPS; CONOCOPHILLIPS
COMPANY; PHILLIPS 66; PHILLIPS 66 COMPANY; EXXON MOBIL CORPORATION; EXXONMOBIL OIL CORPORATION; XTO ENERGY
INC.; HESS CORPORATION; MARATHON OIL
CORPORATION; MARATHON PETROLEUM CORPORATION; MARATHON PETROLEUM COMPANY LP; SPEEDWAY LLC; MURPHY OIL CORPORATION; MURPHY USA INC.; SHELL PLC;
SHELL USA; CITGO PETROLEUM CORPORATION; TOTALENERGIES SE.; OCCIDENTAL PETROLEUM CORPORATION; DEVON ENERGY
CORPORATION; APACHE CORPORATION; CNX
RESOURCES CORPORATION; CONSOL ENERGY
INC.; OVINTIV, INC.; AMERICAN PETROLEUM
INSTITUTE; TOTALENERGIES MARKETING
USA, INC.,
Appellants.
_________________________________________
On Appeal from the United States District Court
for the District of Delaware
(D.C. No. 1:20-cv-01429)
District Judge: Honorable Leonard P. Stark
_________________________________________
3a
Argued: June 21, 2022
Before: McKEE, RESTREPO, and BIBAS,
Circuit Judges
(Filed: August 17, 2022)
_________________________________________
Theodore J. Boutrous, Jr.
GIBSON DUNN & CRUTCHER
333 S. Grand Ave.
Los Angeles, CA 90071
Thomas G. Hungar
GIBSON DUNN & CRUTCHER
1050 Connecticut Ave. NW
Washington, DC 20036
Counsel for Appellants Chevron Corp. &
Chevron USA Inc. (Nos. 21-2728 & 22-1096)
Joel M. Silverstein
Herbert J. Stern
STERN KILCULLEN & RUFOLO
325 Columbia Turnpike, Suite 110
Florham Park, NJ 07932
Counsel for Appellants Chevron Corp. &
Chevron USA Inc. (No. 21-2728)
Joshua D. Dick
GIBSON DUNN & CRUTCHER
555 Mission St., Suite 3000
San Francisco, CA 94105
Andrea E. Neuman
GIBSON DUNN & CRUTCHER
200 Park Ave., 47th Floor
New York, NY 10166
4a
William E. Thomson, III
GIBSON DUNN & CRUTCHER
333 S. Grand Ave.
Los Angeles, CA 90071
Counsel for Appellants Chevron Corp. &
Chevron USA Inc. (No. 22-1096)
William T. Marks
Kannon K. Shanmugam
PAUL WEISS RIFKIND WHARTON & GARRISON
2001 K St. NW
Washington, DC 20006
Daniel J. Toal
Theodore V. Wells, Jr.
PAUL WEISS RIFKIND WHARTON & GARRISON
1285 Ave. of the Americas
New York, NY 10019
Counsel for Appellants Exxon Mobil Corp. &
ExxonMobil Oil Corp. (Nos. 21-2728 &
22-1096) & XTO Energy (No. 22-1096)
Kevin H. Marino
John D. Tortorella
MARINO TORTORELLA & BOYLE
437 S. Blvd.
Chatham, NJ 07928
Counsel for Appellants Exxon Mobil Corp. &
ExxonMobil Oil Corp. (No. 21-2728)
Paul J. Fishman
ARNOLD & PORTER KAYE SCHOLER
One Gateway Ctr., Suite 1025
Newark, NJ 07102
5a
Matthew T. Heartney
John D. Lombardo
ARNOLD & PORTER KAYE SCHOLER
777 S. Figueroa St., 44th Floor
Los Angeles, CA 90017
Jonathan W. Hughes
ARNOLD & PORTER KAYE SCHOLER
3 Embarcadero Ctr., 10th Floor
San Francisco, CA 94111
Nancy G. Milburn
Diana E. Reiter
ARNOLD & PORTER KAYE SCHOLER
250 W. 55th St.
New York, NY 10019
Counsel for Appellants BP PLC &
BP America Inc. (Nos. 21-2728 & 22-1096)
Steven M. Bauer
Margaret Tough
LATHAM & WATKINS
505 Montgomery St., Suite 2000
San Francisco, CA 94111
Daniel R. Brody
Jameson R. Jones
BARTLIT BECK
1801 Wewatta St., Suite 1200
Denver, CO 80202
Counsel for Appellants ConocoPhillips & ConocoPhillips Co. (Nos. 21-2728 & 22-1096)
6a
Jeffrey S. Chiesa
Michael K. Plumb
Dennis M. Toft
CHIESA SHAHINIAN & GIANTOMASI
One Boland Dr.
West Orange, NJ 07024
Counsel for Appellants ConocoPhillips &
ConocoPhillips Co. (No. 21-2728)
Daniel J. Brown
Alexandra M. Joyce
MCCARTER & ENGLISH
405 N. King St.
Renaissance Ctr., 8th Floor
Wilmington, DE 19801
Counsel for Appellants ConocoPhillips &
ConocoPhillips Co. (No. 22-1096)
Steven M. Bauer
LATHAM & WATKINS
505 Montgomery St., Suite 2000
San Francisco, CA 94111
Counsel for Appellants Phillips 66 &
Phillips 66 Co. (Nos. 21-2728 & 22-1096)
Anthony P. Callaghan
GIBBONS
One Pennsylvania Plaza, 37th Floor
New York, NY 10119
7a
Sylvia-Rebecca Gutierrez
Thomas R. Valen
GIBBONS
One Gateway Ctr.
Newark, NJ 07102
Counsel for Appellants Phillips 66 &
Phillips 66 Co.(No. 21-2728)
Daniel J. Brown
Alexandra M. Joyce
MCCARTER & ENGLISH
405 N. King St.
Renaissance Ctr., 8th Floor
Wilmington, DE 19801
Margaret Tough
LATHAM & WATKINS
505 Montgomery St., Suite 2000
San Francisco, CA 94111
Robert W. Whetzel
RICHARDS LAYTON & FINGER
920 N. King St.
One Rodney Square
Wilmington, DE 19801
Counsel for Appellants Phillips 66 &
Phillips 66 Co. (No. 22-1096)
Kathryn M. Barber
Brian D. Schmalzbach
MCGUIREWOODS
800 E. Canal St.
Gateway Plaza
Richmond, VA 23219
8a
Jeffrey M. Beyer
Anthony J. Zarillo, Jr.
RIKER DANZIG SCHERER HYLAND & PERRETTI
One Speedwell Ave.
Headquarters Plaza
Morristown, NJ 07962
Counsel for Appellant American Petroleum
Institute (No. 21-2728)
Kevin J. Mangan
WOMBLE BOND DICKINSON
1313 N. Market St., Suite 1200
Wilmington, DE 19801
Andrew G. McBride
MCGUIREWOODS
888 16th St. NW, Suite 500
Washington, DC 20006
Counsel for Appellant American Petroleum
Institute (No. 22-1096)
David C. Frederick
[Argued]
Grace W. Knofczynski
Daniel Severson
KELLOGG HANSEN TODD FIGEL & FREDERICK
1615 M St. NW
Sumner Square, Suite 400
Washington, DC 20036
Counsel for Appellants Shell PLC &
Shell USA Inc. (Nos. 21-2728 & 22-1096)
9a
Steven L. Caponi
K&L GATES
600 N. King St., Suite 901
Wilmington, DE 19801
Counsel for Appellants Shell PLC &
Shell USA Inc. (No. 22-1096)
Joseph J. Bellew
WHITE & WILLIAMS
600 N. King St., Suite 800
Wilmington, DE 19801
Megan H. Berge
BAKER BOTTS
101 California St., Suite 3200
San Francisco, CA 94111
J. Scott Janoe
BAKER BOTTS
910 Louisiana St.
One Shell Plaza, 37th Floor
Houston, TX 77002
Counsel for Appellants Hess Corp. &
Murphy Oil Corp. (No. 22-1096)
Tristan L. Duncan
SHOOK HARDY & BACON
2555 Grand Blvd.
Kansas City, MO 64108
Daniel B. Rogers
SHOOK HARDY & BACON
201 S. Biscayne Blvd., Suite 3200
Miami, FL 33131
Counsel for Appellant Murphy USA
(No. 22-1096)
10a
Michael A. Barlow
ABRAMS & BAYLISS
20 Montchanin Rd., Suite 200
Wilmington, DE 19807
Robert P. Reznick
ORRICK HERRINGTON & SUTCLIFFE
1152 15th St. NW
Columbia Ctr.
Washington, DC 20005
Counsel for Appellant Marathon Oil Corp.
(No. 22-1096)
Shannon S. Broome
Ann M. Mortimore
HUNTON ANDREWS KURTH
50 California St., Suite 1700
San Francisco, CA 94111
Shawn P. Regan
HUNTON ANDREWS KURTH
200 Park Ave., 52nd Floor
New York, NY 10166
Antionette D. Hubbard
MARON MARVEL BRADLEY & ANDERSON
1201 N. Market St., Suite 900
Wilmington, DE 19801
Counsel for Appellants Marathon Petroleum
Corp., Marathon Petroleum Co. LP, &
Speedway LLC (No. 22-1096)
Robert E. Dunn
EIMER STAHL
99 S. Almaden Blvd., Suite 642
San Jose, CA 95113
11a
Nathan P. Eimer
Pamela R. Hanebutt
Lisa S. Meyer
EIMER STAHL
224 S. Michigan Ave., Suite 1100
Chicago, IL 60604
Counsel for Appellant Citgo Petroleum Corp.
(No. 22-1096)
Jeffrey L. Moyer
RICHARDS LAYTON & FINGER
920 N. King St.
One Rodney Square
Wilmington, DE 19801
Vanessa Lavely
Kevin J. Orsini
CRAVATH SWAINE & MOORE
825 Eighth Ave.
Worldwide Plaza
New York, NY 10019
Counsel for Appellant Occidental Petroleum
Corp. (No. 22-1096)
Joy C. Fuhr
Brian D. Schmalzbach
MCGUIREWOODS
800 E. Canal St.
Gateway Plaza
Richmond, VA 23219
12a
Christian J. Singewald
WHITE & WILLIAMS
600 N. King St., Suite 800
Wilmington, DE 19801
Counsel for Appellant Devon Energy Corp.
(No. 22-1096)
Michael A. Barlow
ABRAMS & BAYLISS
20 Montchanin Rd., Suite 200
Wilmington, DE 19807
Alexandra Ewing
Robert W. Whetzel
RICHARDS LAYTON & FINGER
920 N. King St.
One Rodney Square
Wilmington, DE 19801
Robert P. Reznick
ORRICK HERRINGTON & SUTCLIFFE
1152 15th St. NW
Columbia Ctr.
Washington, DC 20005
Counsel for Appellant Apache Corp.
(No. 22-1096)
J. Benjamin Aguinaga
JONES DAY
2727 N. Harwood St., Suite 600
Dallas, TX 75201
Noel J. Francisco
David M. Morrell
JONES DAY
51 Louisiana Ave. NW
Washington, DC 20001
13a
David C. Kiernan
JONES DAY
555 California St., 26th Floor
San Francisco, CA 94104
Counsel for Appellants CNX Resources Corp.,
Consol Energy Inc., & Ovintiv Inc.
(No. 22- 1096)
Tracy A. Roman
Kathleen T. Sooy
CROWELL & MORING
1001 Pennsylvania Ave. NW
Washington, DC 20004
Counsel for Appellants CNX Resources Corp. &
Consol Energy Inc. (No. 22-1096)
Honor R. Costello
CROWELL & MORING
590 Madison Ave., 20th Floor
New York, NY 10022
Counsel for Appellant Consol Energy Inc.
(No. 22-1096)
Michael F. Healy
SHOOK HARDY & BACON
555 Mission St., Suite 2300
San Francisco, CA 94105
Mackenzie M. Wrobel
DUANE MORRIS
1201 N. Market St., Suite 501
Wilmington, DE 19801
14a
Michael L. Fox
DUANE MORRIS
7500 B St., Suite 2900
San Diego, CA 92101
Counsel for Appellant Ovintiv Inc.
(No. 22-1096)
Blake K. Rohrbacher
Alexandra Ewing
Robert W. Whetzel
RICHARDS LAYTON & FINGER
920 N. King St.
One Rodney Square
Wilmington, DE 19801
Counsel for Appellants TotalEnergies Marketing USA Inc. & Total Energies SE (No. 221096)
Jonathan S. Abady
Matthew D. Brinckerhoff
[Argued]
Ananda V. Burra
Max R. Selver
EMERY CELLI BRINCKERHOFF ABADY WARD & MAAZEL
600 Fifth Ave., 10th Floor
New York, NY 10020
Gerald Krovatin
Helen A. Nau
KROVATIN NAU
60 Park Place, Suite 1100
Newark, NJ 07102
Counsel for Appellee City of Hoboken
(No. 21-2728)
15a
Stephanie D. Biehl
Matthew K. Edling
Quentin C. Karpilow
Victor M. Sher
[Argued]
SHER EDLING
100 Montgomery St., Suite 1410
San Francisco, CA 94104
Ralph K. Durstein, III
Christian D. Wright
OFFICE OF ATTORNEY GENERAL OF DELAWARE
Delaware Department of Justice
820 N. French St.
Carvel Office Building
Wilmington, DE 19801
Jameson A.L. Tweedie
DELAWARE DEPARTMENT OF JUSTICE
Environmental Unit
391 Lukens Dr.
New Castle, DE 19720
Counsel for Appellee Delaware (No. 22-1096)
James P. Davy
ALL RISE TRIAL & APPELLATE
P.O. Box 15216
Philadelphia, PA 19125
Counsel for Amici Federal Courts &
Foreign Relations Scholars (No. 22-1096)
16a
Philip S. Goldberg
SHOOK HARDY & BACON
1800 K St. NW, Suite 1000
Washington, DC 20006
Counsel for Amici National Association of
Convenience Stores, NATSO Inc, Society of
Gasoline Marketers of America & National
Association of Manufacturers (No. 21-2728) &
National Association of Manufacturers
(No. 22-1096)
Jamison Davies
NEW YORK CITY LAW DEPARTMENT
100 Church St.
New York, NY 10007
Counsel for Amicus City of New York
(No. 21-2728)
Peter D. Huffman
NATURAL RESOURCES DEFENSE COUNCIL
1152 15th St. NW, Suite 300
Washington, DC 20005
Counsel for Amicus Natural Resources Defense
Council (Nos. 21-2728 & 22-1096)
17a
Christian D. Wright
O FFICE OF A TTORNEY G ENERAL OF D ELAWARE
Delaware Department of Justice
820 N. French St.
Carvel Office Building
Wilmington, DE 19801
Counsel for Amici Delaware, Connecticut,
Hawaii, Maine, Maryland, Minnesota, New
Jersey, New Mexico, New York, Oregon, Rhode
Island, Washington, Massachusetts,
Pennsylvania, & District of Columbia
(No. 21-2728)
Aaron Kleinbaum
O FFICE OF A TTORNEY G ENERAL OF N EW J ERSEY
Division of Law
25 Market St.
Hughes Justice Complex
Trenton, NJ 08625
Counsel for Amicus New Jersey (No. 22-1096)
Thomas M. Fisher
O FFICE OF A TTORNEY G ENERAL OF I NDIANA
302 W. Washington St.
Indianapolis, IN 46204
Counsel for Amici Indiana (Nos. 21-2728 &
22-1096) & Alabama, Alaska, Arkansas,
Georgia, Kansas, Kentucky, Mississippi,
Missouri, Montana, Nebraska, Oklahoma,
South Carolina, Texas, Utah, Virginia, &
Wyoming (No. 22-1096)
18a
William M. Jay
Andrew Kim
G OODWIN P ROCTER
1900 N St. NW
Washington, DC 20036
Counsel for Amicus Chamber of Commerce of
the United States of America
(Nos. 21-2728 & 22-1096)
Tristan L. Duncan
SHOOK HARDY & BACON
2555 Grand Blvd.
Kansas City, MO 64108
Daniel B. Rogers
S HOOK H ARDY & B ACON
201 S. Biscayne Blvd., Suite 3200
Miami, FL 33131
Counsel for Amici General Richard B. Myers &
Admiral Michael G. Mullen (No. 21-2728)
Patrick A. Thronson
J ANET & SUGGS
4 Reservoir Circle, Suite 200
Baltimore, MD 21208
Counsel for Amici National League of Cities &
United States Conference of Mayors
(Nos. 21-2728 & 22-1096)
Scott L. Nelson
P UBLIC C ITIZEN L ITIGATION G ROUP
1600 20th St. NW
Washington, DC 20009
Counsel for Amicus Public Citizen Inc.
(No. 22-1096)
19a
Jonathan W. Cuneo
C UNEO G ILBERT & L A D UCA
4725 Wisconsin Ave NW, Suite 200
Washington, DC 20016
Counsel for Amicus Robert S. Taylor
(No. 22-1096)
William A. Rossbach
R OSSBACH L AW
401 N. Washington St.
P.O. Box 8988
Missoula, MT 59807
Counsel for Amici Robert Kopp, Michael
Oppenheimer, Kristina Dahl, Brenda
Ekwurzel, Peter C. Frumhoff, Gary B. Griggs,
Sverre L. Leroy, L. Delta Merner, & Donald J.
Wuebbles (No. 22-1096)
Ron Kilgard
K ELLER ROHRBACK
3101 N. Central Ave., Suite 1400
Phoenix, AZ 85012
Counsel for Amici Robert Brulle, Center for
Climate Integrity, Chesapeake Climate Action
Network, Justin Farrell, Benjamin Franta,
Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran, & Union of Concerned Scientists
(No. 22-1096)
Kenneth T. Kristl
W IDENER U NIVERSITY S CHOOL OF L AW
4601 Concord Pike
P.O. Box 7474
Wilmington, DE 19803
Counsel for Amici Legal Scholars
(No. 22-1096)
20a
______________________
OPINION OF THE COURT
______________________
BIBAS, Circuit Judge.
Our federal system trusts state courts to hear
most cases—even big, important ones that raise federal defenses. Plaintiffs choose which claims to file,
in which court, and under which law. Defendants may
prefer federal court, but they may not remove their
cases to federal court unless federal laws let them.
Here, they do not.
Oil companies ask us to hear two sweeping climate-change suits. But the plaintiffs filed those suits
in state court based only on state tort law. And there
is no federal hook that lets defendants remove them
to federal court. So we will affirm the District Courts’
orders sending them back.
I. CLIMATE CHANGE COMES TO COURT
Coastal residents have a problem. In recent decades, the oceans have risen, harming beaches and
marshland. And communities have suffered torrential rains and stronger hurricanes.
Many residents blame fossil fuels for climate
change. Burning fossil fuels releases carbon dioxide.
And that carbon dioxide, studies suggest, can heat the
air and eventually make the oceans rise.
Angered, cities and states across the country have
sued oil companies. They say the oil companies knew
how dangerous fossil fuels were for the environment
yet did not slow production. And they said nothing
about its dangers; on the contrary, they labored to convince the public that burning fossil fuels was fine.
21a
Here, we address two of those suits. Delaware
and Hoboken, New Jersey each sued the oil companies
in state court for state-law torts. By “produc[ing],
marketing, and s[e]l[ling] fossil fuels,” they said, the
oil companies had worsened climate change. Hoboken
App. 68. So they sought damages for the environmental harm they had suffered and injunctions to stop future harm.
Though these suits started in state court, they did
not stay there. The oil companies promptly removed
them to federal district courts. The suits’ broad focus
on “global climate change,” the companies argued,
“demand[ed] resolution by a federal court under federal law.” Hoboken App. 194; Del. App. 94. They listed
several reasons why:
●
the tort claims arose under federal law, either
because:
○
they were inherently federal, not state
claims, or
○
they raised substantive federal issues;
●
the suits related to producing oil on the Outer
Continental Shelf; and
●
the oil companies were acting under federal
officers.
But both District Courts rejected these theories.
And they were in good company: so far, four other circuits have refused to allow the oil companies to remove similar state tort suits to federal court. See
Rhode Island v. Shell Oil Prods. Co., 35 F.4th 44, 50–
51 (1st Cir. 2022); Mayor & City Council of Balt. v. BP
P.L.C., 31 F.4th 178, 238 (4th Cir. 2022); City & Cnty.
of Honolulu v. Sunoco LP, 2022 WL 2525427, at *2
(9th Cir. July 7, 2022); Cnty. of San Mateo v. Chevron
22a
Corp., 32 F.4th 733, 744 (9th Cir. 2022); Bd. of Cnty.
Comm’rs of Boulder Cnty. v. Suncor Energy (U.S.A.)
Inc., 25 F.4th 1238, 1246 (10th Cir. 2022).
We agree with our sister circuits:
●
These two lawsuits neither are inherently
federal nor raise substantial federal issues
that belong in federal court.
●
Oil production on the Outer Continental Shelf
is too many steps removed from the burning
of fuels that causes climate change.
●
Plus, Delaware and Hoboken are not suing
over actions that the companies were directed
to take by federal officers.
So we will affirm the District Courts’ orders remanding these cases to state court.
II. THESE STATE TORT CLAIMS DO NOT
“ARISE UNDER” FEDERAL LAW
Not all claims belong in federal court. The Constitution limits us to hearing only cases involving
claims “arising under” its provisions, federal laws, or
treaties, or those involving admiralty or certain parties. U.S. Const. art. III, § 2, cl. 1. All other claims
must go to state courts instead. The oil companies
may remove these cases to federal court only if they
present federal questions. 28 U.S.C. §§ 1331, 1441.
Most federal-question cases allege violations of
the Constitution, federal statutes, or federal common
law. But Delaware and Hoboken allege only the torts
of nuisance, trespass, negligence (including negligent
failure to warn), and misrepresentation, plus consumer-fraud violations, all under state law. So the
companies must show either that these state claims
are completely preempted by federal law or that some
23a
substantial federal issue must be resolved. Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987); Grable
& Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545
U.S. 308, 313–14 (2005). They show neither.
A. These are state, not federal, claims
If plaintiffs say their claims are state-law claims,
we almost always credit that. That is because plaintiffs are “the master[s] of the[ir] claim[s].” Caterpillar,
482 U.S. at 392. They may “avoid federal jurisdiction
by exclusive reliance on state law.” Id. After all, they
choose to sue, so they choose why.
But once in a great while, we “recharacteriz[e] a
state law claim as a federal claim removable to [federal] court.” Goepel v. Nat’l Postal Mail Handlers Union, 36 F.3d 306, 312 (3d Cir. 1994). We can do that
only when some federal statute completely preempts
state law.
Complete preemption is different from ordinary
preemption. Ordinary preemption is a defense that
applies when incompatible federal and state laws regulate the same actions. A defendant may raise ordinary preemption to defeat the plaintiff’s state-law
claim. Caterpillar, 482 U.S. at 392–93.
Complete preemption, by contrast, is a potent jurisdictional fiction. It lets courts recast a state-law
claim as a federal one. Id. at 393. Defendants can
thus remove the suit to federal court. Ordinary
preemption defenses cannot work this alchemy. Id.
But complete preemption is rare. Federal law
completely preempts state law only when there is (1) a
federal statute that (2) authorizes federal claims “vindicating the same interest as the state claim.” Goepel,
36 F.3d at 315. Only statutes that check both boxes
can transform state-law claims into federal ones. Id.
24a
at 311–12. And the Supreme Court has identified only
three. See Beneficial Nat’l Bank v. Anderson, 539 U.S.
1, 6–8, 10–11 (2003) (ERISA, the National Bank Act,
and the Labor-Management Relations Act). Unsurprisingly, the companies cannot cite an applicable
statute that passes this test.
So instead, the oil companies try another tack.
They suggest a new form of complete preemption, one
that relies not on statutes but federal common law.
Rather than limiting ourselves to three federal statutes, they say, we should just ask if our constitutional
system “permit[s] the controversy to be resolved under
state law.” Oil Cos. Br. 29 (Hoboken) (quoting Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 641
(1981)). Otherwise, states could brush off national interests and upend the federal system. But this theory
has a fatal flaw: the lynchpin case that the oil companies cite is about garden-variety preemption, not the
complete preemption they need. See Tex. Indus., 451
U.S. at 641.
Undeterred, the oil companies argue that only
federal common law can resolve far-reaching climatechange suits. In support, they point to a recent decision holding that a climate-change suit had to be decided under federal, not state, law. See City of New
York v. Chevron Corp., 993 F.3d 81, 90–93 (2d Cir.
2021). But that case involved another ordinarypreemption defense to a case first filed in federal
court. Id. at 94. It did not even try to check the boxes
needed for complete preemption. Nor did it suggest
another way to get there. See id. at 93–94 (acknowledging that its preemption analysis might not satisfy
the “heightened standard unique to the removability
inquiry”).
25a
Next, the companies cite two circuit cases that relabeled state-common-law claims as federal. See Sam
L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 924,
926–29 (5th Cir. 1997); New SD, Inc. v. Rockwell Intl
Corp., 79 F.3d 953, 955 (9th Cir. 1996). Neither explains what gives federal courts the authority to refashion state-common-law claims as federal. Besides,
most courts recognize that these cases are not good
law. See, e.g., Earth Island Inst. v. Crystal Geyser Water Co., 521 F. Supp. 3d 863, 874–76 (N.D. Cal. 2021)
(noting New SD’s unique facts and doubting its continued viability); Del. App. 37 n.9 (collecting cases declining to follow Sam L. Majors). We will not follow
those outliers.
Finally, the companies cite a Supreme Court footnote’s hint that federal courts have broad power to
“determine whether the real nature of [a] claim is federal.” Federated Dep’t Stores, Inc. v. Moitie, 452 U.S.
394, 397 n.2 (1981) (internal quotation marks omitted). But the Court later walked that suggestion back.
Recognizing the “considerable confusion” caused by
“Moitie’s enigmatic footnote,” the Court later cabined
it to its “case-specific context.” Rivet v. Regions Bank
of La., 522 U.S. 470, 477–78 (1998) (internal quotation
marks omitted). The footnote did not change “the
rule” that “a federal defense,” like ordinary preemption, does not justify removal. Id. at 478.
But the oil companies’ biggest problem is that our
precedent already forecloses their test. We have said
that “the two-part test for complete preemption” is
“the only basis for recharacterizing a state law claim
as a federal claim removable to [federal] court.” Goepel, 36 F.3d at 312 (emphasis added). So because the
oil companies have no statute, they have no removal
jurisdiction either.
26a
B. Nor do they raise a substantial federal
question
The state tort claims may not be federal, the oil
companies say, but at least they raise “substantial,
disputed federal questions.” Oil Cos. Br. 31 (Hoboken)
(citing Grable, 545 U.S. at 313–14); Oil Cos. Br. 30
(Del.) (same). And when state claims require resolving substantial federal issues, federal courts can hear
them. Gunn v. Minton, 568 U.S. 251, 258 (2013). But
neither of the federal issues the oil companies identify
justifies federal jurisdiction here.
First, the companies rehash their common-law
preemption argument. Because emissions claims
“arise in an area governed exclusively by federal law,”
they argue, every “element[] of these claims [is] necessarily federal.” Oil Cos. Br. 31 (Del.) (emphasis omitted); see also Oil Cos. Br. 31 (Hoboken) (same).
But this is the same wolf in a different sheep’s
clothing. The federal issue that the oil companies
identify is whether federal common law governs these
claims. Yet as we have said, there is no complete
preemption here. And ordinary preemption is a defense. Defenses are not the kinds of substantial federal questions that support federal jurisdiction. Metro
Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987).
Contrast this argument with the two key cases defining what federal questions are substantial and disputed. In each, to prove some element of a state-law
claim, the plaintiff had to win on an issue of federal
law. In Grable, an “essential element of [Grable’s
state] quiet title claim” required it to prove that the
IRS had not “give[n] it adequate notice, as defined by
federal law.” 545 U.S. at 314–15. And in Gunn, to
show legal malpractice, Gunn had to prove that if his
27a
lawyers had been competent, “he would have prevailed in his federal patent infringement case.” 568
U.S. at 259.
Finally, the oil companies raise First Amendment
problems. They stress that these suits charge them
with misrepresenting “matters of public concern”
about climate change. Oil Cos. Br. 33 (Hoboken); Oil
Cos. Br. 33 (Del.). But though the First Amendment
limits state laws that touch speech, those limits do not
extend federal jurisdiction to every such claim. State
courts routinely hear libel, slander, and misrepresentation cases involving matters of public concern. The
claims here arise under state law, and their elements
do not require resolving substantial, disputed federal
questions.
III. THESE CLAIMS ARE TOO FAR REMOVED
FROM OIL PRODUCTION ON THE
OUTER CONTINENTAL SHELF
The oil companies fall back on statutes that let
federal courts hear state-law claims on special subjects. Here, they cite a law that lets federal courts
hear cases
arising out of, or in connection with (A) any operation conducted on the outer Continental
Shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf,
or which involves rights to such minerals. . . .
43 U.S.C. § 1349(b)(1).
The companies stress that a sizable chunk of oil
comes from the Shelf. See Oil Cos. Br. 60 (Hoboken)
(one-third of U.S.-produced oil); Oral Arg. 39:04–20
(1–5% of global oil). So, they say, the Shelf Act lets us
hear these cases. To weigh this argument, we must
28a
figure out what the Shelf Act means and how it applies.
A. For jurisdiction, the Shelf Act requires
a close link to operations on the Shelf
1. Oil production on the Shelf need not cause the
suit. Start with the text. The parties (and other circuits) dispute what it takes for a suit to be “in connection with” shelf operations. Hoboken and Delaware
argue that this phrase limits jurisdiction to cases
where oil production is a but-for cause of the tort or
the like. The Fourth, Fifth, and Tenth Circuits agree.
See Mayor & City Council of Balt., 31 F.4th at 220; In
re Deepwater Horizon, 745 F.3d 157,163 (5th Cir.
2014); Bd. of Cnty. Comm’rs of Boulder Cnty., 25 F.4th
at 1272–75.
But that reading is too cramped. “Connection”
reaches beyond causation. It means a “causal or logical relation or sequence.” Connection (def. 1a), Webster’s Ninth New Collegiate Dictionary (1988) (emphasis added); accord Connexion (def. 3), Oxford English
Dictionary (2d ed. 1989) (“a bond of interdependence,
causality, logical sequence, coherence, or the like”).
Legos, puzzle pieces, and train cars connect, though
they do not cause one another. And as statisticians
stress, a correlation or connection does not imply causation.
The structure of the provision confirms this reading. The jurisdictional phrase covers both suits “arising out of” production on the Shelf and those “in connection with” it. 43 U.S.C. § 1349(b)(1). The most natural reading is that the arising-out-of language “asks
about causation; but” the in-connection-with wording
“contemplates that some relationships will support jurisdiction without a causal showing.” Ford Motor Co.
29a
v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1026
(2021) (interpreting similar language from a judicial
rule requiring that specific personal jurisdiction “arise
out of or relate to” the disputed conduct (internal quotation marks omitted)). Reading the second half to require causation would make it redundant with the
first half. See Yates v. United States, 574 U.S. 528,
543 (2015) (canon against surplusage).
Though we depart from some circuits’ approaches,
other precedent supports our reasoning. Indeed, at
least the Ninth Circuit reads the Shelf Act not to require but-for causation. San Mateo, 32 F.4th at 754.
Plus, courts have read similar connection language in
different statutes or rules to cover more than just butfor causes. See, e.g., Maracich v. Spears, 570 U.S. 48,
59 (2013) (Privacy Act); United States v. Loney, 219
F.3d 281, 284 (3d Cir. 2000) (Sentencing Guidelines).
“[I]n connection with” is “broad.” Mont v. United
States, 139 S. Ct. 1826, 1832 (2019) (interpreting that
language in another statute). So we read it broadly.
2. A suit must be linked closely to production or
development on the Shelf. But however broad, the
statute must stop somewhere. See id. (recognizing
that “in connection with” must have “outer bounds”).
Otherwise, “connections, like relations, stop nowhere.” Maracich, 570 U.S. at 59 (internal quotation
marks omitted). Applied loosely, the statute could
sweep in many routine state-law claims. Fender
benders might be connected to the Shelf if the cars’
gas tanks held gas produced there. An insurance dispute over arson could be connected if the arsonist
threw Shelf oil on the fire. Or a products-liability suit
over a defective hair dryer might be connected if Shelf
petroleum went into the hair dryer’s plastic. But our
system presumes that most state-law claims belong in
30a
state, not federal, court. 13 Charles A. Wright et al.,
Federal Practice & Procedure § 3522 (4th ed. 2022);
see U.S. Const. art. III, § 2, cl. 1 (limiting federal jurisdiction). And we must read this statute “consistent
with [this] principle[] of federalism inherent in our
constitutional structure.” Bond v. United States, 572
U.S. 844, 856 (2014).
As we have explained, Delaware and Hoboken
bring traditional state-law claims. And their connection to the Shelf is not immediately apparent from
their complaints. They never reference the Shelf. The
gist of their complaint is not about producing oil on
the Shelf but selling it to people to burn in their cars,
homes, and manufacturing plants.
To avoid “usurp[ing] state judicial power” by hearing this case, we must decide whether it falls beyond
the bounds of the statute. 13 Wright et al., Federal
Practice & Procedure § 3522. Alone, “the phrase ‘in
connection with’ . . . provides little guidance” and is
“essentially indeterminat[e].” Maracich, 570 U.S. at
59–60 (alteration in original) (internal quotation
marks omitted). So it cannot help us decide which
cases belong in state court and which should come to
federal court. Still, federalism counsels in favor of
finding some limit. In similar statutes, we have divined “a limiting principle” by looking to “the structure of the statute[,] its other provisions,” and the rest
of the disputed provision itself. Id. at 60; see also
Chadbourne & Parke LLP v. Troice, 571 U.S. 377, 387
(2014) (focusing “in connection with” in the PSLRA by
looking to other phrases in the provision).
The Shelf Act focuses narrowly on operations on
the Outer Continental Shelf, the underwater area outside state boundaries but under federal control. See
43 U.S.C. §§ 1331(a), 1301(a) (defining the Shelf).
31a
Consider the surrounding language of the jurisdictional provision. We may hear cases “in connection
with (A) any operation conducted on the outer Continental Shelf which involves exploration, development,
or production of the minerals, of the subsoil and seabed of the outer Continental Shelf.” 43 U.S.C.
§ 1349(b)(1) (emphases added). This phrasing focuses
in on “physical activity” taken “on the [Shelf].” Tenn.
Gas Pipeline v. Houston Cas. Ins. Co., 87 F.3d 150, 154
(5th Cir. 1996). Indeed, as the Fifth Circuit has explained, the word “operation” requires courts to decide
whether actions occurred “on the [Shelf] or not.”
Amoco Prod. Co. v. Sea Robin Pipeline Co., 844 F.2d
1202, 1207 (5th Cir. 1988).
The operations covered are tied to “exploration,
development, or production,” not anything like consumption, combustion, or emission. Those operations
must be “conducted on” the Shelf itself. Even more
precisely, the location is the Shelf’s very “subsoil and
seabed.” This language all focuses on the oil drilling
on the Shelf itself, not oil consumption hundreds or
thousands of miles away.
Other parts of the Shelf Act also reinforce this
limitation to operations on the Shelf. The next subparagraph creates federal jurisdiction over lease and
permit disputes to decide who has the right to produce
oil on the Shelf. § 1349(b)(1)(B). The paragraph after
that creates federal jurisdiction over production-related injuries. § 1349(b)(2). Both types of covered conduct are tethered to the physical production of Shelf
oil, not its later consumption.
Likewise, the venue rules for the Shelf Act focus
on activities that are not within states. For instance,
the Act locates these suits in “the judicial district of
the State nearest the place the cause of action arose.”
32a
§ 1349(b)(1) (emphasis added). That language is unusual; venue laws typically send lawsuits to the district
“in which” or “where” the events happened. See, e.g.,
28 U.S.C. §§ 1391(b)(2), (e)(1) & (1)(B), (f)(1), 1400(b);
42 U.S.C. § 2000e-5(f)(3); 49 U.S.C. § 32308(e). But
“nearest” makes sense if the Act primarily covers operations out on the Shelf, beyond any state’s boundaries.
Indeed, the Act focuses on setting rules for that
narrow geographic area. The Act as a whole “define[s]
a body of law applicable to the seabed, the subsoil, and
the fixed structures . . . on the outer Continental
Shelf.” Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S.
352, 355 (1969). Thus, it sets up a program for leasing
out Shelf land. 43 U.S.C. § 1334. And it sets which
laws apply there. § 1333; Rodrigue, 395 U.S. at 356–
57. This too is directed at activities on the Shelf itself.
Last, though this textual reasoning may be new,
the operational limitation fits the intuition of past
precedent. Shelf Act cases fall into four buckets:
●
Disputes about who may operate on the Shelf.
See, e.g., W&T Offshore, Inc. v. Bernhardt,
946 F.3d 227, 231–32 (5th Cir. 2019) (lease
dispute); United Offshore Co. v. S. Deepwater
Pipeline Co., 899 F.2d 405, 407 (5th Cir. 1990)
(contract dispute); Cutting Underwater Tech.
USA, Inc. v. Eni U.S. Operating Co., 671 F.3d
512, 513 (5th Cir. 2012) (mem.) (same).
●
Cases about transporting oil or gas from the
Shelf. See, e.g., Medco Energi US, LLC v. Sea
Robin Pipeline Co., 729 F.3d 394, 396 (5th Cir.
2013).
●
Disputes over first-order contracts to buy oil
or gas produced on the Shelf. See, e.g., Amoco
33a
Prod. Co. v. Sea Robin Pipeline Co., 844 F.2d
1202, 1203, 1210 (5th Cir. 1988) (involving
contracts that “b[ore] on the production of . . .
particular” oil and gas reservoirs on the
Shelf).
●
And tort suits about accidents on the Shelf.
See, e.g., Petrobras Am., Inc. v. Vicinay Cadenas, S.A., 815 F.3d 211, 213 (5th Cir. 2016)
(chain broke & oil equipment sank); In re
Deepwater Horizon, 745 F.3d at 161–62 (Gulf
oil spill); Barker v. Hercules Offshore, Inc.,
713 F.3d 208, 211–12 (5th Cir. 2013) (oil-rig
worker fell to his death).
All those cases target activity on the Shelf or pipelines connected to it. Thus, though they do not expressly adopt our operational limitation, their conclusions fit with our reasoning. Cf. San Mateo, 32 F.4th
at 753 (analogizing the Shelf Act to jurisdiction over
federal enclaves). So we ask: do the lawsuits here
target actions on or closely connected to the Shelf? No.
B. These suits are too many steps removed
from operations on the Shelf for jurisdiction
Delaware and Hoboken try to cast their suits as
just about misrepresentations. But their own complaints belie that suggestion. They charge the oil companies with not just misrepresentations, but also trespasses and nuisances. Those are caused by burning
fossil fuels and emitting carbon dioxide.
These claims are all too far away from Shelf oil
production. True, Delaware and Hoboken take issue
with the oil companies’ entire business, from production through sale. But the carbon emissions they deplore come not from extracting oil and gas, but
34a
burning them: driving cars, heating houses, fueling
machinery. Indeed, if the oil companies had produced
oil, stored it, and never sold it, their carbon emissions
would be a fraction of their size. Thus, Delaware and
Hoboken are upset, not by Shelf production, but by
what oil companies did with their oil after it hit the
mainland: sell it for people to burn. That is several
steps further away from exploration and production
on the Shelf than pipeline disputes and oil-rig injuries. So the Shelf Act does not give us jurisdiction to
hear this suit.
IV. THESE SUITS DO NOT TARGET ACTIONS
TAKEN FOR THE GOVERNMENT
Finally, the oil companies say that we can hear
these suits because of their business connections to
the federal government. Cf. 28 U.S.C. § 1442(a) (allowing removal of claims “relating to” actions taken
“under” federal officers). They press several theories:
●
The government has leased them drilling
rights on the Shelf.
●
The companies have also contributed oil to
the government’s Strategic Petroleum Reserve.
●
Plus, one company operated the national reserve from World War II through the 1970s.
●
During World War II, the companies also produced specialty materials for the war effort.
●
And they have continued to contribute specialty fuels since.
All these theories fail.
Start with the Shelf leases. Though the federal
government grants the leases, oil produced under
35a
them is produced “to sell on the open market,” not specifically for the government. Del Br. 50; see 43 U.S.C.
§ 1334; Bd. of Cnty. Comm’rs of Boulder Cnty., 25
F.4th at 1253–54. Nor do the leases impose close federal control. And complying with run-of-the-mill regulations on oil and gas production is not enough for
federal jurisdiction. See Watson v. Philip Morris Cos.,
551 U.S. 142, 152–53 (2007); see 43 U.S.C. § 1334
(lease regulatory program); Del. App. 49–52 (same).
The companies’ other theories at least focus on
products or services that they provided to the federal
government. But these, too, are unavailing. In their
complaints, both Hoboken and Delaware insist that
they are not suing over emissions caused by fuel provided to the federal government.
Resisting this conclusion, the companies say that
these suits cannot separate harm caused by military
fuel use from harm caused by civilian fuel use. So
they ask us to disregard these disclaimers as “merely
artful pleading designed to circumvent federal officer
jurisdiction.” St. Charles Surgical Hosp., LLC v. La.
Health Serv. & Indem. Co., 990 F.3d 447, 451 (5th Cir.
2021) (internal quotation marks omitted).
But the disclaimers are no ruse. Artful pleading
disguises federal claims as state ones. See 14C Wright
et al., Federal Practice & Procedure § 3722.1 (artful
pleading). Yet here, there are no federal claims to disguise. The causes of action are about state torts. And
there is no complete preemption. So this argument
just retreads well-worn ground.
Instead, Delaware and Hoboken carve out a small
island that would needlessly complicate their cases.
One amicus estimates that the Department of Defense
is responsible for less than 1/800th of the world’s
36a
energy consumption. Robert Taylor Amicus Br. 15–
16. Delaware and Hoboken urge us not to hang our
jurisdiction on so small a slice of the pie. We will not.
* * * * *
Climate change is an important problem with national and global implications. But federal courts cannot hear cases just because they are important. The
Constitution restricts us to resolving claims that are
about federal law or that Congress has expressly authorized us to hear. These claims check neither box.
So we cannot hear them.
37a
APPENDIX B
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CITY OF HOBOKEN,
Civil Action No.
Plaintiff, 20-cv-14243
v.
EXXON MOBIL CORP.,
ET AL.,
OPINION
Defendants. Sept. 8, 2021
John Michael Vazquez, U.S.D.J.
This case is one of many similar cases recently
filed throughout the United States seeking to hold oil
and gas companies accountable for their role in climate change. In this matter, Plaintiff the City of Hoboken (“Plaintiff” or “Hoboken”) alleges that Defendants, who are oil and gas companies and related entities, engaged in a decades-long campaign to downplay
the effect of fossil fuel usage on climate change. Plaintiff further alleges that it and its residents have been
damaged by this conduct through the dire effects of
global warming. Presently before the Court is Plaintiff’s motion to remand this case to state court, D.E.
94, and Defendants’ motion to strike certain portions
of Plaintiff’s reply brief, D.E. 106. The Court reviewed
all the submissions in support and opposition to the
motions1 and considered the motions without oral
1
Plaintiff’s brief in support of its motion to remand, D.E. 94,
is referred to as “Plf. Br.”; Defendants’ brief in opposition, D.E.
100, is referred to as “Defs. Opp.”; and Plaintiff’s reply, D.E. 101,
is referred to as “Plf. Reply”. The parties also filed notices of
38a
argument pursuant to Federal Rule of Civil Procedure
78(b) and Local Civil Rule 78.1(b). For the reasons
discussed below, Plaintiff’s motion to remand is
GRANTED and Defendants’ motion to strike is DENIED.
I.
FACTUAL BACKGROUND2 AND PROCEDURAL HISTORY
Through this matter, Hoboken seeks compensation to offset the costs it has and will continue to incur
to protect itself from the effects of global warming.
Plaintiff contends that Defendants’ production, marketing, and sale of fossil fuels has been a “substantial
factor” in skyrocketing carbon dioxide (CO2) emissions. Compl. ¶ 42. The rising concentration of CO2
emissions is a driving force in climate change.
Id. ¶ 41. And global warming, in turn, is causing climate disruption and damage throughout the world,
including in Hoboken. Hoboken is a densely populated urban area located across the Hudson River
from New York City. Id. ¶¶ 8, 10, 46. As a result, it
is particularly vulnerable to damage from rising sea
levels and extreme rainfall events caused by global
warming. Id. ¶¶ 45, 225-54. Hoboken has already incurred substantial damage from weather events associated with global warming, including Hurricane
Irene and Superstorm Sandy. See id. ¶ 11. Hoboken
submits that it will continue to experience extreme
weather events, damage from rising sea levels, and
supplemental authority and responses. D.E. 108, 110, 115, 117,
118. Defendants’ brief in support of their motion to strike, D.E.
106, is referred to as “Defs. Strike Br.”; Plaintiff’s brief in opposition, D.E. 107, is referred to as “Plf. Strike Opp.”; and Defendants’ reply, D.E. 109, is referred to as “Defs. Strike Reply.”
2
The factual background is taken from the Complaint. D.E.
1-2 (“Compl.”).
39a
other problems associated with global warming. See
id. ¶¶ 225-27.
Plaintiff alleges that Defendants have known
about and studied the potential harms from fossil fuel
usage since the 1950s. Id. ¶ 75.
Despite this
knowledge, Defendants decided to prioritize their
profits and actively suppressed evidence of the effects
of global warming. Id. ¶¶ 75, 107. Beginning in the
late 1980s, Exxon’s strategy to combat global warming
“shifted from trying to understand the impact of fossil
fuels on climate change to trying to dispute and conceal their impact. It has continued to employ this
strategy through the present day.” Id. ¶ 116. To do
so, Exxon and other Defendants created front groups
with neutral names to promote climate science denial
and misinformation campaigns. Id. ¶¶ 118-61. To
that end, from 1998 to 2007, “ExxonMobil gave over
$20 million to think tanks and organizations that published research and ran campaigns denying climate
science.” Id. ¶ 159. But while Defendants were engaged in their misinformation campaign, they were
actively making business plans that accounted for rising sea levels and warming temperatures due to
global warming. Id. ¶¶ 162-71.
As the scientific certainty about global warming
solidified over the last decade, Defendants switched
their tactics from outright deception to a plan to
“greenwash” consumers. Greenwashing refers to Defendants’ strategy to make consumers think that Defendants are committed to combatting climate change
when, in fact, Defendants have not made any changes
to their fundamental, core business of extracting and
producing fossil fuels. Id. ¶¶ 172-92. “Defendants’
greenwashing campaigns,” which still continue, “are
cover for their accelerating extraction, production,
40a
marketing and sale of fossil fuels—the actual cause of
climate change.” Id. ¶ 194. In addition to the pivot to
“greenwashing,” Defendants also continue to fund organizations that deny global warming. Id. ¶ 209.
Plaintiff contends that Defendants’ decades long
“campaign of deception” about the impact fossil fuels
have on climate change is causing lasting harm to Hoboken. Id. ¶ 222. This damage includes an increased
frequency of flooding in the city, which requires largescale and long-term remediation efforts; decreased
property values; and increased insurance and property costs for Plaintiff and its residents. Id. ¶¶ 22223. Hoboken has already been forced to expend hundreds of millions of dollars in remediation efforts after
damage caused by extreme rainfall events, including
Hurricane Irene and Superstorm Sandy. Id. ¶¶ 26984. Despite these efforts and further remediation
plans, designers acknowledge that a “fully comprehensive solution” is beyond Plaintiff’s means.
Id. ¶ 285. Plaintiff alleges that Defendants’ actions
are the proximate cause of Plaintiff’s need to invest in
its substantial, yet incomplete, remediation plans.
Id. ¶ 287.
Plaintiff filed its Complaint in New Jersey state
court, alleging the following claims: public nuisance
(Count One); private nuisance (Count Two); trespass
(Count Three); negligence (Count Four); and violation
of the New Jersey Consumer Fraud Act (Count Five).
D.E. 1-2. Plaintiff seeks compensation for costs related to damage from Superstorm Sandy and similar
events, as well as for Plaintiff’s abatement and remediation efforts. See, e.g., Compl. ¶ 306. Ultimately,
the crux of Hoboken’s Complaint is that Defendants
knew that their products caused substantial harm to
the environment. Yet, Defendants misled consumers
41a
for decades about the real risks of continued dependence on fossil fuels and continued to sell their products. Now, Hoboken wants help paying for the effects
of climate change it has faced and will continue to
face.
On October 9, 2020, Defendants Chevron Corp.
and Chevron U.S.A., Inc. removed the matter to this
Court.3 Defendants’ 168-page notice of removal
(“NOR”) states that removal is proper on multiple
grounds, including federal question, 28 U.S.C. § 1331;
jurisdiction under the Outer Continental Shelf Lands
Act (“OCSLA”), 43 U.S.C. § 1349(b); federal officer removal, 28 U.S.C. § 1442; and the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). D.E. 1. On
December 11, 2020, Plaintiff filed the instant motion
to remand. D.E. 94. After briefing was completed for
the motion to remand, Defendants filed their motion
to strike as to certain portions of Plaintiff’s reply brief.
D.E. 106.
II. STANDARD OF REVIEW
Pursuant to the federal removal statute, “any civil
action brought in a State court of which the district
courts of the United States have original jurisdiction,
may be removed . . . to the district court of the United
States for the district and division embracing the
place where such action is pending.” 28 U.S.C.
§ 1441(a). “[T]he party asserting federal jurisdiction
in a removal case bears the burden of showing, at all
stages of the litigation, that the case is properly before
the federal court.” Frederico v. Home Depot, 507 F.3d
188, 193 (3d Cir. 2007). A district court “must resolve
all contested issues of substantive fact in favor of the
3
All Defendants subsequently consented to the Chevron Defendants’ removal. D.E. 9, 10, 13, 14, 17.
42a
plaintiff and must resolve any uncertainties about the
current state of controlling substantive law in favor of
the plaintiff.” Boyer v. Snap-On Tools Corp., 913 F.2d
108, 111 (3d Cir. 1990). Removal statutes “are to be
strictly construed against removal and all doubts
should be resolved in favor of remand.” Batoff v. State
Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992) (quoting Steel Valle Auth. v. Union Switch & Signal Div.,
809 F.2d 1006, 1010 (3d Cir. 1987)); see also SamuelBassett v. Kia Motors Am., Inc., 357 F.3d 392, 396 (3d
Cir. 2004).
III. ANALYSIS
At the outset, Defendants asked this Court to reserve decision on the motion for remand until the Supreme Court resolved the question of whether there is
federal question jurisdiction in a number of factual
and procedurally similar cases. Defs. Opp. at 7. Although the Supreme Court has decided the other matters such that a stay is no longer appropriate, the
Court briefly addresses this issue because it provides
helpful context.
As noted, this case is one of many similar suits
brought by cities and states throughout the country to
address Defendants’ alleged disinformation campaign
regarding the effects of fossil fuels on global warming.
Eleven of these cases were recently pending before the
Supreme Court.4 In each, the respective plaintiff filed
4
The cases are BP P.L.C. v. Mayor & City Council of Balt., 141
S. Ct. 1532 (2021); Chevron v. County of San Mateo, --- S. Ct. ---,
2021 WL 2044534 (U.S. May 24, 2021) (consolidating six cases);
Shell Oil Prods. Co. v. Rhode Island, --- S. Ct. ---, 2021 WL
2044535 (U.S. May 24, 2021); and Suncor Energy (U.S.A.) Inc. v.
Bd. of Cty. Comm’rs of Boulder Cty., --- S. Ct. ---, 2021 WL
2044533 (U.S. May 24, 2021). In citing to the underlying
43a
suit in state court and the defendants removed the
matter on numerous grounds, including each of the
arguments advanced by Defendants here. In all but
two cases, the district court granted the plaintiff’s ensuing motion to remand. On initial appeal, the circuit
courts addressed their scope of review, determined
that they could only review whether there was federal-officer jurisdiction pursuant to 28 U.S.C. § 1442,
and concluded that removal was not proper under Section 1442. See, e.g., Rhode Island v. Shell Oil Prods.
Co., L.L.C. (Rhode Island II), 979 F.3d 50, 55 (1st Cir.
2020) (concluding that on appeal, the circuit’s “review
is cabined to the question of whether the district court
has jurisdiction over this case pursuant to federal officer removal”). Defendants subsequently petitioned
for writs of certiorari in each case, which were granted
by the Supreme Court.5
On May 17, 2021, the Supreme Court issued its
opinion in BP P.L.C. v. Mayor & City Council of Baltimore (Baltimore III), 141 S. Ct. 1532 (2021). The Supreme Court, however, did not consider the underlying merits of the removal or remand. Instead, it focused solely on the narrow issue of a court’s scope of
review when removal is premised on the federal officer removal statute or the civil rights removal statute, 28 U.S.C. § 1443. Id. at 1536. The Supreme
Court determined that when a matter is removed pursuant to Sections 1442 or 1443, an appellate court
decisions in each of these cases in this Opinion, this Court does
not reference the appellate history for each matter.
5
The Supreme Court denied the writ of certiorari in Chevron Corp. v. City of Oakland (consolidating two cases), No.
1089, on June 14, 2021. This matter sought review of the
Ninth Circuit’s decision reversing two district court decisions
denying motions to remand in similar cases.
44a
may review the entire remand order on appeal even if
the remand order addresses grounds for removal outside of Sections 1442 and 1443. Id. at 1537-38. Accordingly, the Supreme Court remanded each case
and directed the circuit courts to consider all of the
defendants’ grounds for removal, not just federal officer removal. See id. at 1543.
Because the Supreme Court only addressed this
limited procedural issue, Baltimore III does not guide
the Court’s analysis here. But since the Supreme
Court’s decision in Baltimore III, Defendants now insinuate that this Court should wait until the circuit
courts decide multiple issues of first impression upon
remand, as they might impact Defendants’ numerous
bases for federal jurisdiction in this matter. D.E. 115
at 2. Given the fact that Plaintiff filed its motion for
remand more than six months ago and this Court has
no indication of when any circuit may address these
issues on remand, the Court finds that it would not be
prudent to await a decision from the appellate courts.
Critically, no such matter is pending before the Third
Circuit.
Turning to the merits of the parties’ arguments,
“[f]ederal courts are not courts of general jurisdiction.”
Bender v. Williamsport Area Sch. Dist., 475 U.S. 534,
541-42 (1986). Rather, to adjudicate a case, a federal
district court must have subject matter jurisdiction
through “power authorized by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 552 (2005). Therefore, a district court must
presume that it lacks jurisdiction over a matter unless
jurisdiction is shown to be proper. Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377
(1994). As discussed, Defendants seek to remove this
matter on multiple grounds. The Court addresses
45a
each basis for removal below. Ultimately, none of Defendants’ grounds for removal are sufficient for this
Court to exercise subject-matter jurisdiction.
A. Federal Question
A court has federal question jurisdiction, pursuant to 28 U.S.C. § 1331, if the complaint “establishes
that federal law create[s] the cause of action or that
the plaintiff’s right to relief necessarily depends on
the resolution of a substantial question of federal
law.” ACR Energy Partners, LLC v. Polo N. Country
Club, Inc., 143 F. Supp. 3d 198, 202 (D.N.J. 2015). In
determining whether a complaint alleges a federal
question, courts are guided by the well-pleaded complaint rule. According to the rule, “a plaintiff is ordinarily entitled to remain in state court so long as its
complaint does not, on its face, affirmatively allege a
federal claim.” Concepcion v. CFG Health Sys. LLC,
No. 13-2081, 2013 WL 5952042, at *2 (D.N.J. Nov. 6,
2013). A defense based on federal law is insufficient
to convey jurisdiction under the well-pleaded complaint rule. N.J. Carpenters & Trs. Thereof v. Tishman Constr. Corp. of N.J., 760 F.3d 297, 302 (3d Cir.
2014). Plaintiff does not assert any federal claims
here; Hoboken only asserts state law claims. Thus, on
its face, the well-pleaded complaint rule is not satisfied.
There are, however, a few exceptions to the wellpleaded complaint rule.
1.
Complete Preemption
In the NOR, Defendants contend that Plaintiff’s
claims are completely preempted by the Clean Air Act,
46a
42 U.S.C. § 7401 et seq. NOR ¶ 168-71.6 There is a
“‘narrow exception’ to the well pleaded complaint rule
. . . where Congress ‘has expressed its intent to completely pre-empt a particular area of law such that
any claim that falls within this area is necessarily federal in character.’” Tishman Constr. Corp. of N.J., 760
F.3d at 302 (quoting In re U.S. Healthcare, Inc., 193
F.3d 151, 160 (3d Cir. 1999)). The complete preemption exception is narrow. Pascack Valley Hosp. v. Local 464A UFCW Welfare Reimbursement Plan, 388
F.3d 393, 399 (3d Cir. 2004). In fact, the Supreme
Court has only recognized the complete preemption
doctrine in three instances, none of which are applicable here. Tishman Constr. Corp. of N.J., 760 F.3d at
302. Moreover, “[i]f Congress intends a preemption
instruction completely to displace ordinarily applicable state law, and confer federal jurisdiction thereby,
it may be expected to make that atypical intention
clear.”
Empire HealthChoice Assurance, Inc. v.
McVeigh, 547 U.S. 677, 698 (2006).
Defendants do not identify any provision of the
Clean Air Act or other related document that evidences a congressional intent to displace state law
remedies that fall within the ambit of the Clean Air
Act. Defendants also fail to identify any means for a
litigant to assert a federal cause of action under the
Act. In addition, in the similar cases pending
throughout the country, no court has determined that
the claims are completely preempted by the Clean Air
6
Defendants rely on this basis for removal in the NOR but do
not address it in their opposition brief. Thus, it appears that Defendants abandoned this argument. However, because it informs
the Court’s decision with respect to Defendants’ arguments regarding the federal common law, as addressed next, the Court
briefly discusses the issue.
47a
Act. See, e.g., City of Oakland v. BP PLC, 969 F.3d
895, 907 (9th Cir. 2020) (explaining that the Clean Air
Act does not meet the requirements for complete
preemption); Rhode Island v. Chevron Corp. (Rhode
Island I), 393 F. Supp. 3d 142, 149-50 (D.R.I. 2019)
(concluding that the plaintiff’s claims were not completely preempted by the Clean Air Act). Accordingly,
complete preemption based on the Clean Air Act does
not confer subject-matter jurisdiction here.
2.
Federal Common Law and Ordinary Preemption
Defendants also contend that Plaintiff’s claims
necessarily arise under federal law “because they seek
to regulate transboundary and international emission
and pollution.” Defs. Opp. at 12; see also NOR at 5-6.
Defendants maintain that there are certain specialized areas, including interstate pollution, where there
is an overriding interest in having a uniform federal
rule. Defs. Opp. at 12-13. In short, Defendants argue
that their claims arise under the federal common law.
“The problem for Defendants is that there is nothing
in the artful-pleading doctrine that sanctions this particular transformation.” Rhode Island I, 393 F. Supp.
3d at 148.
In Illinois v. City of Milwaukee (Milwaukee I), 406
U.S. 91 (1972), the Supreme Court explained that
“where there is an overriding federal interest in the
need for a uniform rule of decision or where the controversy touches basic interests of federalism, we have
fashioned federal common law” Id. at 105 n.6. The
Court continued that addressing pollution in Lake
Michigan, as it is bounded by four states, is an area
that demands an application of federal law. Id. But
even assuming that this matter is ultimately governed by the federal common law, Milwaukee I does
48a
not provide Defendants with a basis for removal. Milwaukee I was filed in federal court pursuant to 28
U.S.C. § 1251(a)(1), which gives a district court original jurisdiction over controversies between two or
more states. Milwaukee I, 406 U.S. at 1388. Accordingly, Milwaukee I did not implicate the well-pleaded
complaint rule, nor did the Supreme Court address
any principals of preemption or jurisdiction.
In relying on the federal common law as a basis
for removal, Defendants are in essence raising the affirmative defense that the federal common law
preempts Plaintiff’s claims. This amounts to an argument for ordinary preemption. And ordinary preemption does not convert Plaintiff’s state law claims to a
federal case. See Caterpillar Inc. v. Williams, 482 U.S.
386, 392-93 (1987) (“Ordinarily federal pre-emption is
raised as a defense to the allegations in a plaintiff’s
complaint” and “it is now well settled law that a case
may not be removed to federal court on the basis of a
federal defense, including the defense of pre-emption”); see also Briones v. Bon Secours Health Sys., 69
F. App’x 530, 534 (3d Cir. 2003) (“Because of the general rule that the plaintiff is master of his claim,
where a well-pleaded state complaint contains only
claims based on state law that are not ‘completely
preempted,’ a federal court to which the case has been
removed must remand to the state court for a determination of the issues presented.”).
Defendants argue that National Farmers Union
Insurance Companies v. Crow Tribe of Indians, 471
U.S. 845 (1985), demonstrates that if a plaintiff’s
claims necessarily arise under the federal common
law, there is federal jurisdiction. Defs. Opp. at 15. In
National Farmers Union, however, the petitioners
filed their complaint in federal court, arguing that
49a
their claims arose under the federal common law.
Nat’l Farmers Union Ins. Cos., 471 U.S. at 848. Thus,
the case involved affirmative claims that appeared on
the face of the complaint. This is materially different
than the defense that Defendants assert here. National Farmers Union, therefore, does not support Defendants’ argument based on the federal common law.
In addition, Defendants’ argument regarding the
federal common law has been rejected by other courts.
For example, in Baltimore I, the court recognized that
the defendants’ argument that Baltimore’s claims
were governed by the federal common law because
they touched on climate change “is a cleverly veiled
preemption argument.” Mayor & City Council of Balt.
v. BP P.L.C. (Baltimore I), 388 F. Supp. 3d 538, 555
(D. Md. 2019). The court continued that “[u]nfortunately for defendants, ordinary preemption does not
allow the Court to treat the City’s public nuisance
claims as if it had been pleaded under federal law.”
Id. Similarly, in Rhode Island I, the court explained
that “complete preemption is different from ordinary
preemption, which is a defense and therefore does not
provide a basis for removal.” Rhode Island I, 393 F.
Supp. 3d at 148. The Rhode Island I court then determined that “environmental federal common law does
not—absent
congressional
say-so—completely
preempt the State’s public-nuisance claim, and therefore provides no basis for removal.” Id. at 149. In this
instance, outside of Defendants’ suggestion that this
Court take a wait-and-see approach with the cases
that were recently remanded by the Supreme Court,
Defendants do not attempt to explain why these other
courts were incorrect or why this case is different.
And this Court finds Rhode Island I, Baltimore I, and
the other similar cases persuasive.
50a
Defendants also argue that Plaintiff’s claims arise
under federal law because “they seek to regulate the
production and sale of oil and gas abroad and therefore, implicate the federal government’s foreign affairs power and the Constitution’s Foreign Commerce
Clause.” Defs. Opp. at 18. The Court disagrees.
Plaintiff seeks compensation to help it pay for damage
that has already occurred and for remediation efforts
to prevent further damage. Defendants have not
made any persuasive arguments to the contrary.
Finally, Defendants contend that this case should
be removed because Plaintiff is artfully pleading
around a federal claim. The Supreme Court has explained that at times, a federal court must “determine
whether the real nature of the claim is federal, regardless of plaintiff’s characterization.” Federated Dep’t
Stores, Inc. v. Moitie, 452 U.S. 394, 397 n.2 (1981).
Under the “artful pleading” doctrine, “a plaintiff may
not defeat removal by omitting to plead necessary federal questions.” Goepel v. Nat’l Postal Mail Handlers
Union, a Div. of Liuna, 36 F.3d 306, 310 (3d Cir.
1994).7 At the same time, as “master of its complaint,”
Hoboken is at liberty to raise or not raise federal
claims. Caterpillar, 482 U.S. at 398-99. Here, Hoboken chose to plead only state law claims against nondiverse parties. None of Hoboken’s claims are premised on federal law and Defendants do not contend
7
The Court notes that in Goepel, which is cited by Defendants,
the Third Circuit addressed the difference between complete and
ordinary preemption, explaining that only complete preemption
can convert a state law-based complaint into a federal case. As
discussed, the Circuit recognized that a federal defense amounts
to ordinary preemption and does not establish that the case is
removable to federal court. Goepel, 36 F.3d at 310. Thus, the
Circuit rejected the very argument Defendants make here.
51a
that Plaintiff omitted any facts to avoid federal jurisdiction. Although federal law may ultimately block
Plaintiff’s claims through ordinary preemption, this is
an affirmative defense rather than a necessary element of Plaintiff’s claims. Accordingly, as pled, Plaintiff’s Complaint is premised solely on state law.
City of New York v. Chevron Corporation (New
York), 993 F.3d 81 (2d Cir. 2021), does not change the
Court’s analysis.8 The plaintiff in New York filed its
complaint in federal court. As a result, the Second
Circuit was “free to consider the [Defendants’]
preemption defense on its own terms, not under the
heightened standard unique to the removability inquiry.” Id. at 94. In fact, the Second Circuit expressly
noted that because of this procedural difference, its
conclusion did not conflict with “the parade of recent
opinions holding that ‘state-law claims for public nuisance brought against fossil fuel producers do not
arise under federal law.’” Id. (quoting City of Oakland, 960 F.3d at 575) (internal brackets omitted).
New York merely suggests that Defendants may ultimately prevail with their federal preemption defense
argument, but this defense does not provide this
Court with subject-matter jurisdiction.
3.
Grable Jurisdiction9
A claim is also deemed to arise under federal law
for purposes of the well-pleaded complaint rule when,
although it finds its origins in state law, “the
8
After the motion to remand briefing was completed, Defendants filed a notice of supplemental authority informing the Court
of the Second Circuit’s decision in New York. D.E. 108.
9
Grable jurisdiction is sometimes referred to as Smith jurisdiction in light of Smith v. Kansas City Title & Trust Co., 255
U.S. 180 (1921).
52a
plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal law.” Empire Healthchoice Assurance Inc., 547 U.S. at 690.
This exception to the well-pleaded complaint rule only
applies to a “slim category” of cases that satisfy four
requirements: within a state law claim, a federal issue
is “(1) necessarily raised, (2) actually disputed,
(3) substantial, and (4) capable of resolution in federal
court without disrupting the federal-state balance approved by Congress.” Manning v. Merrill Lynch Pierce
Fenner & Smith, Inc., 772 F.3d 158, 163 (3d Cir. 2014)
(quoting Gunn v. Minton, 568 U.S. 251, 258 (2013)).
A federal issue is necessarily raised if “vindication
of a right under state law must necessarily turn on
some construction of federal law.” Id. (quoting Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 9 (1983)). In Grable & Sons Metal Products, Inc. v. Darue Engineering
& Manufacturing, for example, the IRS seized real
property to satisfy a federal tax delinquency and subsequently sold the property. 545 U.S. 308, 310 (2005).
Grable brought a quiet title action in state court five
years later, claiming that the purchaser’s record title
was invalid because the IRS failed to notify Grable of
the seizure in the specific manner required by 26
U.S.C. § 6335. Id. at 311. The Supreme Court determined that federal jurisdiction was appropriate because “[w]hether Grable was given notice within the
meaning of the federal statute is thus an essential element of its quiet title claim, and the meaning of the
federal statute is actually in dispute.” Id. at 315.
Defendants maintain that for its nuisance claims,
Hoboken is required to prove that Defendants’ conduct is unreasonable. This depends, according to Defendants, on an assessment of whether “the gravity of
53a
the harm outweighs the utility of the actor’s conduct’
or that ‘the harm caused by the conduct is serious.’”
NOR ¶ 140 (quoting Seven Plus One, LLC v. Sellers,
No. A-4688-14T2, 2016 WL 6994346, at *6 (N.J. Super. Ct. App. Div. Nov. 29, 2016)). Defendants go on
to explain that this analysis is akin to the analysis
Congress already performed when enacting a variety
of federal environmental statutes. Id. Thus, Defendants conclude, Plaintiff’s claims are “inherently federal in character.” Id. ¶ 141.
This general concern that federal law might be
implicated or may guide the Court’s analysis is materially different than a claim, like that in Grable, that
is dependent on the interpretation of federal law.
Critically, Defendants do not identify any provision of
federal law that would provide them a remedy or upon
which Plaintiff’s nuisance claims are predicated. “The
fact that federal law may be informative . . . or ‘shape
or even limit the remedy that Plaintiff may obtain’
does not mean that federal law is a necessary component of the cause of action.” MHA LLC v. HealthFirst,
Inc., 629 F. App’x 409, 413 (3d Cir. 2015) (internal
quotation omitted). As the district court explained in
San Mateo:
[E]ven if deciding that nuisance claims were to
involve a weighing of costs and benefits, and
even if the weighing were to implicate the defendants’ dual obligations under federal and
state law, that would not be enough to invoke
Grable jurisdiction. On the defendants’ theory, many (if not all) state tort claims that involve the balancing of interests and are
brought against federally regulated entities
would be removable. Grable does not sweep so
broadly.
54a
County of San Mateo v. Chevron Corp., 294 F. Supp.
3d 934, 989 (N.D. Cal. 2018).
In their opposition brief, Defendants argue that
Hoboken’s claims implicate affirmative federal constitutional elements imposed by the First Amendment,
which are not considered affirmative defenses. Defendants further contend that federal jurisdiction is
proper under Grable because the Court will be required to construe the First Amendment when considering Plaintiff’s claims. Defs. Opp. at 24-25. Defendants rely on cases that address the constitutional limits of common law defamation claims. See Phila.
Newspapers, Inc. v. Hepps, 475 U.S. 767, 774 (1986).
Each of the cases involve a federal constitutional defense to a state tort law. Critically, the federal court’s
jurisdiction in each of these cases did not appear to
turn on the existence of the constitutional defense.
See, e.g., Hustler Magazine, Inc. v. Falwell, 485 U.S.
46, 48 (1988) (explaining that the respondent originally filed a diversity action in district court); Hepps,
475 U.S. at 774 (reviewing state court claims that
were considered by the Pennsylvania Supreme Court).
The Court finds Defendants’ authority to be inapposite.
Finally, Defendants cite Ortiz v. University of
Medicine & Dentistry of New Jersey, No. 08-2669,
2009 WL 737046 (D.N.J. Mar. 18, 2009), for the proposition that when a court is required to construe the
United States Constitution, the claim necessarily
raises a federal issue under Grable. Defs. Opp. at 25.
The Court disagrees; the implications of Ortiz are not
nearly as broad as Defendants represent. In Ortiz,
Judge Linares adopted Magistrate Judge Falk’s conclusion that Grable jurisdiction existed because the
plaintiff’s state law wrongful termination and
55a
employment discrimination claims were dependent on
federal law. But in Ortiz, the plaintiff alleged that she
was terminated in retaliation for exercising her right
to free speech, in violation of the First and Fourteenth
Amendments. 2009 WL 737046, at *5. Thus, the
plaintiff’s “state cause of action require[d] proof of violation of federal law as an essential element to recovery.” Id. at *7. Nothing in Ortiz stands for the broad
proposition that any constitutional issue, no matter
how it is raised, is sufficient to invoke federal jurisdiction. And as explained above, Hoboken’s claims do not
turn on federal law.
Every court that has considered Defendants’ Grable argument thus far has rejected Defendants’ position. See Massachusetts v. Exxon Mobil Corp., 462 F.
Supp. 3d 31, 45 (D. Mass. 2020) (collecting cases). Defendants do not challenge any of these decisions, and
this Court finds these decisions persuasive. Seeing no
clear reason to deviate from the clear weight of authority, this Court also concludes that Grable jurisdiction does not exist. As a result, Defendants fails to
establish that there is federal question jurisdiction in
this matter as authorized by 28 U.S.C. § 1331.
B. Outer Continental Shelf Lands Act
Removal
Defendants also contend that this Court has original jurisdiction pursuant to the OCSLA, 43 U.S.C.
§ 1349(b). NOR ¶¶ 31-41. Specifically, Defendants
maintain that Plaintiff’s claims encompass Defendants’ activities on the Outer Continental Shelf
(“OCS”), and therefore, fall into the “broad jurisdictional grant of Section 1349.”10 Id. ¶ 31. The OCSLA
10
The Continental Shelf “is a vast underwater expanse that begins a few miles from the U.S. coast, where states’ jurisdiction
56a
“extends federal law to the subsoil and seabed of the
Outer Continental Shelf and all attachments
thereon.” Parker Drilling Mgmt. Servs., Ltd. v. Newton, 139 S. Ct. 1881, 1886 (2019). Thus, pursuant to
the OCSLA, the federal government has exclusive jurisdiction over the OCS. Id. at 1887.
When considering jurisdiction under the
OCSLA, courts analyze (1) whether the conduct
“that caused the injury constituted an operation conducted on the outer Continental Shelf that involved
the exploration and production of minerals,” and
(2) if the case “arises out of, or in connection with the
operation.” In re Deepwater Horizon, 745 F.3d 157,
163 (5th Cir. 2014); see also Various Pls. v. Various
Defs. (Oil Field Cases), 673 F. Supp. 2d 358, 370
(E.D. Pa. 2009) (looking to the Fifth Circuit for guidance on OCSLA jurisdiction because there is no
Third Circuit precedent on the issue). In addition,
Section 1349 requires a “but-for” connection between
the claims and the OCS operation. Id.
Defendants argue that the “but-for” requirement
is too narrow. Specifically, Defendants maintain
that such causation is sufficient but not necessary
under the OCSLA. Instead, Defendants point to the
statutory text of Section 1349(b), which only requires
a “connection.” Defs. Opp. at 29-30. In support, Defendants rely on EP Operating Ltd. Partnership v.
Placid Oil Co., 26 F.3d 563 (5th Cir. 1994), which concluded that a suit that “would affect the efficient exploitation of resources from the OCS” was within the
ends, and extends roughly two hundred miles into the ocean to
the seaward limit of the international-law jurisdiction of the
United States.” Baltimore II, 952 F.3d at 465 n.8 (internal quotations omitted).
57a
jurisdictional grant of Section 1349. Id. at 570. Defendants maintain that EP Operating establishes
that jurisdiction exists “where the plaintiff’s claims
are connected to OSCLA operations in the sense that
they threaten to ‘impair’ the ‘recovery’ of minerals
from the OCS.” Defs. Opp. at 30. In EP Operating,
however, the Fifth Circuit did not consider the parameters of a causal connection under the Act. Instead, the Circuit was addressing the definition of
“operation.” EP Operating Ltd., 26 F.3d at 570. Accordingly, EP Operating does not support Defendants’
argument. Because Defendants provide no other authority to deviate from the but-for requirement, the
Court applies the but-for test.
Turning to the merits of Defendants’ OCLSA jurisdictional argument, Defendants contend that
OCSLA jurisdiction exists because certain Defendants
participated in the OCS leasing program. NOR ¶¶ 3637. Because of Defendants’ allegedly deceptive promotion of oil and gas, Defendants were able to increase production and some of this increased production originated from the OCS. Defendants continue
that Hoboken’s claims and damages, therefore, arise
from these OCS operations. This chain of causation is
too attenuated. Although it is more than plausible
that fossil fuels originating from the OCS led to the
effects of global warming that Hoboken is now facing,
this does not amount to but-for causation. As explained by the Court in San Mateo, “even if some of
the activities that caused the alleged injuries
stemmed from operations on the [OCS], the defendants have not shown that the plaintiffs’ causes of action would not have accrued but for the defendants’
activities on the shelf.” San Mateo, 294 F. Supp. 3d at
939; see also Baltimore I, 388 F. Supp. 3d at 566 (concluding that OCSLA jurisdiction does not exist
58a
because the City’s claims are based on a broad array
of conduct and the defendants failed to establish that
the claims “would not have occurred but for defendants’ extraction activities on the OCS”). Consequently,
the OCSLA does not confer subject-matter jurisdiction.
C. Federal Officer Removal
Defendants also removed this matter on the basis
of the federal officer removal statute, 28 U.S.C.
§ 1442(a). “The ‘central aim’ of the federal officer removal statute ‘is to protect officers of the federal government from interference by litigation in state court
while those officers are trying to carry out their duties.” Golden v. N.J. Inst. of Tech., 934 F.3d 302, 309
(3d Cir. 2019) (quoting Papp v. Fore-Kast Sales Co.,
Inc., 842 F.3d 805, 811 (3d Cir. 2016)) (internal punctuation omitted). For a court to exercise its jurisdiction under Section 1442(a)(1), it must be satisfied that
each of the following four requirements are met:
(1) the defendant is a person within the meaning of the statute; (2) the plaintiff’s claims are
based upon the defendant’s conduct arising
under the United States, its agencies, or its officers; (3) the plaintiff’s claims against the defendant are for, or relating to an act under
color of federal office; and (4) the defendant
raises a colorable federal defense to the plaintiff’s claim.
Id. (quoting Papp, 842 F .3d at 812) (internal quotation marks omitted).11
11
Section 1442 provides as follows:
(a) A civil action or criminal prosecution that is commenced in a State court and that is against or directed to
59a
Defendants’ argument turns on the second and
third requirements. The second requirement “is liberally construed to cover actions that involve an effort
to assist, or to help carry out, the federal supervisor’s
duties or tasks.” Id. In this instance, Defendants
maintain that at a minimum, the Chevron parties
“performed critical and necessary functions for the
U.S. military in furtherance of national defense policy
and have acted pursuant to government mandates,
leases, and contracts under which they assisted the
federal government in achieving federal policy goals,
all under federal direction, oversight, and control.”
NOR ¶ 42. Specifically, Defendants maintain that
they acted under a federal officer because the government exerted extensive guidance and control over
their fossil fuel production. Id. ¶ 44. To meet the
third requirement, “it is sufficient for there be a ‘connection’ or ‘association’ between the act in question
and the federal officer.” Golden, 934 F.3d at 310 (quoting In re Commonwealth’s Motion to Appoint Counsel
Against or Directed to Def. Ass’n of Phila., 790 F.3d
457, 468 (3d Cir. 2015)). To support their argument,
Defendants provide a historical treatise about the
United States’ need for fossil fuels for national
any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) The United States or any agency thereof or any
officer (or any person acting under that officer) of the
United States or of any agency thereof, in an official
or individual capacity, for or relating to any act under
color of such office or on account of any right, title or
authority claimed under any Act of Congress for the
apprehension or punishment of criminals or the collection of the revenue.
28 U.S.C. § 1442(a)(1).
60a
security purposes during the twentieth century and
explain that Defendants’ oil and gas production was
in part connected to these national security concerns.
Id. ¶¶ 48-133. While informative, the historical narrative is not relevant. Hoboken’s Complaint is focused
on Defendants’ decades long misinformation campaign that was utilized to boost Defendants’ sales to
consumers. Defendants do not claim that any federal
officer directed them to engage in the alleged misinformation campaign.
Turning to the specifics of Defendants’ federal officer removal argument. Defendants rely on their involvement with the OCS leasing program; a petroleum reserve at Elk Hills, California; and specialized
government contracts and work related to national defense. OCS leases are administered by the Department of Interior, and Defendants maintain that in
2009, “oil produced from the OCS accounted for 30%
of all domestic production.” NOR ¶¶ 65-67. With respect to Elk Hills, Defendants’ argument stems from
Chevron’s predecessor’s involvement with a petroleum reserve in California that is owned by the federal
government, from 1976 to 1998. Id. ¶ 83-103. Each
circuit that has considered whether Defendants’ involvement with the OCS leases and the Elk Hills reserve is sufficient to satisfy the federal officer removal
statute has found that it is not. The Fourth Circuit
explained that “[a]ny connection between the fossil
fuel production of the OCS and the conduct alleged in
the Complaint is simply too remote” to satisfy the
third prong. Mayor & City Counsel of Balt. v. BP
P.L.C. (Baltimore II), 952 F.3d 452, 466 (4th Cir.
2020). The Fourth Circuit further explained that although Baltimore’s complaint references the defendants’ production, these allegations “only serve to tell a
broader story” about how Defendants’ fossil fuels
61a
contributed to greenhouse gas pollution. Id. at 467.
But “it is the concealment and misrepresentation of
the products’ known dangers—and simultaneous promotion of their unrestrained use—that allegedly
drove consumption, and thus greenhouse gas pollution, and thus climate change.” Id. The Fourth Circuit reached the same conclusion with respect to Elk
Hills. Id. at 468-69. The First Circuit similarly explained that:
[a]t first glance, these agreements may have
the flavor of federal officer involvement in the
oil companies’ business, but that mirage only
lasts until one remembers what Rhode Island
is alleging in its lawsuit. Rhode Island is alleging the oil companies produced and sold oil
and gas products in Rhode Island that were
damaging the environment and engaged in a
misinformation campaign about the harmful
effects of their products on the earth’s climate.
The contracts the oil companies invoke as the
hook for federal-officer jurisdiction mandate
none of those activities.
Rhode Island II, 979 F.3d at 59-60. The Court sees no
reason to depart from the persuasive reasoning of the
First and Fourth Circuits. As discussed, Plaintiff is
not focused on the specialized and limited production
efforts on the OCS and at Elk Hills, or, for that matter, Defendants’ overall production efforts. Instead,
Plaintiffs point to Defendants’ misinformation campaign. Accordingly, the Court concludes that Defendants’ conduct relating to OCS and Elk Hills does not
serve as a jurisdictional hook.
The same is true for Defendants’ contention that
their role in providing the United States’ military with
specialized fuel, and for the storage and transport of
62a
fuel for national emergencies, are sufficient bases to
convey federal jurisdiction. NOR ¶¶ 104, 107-30. As
recognized by Defendants themselves, fuel produced
through these military contracts at the present day is
“highly specialized” so that it can be used on planes,
ships and other vehicles and satisfy other national defense requirements. Id. ¶¶ 120. This specialized fuel
does not appear to be the same as fuel that consumers
purchased because of Defendants’ alleged marketing
and disinformation campaigns. Finally, Hoboken’s
Complaint does not touch on the storage or transport
of fossil fuels. Consequently, this conduct does not relate to Plaintiff’s claims.
With respect to the federal officer removal statute, Defendants’ basis for removal and arguments in
their opposition brief are largely the same as those
presented to each circuit court that has considered
federal officer removal in the related cases. Four circuits have concluded that Defendants could not remove based on the federal officer removal statute. Defendants, however, provide new information in this
matter that they contend should change the analysis.
For example, with respect to Elk Hills, Defendants
provide new factual support demonstrating that the
Navy hired Standard Oil, Chevron’s predecessor, to
operate the field on its behalf for thirty-one years.
NOR ¶ 95. Defendants also provide new information
about the government’s control of the oil and gas industry during World War II. Id. ¶¶ 48-60. But again,
Plaintiff’s claims focus on Defendants’ alleged misinformation campaign, not their production of oil and
gas. Moreover, Defendants’ new information addresses conduct that predates Plaintiff’s allegations.
Thus, this new information likely would not change
any of the prior circuit analyses. In fact, the District
of Hawai’i recently determined that Defendants’ new
63a
information did not alter the analysis and concluded
that there was not federal officer removal. See City &
Cnty. of Honolulu v. Sunoco LP, No. 20-163, 2021 WL
531237, at *4-5 (D. Haw. Feb. 12, 2021) (“The Court is
unconvinced that any of the supposedly additional or
new arguments presented here alter the Ninth Circuit’s holding that the leases do not give rise to an unusually close relationship with the federal government for purposes of Section 1442(a)(1).”). And critically, this information does not alter this Court’s conclusion in this matter. Defendants, therefore, cannot
remove this matter pursuant to the federal officer removal statute.
D. Federal Enclave Removal
Next, Defendants seek to remove this matter on
the basis of federal enclave jurisdiction. NOR ¶¶ 17882. “A federal enclave is an area over which the federal government has assumed exclusive legislative jurisdiction through the application of Art. I, Section 8
of the U.S. Constitution.” Jones v. John Crane-Houdaille, Inc., No. 11-2374, 2012 WL 1197391, at *1 (D.
Md. Apr. 6, 2012). “A suit based on events occurring
in a federal enclave, where state law has been federalized, therefore must necessarily arise under federal
law and implicates federal question jurisdiction under
§ 1331.” Id. The “key factor” in deciding whether federal enclave jurisdiction exists is the location of the
injury. Sparling v. Doyle, No. 13-323, 2014 WL
2448926, at *3 (W.D. Tex. May 30, 2014); see also
Board of Cnty. Comm’rs of Boulder Cnty. v. Suncor
Energy (U.S.A.) Inc., 405 F. Supp. 3d 947, 974 (D.
Colo. 2019) (quoting Ramos v. C. Ortiz Corp., No. 15980, 2016 WL 10571684, at *3 (D.N.M. May 20, 2016))
(“The location where Plaintiff was injured determines
whether the right to removal exists” under federal
64a
enclave jurisdiction.”); Baltimore I, 388 F. Supp. 3d at
565 (explaining that “courts have only found that
claims arise on federal enclaves, and thus fall within
federal question jurisdiction, when all or most of the
pertinent events occurred there”); Bordetsky v. Akima
Logistics Servs., LLC, No. 14-1786, 2016 WL 614408,
at *2 (D.N.J. Feb. 16, 2016) (“When dealing with a federal enclave, the focus is on where the tort occurred.”).
Defendants contend that the Complaint relies
upon conduct that occurred in the District of Columbia
and that some of the fossil fuel produced by Defendants came from federal enclaves. NOR ¶¶ 178-82. In
a footnote, Defendants add that because Plaintiff’s injuries arise from all global warming, Plaintiff is necessarily complaining about emissions from jet fuel on
United States military bases. Defs. Opp. at 53 n.10.
Again, the Court disagrees. The focus of Hoboken’s
claims is on harm that occurred in Hoboken rather
than in a federal enclave. This argument, therefore,
is rejected.
E. Class Action Fairness Act Jurisdiction
Finally, Defendants maintain that this matter is
removable under the CAFA. NOR ¶¶ 183-95. The
CAFA provides federal courts with diversity jurisdiction over class actions when (1) the amount in controversy exceeds $5 million; (2) there are minimally diverse parties; and (3) the class consists of 100 or more
members. Gallagher v. Johnson & Johnson Consumer
Cos., 169 F. Supp. 3d 598, 601-02 (D.N.J. Mar. 14,
2016) (citing Standard Fire Ins. Co. v. Knowles, 568
U.S. 588, 592 (2013)). A class action is defined as “any
civil action filed under rule 23 of the Federal Rules of
Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought
by 1 or more representative persons as a class action.”
65a
28 U.S.C. § 1332(d)(1)(B). This argument can be dealt
with in short order because Plaintiff is not bringing
this matter under Rule 23 or any similar state law.
Defendants provide no information suggesting otherwise. Consequently, the Court concludes that CAFA
jurisdiction does not exist.
In sum, none of Defendants’ bases for federal jurisdiction are sound. Accordingly, this matter will be
remanded to state court.
IV. MOTION TO STRIKE
Defendants seek to strike portions of Plaintiff’s
reply brief, specifically, Plaintiff’s new argument for
costs pursuant to 28 U.S.C. § 1447(c) and collateral
estoppel, because they were raised for the first time
in Plaintiff’s reply brief. Defs. Strike Br. at 2-4. Defendants do not set forth the legal basis for their requested relief. While Federal Rule of Civil Procedure
12(f) allows a court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter,” Fed R. Civ. P. 12(f),
Defendants seek to strike arguments in a brief.
“[M]otions, affidavits, briefs, and other documents
outside of the pleadings are not subject to Rule 12(f).”
5C Charles Alan Wright & Arthur Miller, Federal
Practice & Procedure § 1380 (3d ed. 2016). Defendants’ motion, therefore, is denied as procedurally improper.
Defendants, however, correctly argue that this
Court typically does not consider new arguments in
a reply brief. See Cobra Enters., LLC v. All Phase
Servs., Inc., No. 20-4750, 2020 WL 2849892, at *1
(D.N.J. June 1, 2020) (“As a matter of procedure, this
Court will not accept arguments offered for the first
time in the reply brief, as they were not properly
66a
asserted in the opening brief and Plaintiffs have not
had the opportunity to respond to them.”). Here,
Plaintiff concedes that it had a basis to seek statutory costs under 28 U.S.C. § 1447(c) when filing its
motion to remand but “refrained . . . from seeking
that relief in its opening brief.” Plf. Strike Opp. at
1. The same is true for Hoboken’s collateral estoppel
argument, which is based on the fact that numerous
courts already rejected Defendants’ arguments regarding federal jurisdiction before Defendants filed
their opposition brief. Thus, while the Court will not
strike these arguments from Hoboken’s reply brief,
the Court did not consider them in deciding the motion for remand.
V. CONCLUSION
For the reasons stated above, Plaintiff’s motion to
remand, D.E. 94, is GRANTED. This action is remanded to the New Jersey Superior Court, Law Division, Hudson County. In addition, Defendants’ motion to strike, D.E. 106, is DENIED. An appropriate
Order accompanies this Opinion.
Dated: September 8, 2021
/s/ John Michael Vazquez
John Michael Vazquez, U.S.D.J.
67a
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
STATE OF DELAWARE,
ex rel.
KATHLEEN JENNINGS
Attorney General of the
State of Delaware,
Plaintiff,
v.
BP AMERICA INC., BP
P .L.C., CHEVRON CORPORATION,
CHEVRON U.S.A. INC.,
CONOCOPHILLIPS,
CONOCOPHILLIPS
COMPANY, PHILLIPS
66, PHILLIPS 66 COMPANY, EXXON MOBIL
CORPORATION, XTO
ENERGY INC., HESS
CORPORATION, MARATHON OIL CORPORATION, MARATHON OIL
COMPANY, MARATHON PETROLEUM
COMPANY LP, SPEEDWAY LLC, MURPHY
OIL CORPORATION,
MURPHY USA INC.,
ROYAL DUTCH SHELL
C.A. No 20-1429-LPS
Jan. 5, 2022
68a
PLC, SHELL OIL COMP
ANY, CITGO PETROLEUM CORPORATION,
TOTAL S.A., TOTALENERGIES MARKETING USA, INC., OCCIDENTAL PETROLEUM CORPORATION,
DEVON ENERGY CORPORATION, APACHE
CORPORATION, CNX
RESOURCES CORPORATION, CONSOL ENERGY INC., OVINTIV,
INC., and AMERICAN
PETROLEUM INSTITUTE,
Defendants.
Christian Douglas Wright, Jameson A.L. Tweedie,
and Ralph K. Durstein III, DELAWARE DEPARTMENT OF JUSTICE, Wilmington, DE
Victor M. Sher and Matthew K. Edling, SHER
EDLING LLP, San Francisco, CA
Attorneys for Plaintiff
David E. Wilks and R. Stokes Nolte, WILKS LAW,
LLC, Wilmington, DE
Theodore J. Boutrous, Jr. and William E. Thomson,
GIBSON, DUNN & CRUTCHER LLP, Los Angeles,
CA
Andrea E. Neuman, GIBSON, DUNN & CRUTCHER
LLP, New York, NY
69a
Thomas G. Hungar, GIBSON, DUNN & CRUTCHER
LLP, Washington, DC
Joshua D. Dick, GIBSON, DUNN & CRUTCHER
LLP, San Francisco, CA
Attorneys for Defendants Chevron Corporation
and Chevron U.S.A. Inc.
Steven L. Caponi and Matthew B. Goeller, K&L
GATES LLP, Wilmington, DE
David C. Frederick, Grace W. Knofczynski, and Daniel S. Severson, KELLOGG, HANSEN, TODD, FIGEL
& FREDERICK, P.L.L.C., Washington, DC
Attorneys for Defendants Royal Dutch Shell plc
and Shell Oil Company
Catherine A. Gaul, ASHBY & GEDDES, Wilmington,
DE
Nancy G. Milburn and Diana E. Reiter, ARNOLD &
PORTER KAYE SCHOLER LLP, New York, NY
Jonathan W. Hughes, ARNOLD & PORTER KAYE
SCHOLER LLP, San Francisco, CA
Matthew T. Heartney and John D. Lombardo, ARNOLD & PORTER KAYE SCHOLER LLP, Los Angeles, CA
Attorneys for Defendants BP America Inc. and
BP p.l.c.
Kenneth J. Nachbar and Alexandra M. Cumings,
MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE
Nathan P. Eimer, Pamela R. Hanebutt, and Lisa S.
Meyer, EIMER STAHL LLP, Chicago, IL
Robert E. Dunn, EIMER STAHL LLP, San Jose, CA
Attorneys for Defendant CITGO Petroleum
Corporation
70a
Jeffrey L. Moyer and Christine D. Haynes, RICHARDS, LAYTON & FINGER, P.A., Wilmington, DE
Kevin Orsini and Vanessa A. Lavely, CRAVATH,
SWAINE & MOORE LLP, New York, NY
Attorneys for Defendant Occidental Petroleum
Corporation
Colleen D. Shields and Patrick M. Brannigan, ECKERT SEAMANS CHERIN & MELLOTT, LLC, Wilmington, DE
Tristan L. Duncan, Daniel B. Rogers, and William F.
Northrip, SHOOK, HARDY & BACON L.L.P.
Attorneys for Defendant Murphy USA Inc.
Antoinette D. Hubbard and Stephanie A. Fox,
MARON MARVEL BRADLEY ANDERSON &
TARDY LLC, Wilmington, DE
Shannon S. Broome and Ann Marie Mortimer,
HUNTON ANDREWS KURTH LLP, San Francisco,
CA
Shawn Patrick Regan, HUNTON ANDREWS
KURTH LLP, New York, NY
Attorneys for Defendants Marathon Petroleum
Corporation, Marathon Petroleum Company
LP, and Speedway LLC
Kevin J. Mangan, Kristen H. Cramer, and Nicholas T.
Verna, WOMBLE BOND DICKINSON (US) LLP,
Wilmington, DE
Andrew G. McBride, MCGUIREWOODS LLP, Washington, DC
Attorneys for Defendant American Petroleum
Institute
Christian J. Singewald, WHITE AND WILLIAMS
LLP, Wilmington, DE
71a
Joy C. Fuhr, Brian D. Schmalzbach, and W. Cole
Geddy, MCGUIREWOODS LLP, Richmond, VA
Attorneys for Defendant Devon Energy Corporation
Mackenzie M. Wrobel, DUANE MORRIS LLP, Wilmington, DE
Michael F. Healy, SHOOK HARDY & BACON LLP,
San Francisco, CA
Michael L. Fox, DUANE MORRIS LLP, San Francisco, CA
Attorneys for Defendant Ovintiv Inc.
Paul D. Brown, CHIPMAN BROWN CICERO &
COLE, LLP, Wilmington, DE
Kathleen Taylor Sooy and Tracy A. Roman, CROWELL & MORING LLP, Washington, DC
Honor R. Costello, CROWELL & MORING LLP, New
York, NY
Attorneys for Defendants CNX Resources Corp.
and CONSOL Energy Inc.
Michael P. Kelly, Daniel J. Brown, and Alexandra M.
Joyce, MCCARTER & ENGLISH LLP, Wilmington,
DE
Steven M. Bauer and Margaret A. Tough, LATHAM
& WATKINS LLP, San Francisco, CA
Jameson R. Jones, and Daniel R. Brody, BARTLIT
BECK LLP, Denver, CO
Attorneys for Defendants ConocoPhillips and
ConocoPhillips Company
Daniel A. Mason and Matthew D. Stachel, PAUL,
WEISS, RIFKIND, WHARTON & GARRISON LLP,
Wilmington, DE
72a
Yahonnes Cleary and Caitlin E. Grusauskas, PAUL,
WEISS, RIFKIND, WHARTON & GARRISON LLP,
New York, NY
Attorneys for Defendants Exxon Mobil Corporation, ExxonMobil Oil Corporation, and XTO
Energy Inc.
Michael P. Kelly, Daniel J. Brown, and Alexandra M.
Joyce, MCCARTER & ENGLISH LLP, Wilmington,
DE
Steven M. Bauer and Margaret A. Tough, LATHAM
& WATKINS LLP, San Francisco, CA
Attorneys for Defendants Phillips 66 and Phillips 66 Company
Robert W. Whetzel, RICHARDS LAYTON & FINGER, P.A., Wilmington, DE
Patrick W. Mizell, Matthew R. Stamme, Stephanie L.
Noble, and Brooke A. Noble, VINSON & ELKINS
L.L.P., Houston, TX
Mortimer H. Hartwell, VINSON & ELKINS L.L.P.,
San Francisco, CA
Attorneys for Defendant Apache Corporation
Michael A. Barlow, ABRAMS & BAYLISS LLP, Wilmington, DE
Robert P. Reznick, ORRICK, HERRINGTON & SUTCLIFFE LLP, Washington, DC
James Stengel and Marc R. Shapiro, ORRICK, HERRINGTON & SUTCLIFFE LLP, New York, NY
Catherine Y. Lui, ORRICK, HERRINGTON & SUTCLIFFE LLP, San Francisco, CA
Attorneys for Defendant Marathon Oil Corporation
73a
Joseph J. Bellew, WHITE AND WILLIAMS LLP, Wilmington, DE
J. Scott Janoe, BAKER BOTTS L.L.P., Houston, TX
Megan Berge, BAKER BOTTS L.L.P., Washington,
DC
Attorneys for Defendant Hess Corporation
Joseph J. Bellew, WHITE AND WILLIAMS LLP, Wilmington, DE
J. Scott Janoe, BAKER BOTTS L.L.P., Houston, TX
Megan Berge, BAKER BOTTS L.L.P., Washington,
DC
Attorneys for Defendant Murphy Oil Corporation
Robert W. Whetzel and Blake Rohrbacher, RICHARDS LAYTON & FINGER, P.A., Wilmington, DE
Anna Rotman, KIRKLAND & ELLIS LLP, Houston,
TX
Attorneys for Defendants Total S.A. and TotalEnergies Marketing USA, Inc.
74a
MEMORANDUM OPINION
STARK, U.S. District Judge:
Pending before the Court is the State of Delaware’s (“Delaware” or “Plaintiff’) motion to remand,
filed pursuant to 28 U.S.C. § 1447(c). (D.I. 86) The
Court has reviewed the complaint (D.I. 1-1), the notice
of removal (D.I. 1), and the parties’ briefs, exhibits,
declarations, and notices of supplemental authority
(see, e.g., D.I. 89, 96-99, 101, 104, 107, 108, 113, 119).
The Court also heard argument via teleconference on
May 19, 2021. (D.I. 111) (“Tr.”) For the reasons set
forth below, the Court will grant Plaintiff’s motion.1
I.
BACKGROUND
On September 10, 2020, Plaintiff filed suit in the
Delaware Superior Court against numerous major
1
In their initial briefing, Defendants suggested that cases
then pending before the U.S. Supreme Court might address issues relating to federal jurisdiction and the same type of claims
asserted here. (See D.I. 96 at 6-7) Defendants did not formally
request a stay, although they observed that “awaiting guidance
from the Supreme Court on the issues raised in Plaintiffs Motion
may further the interests of judicial economy and efficiency.”
(D.I. 96 at 7) Thereafter, on May 17, 2021, the Supreme Court
issued its ruling in BP P.L.C. v. Mayor of Baltimore, 141 S. Ct.
1532 (2021) (“Baltimore III”). The Baltimore III decision, however, only addresses the scope of appellate review and does not
reach the merits of any dispute over federal jurisdiction. During
oral argument in the instant case, Defendants suggested that the
Court delay its decision until after the Supreme Court rendered
its ruling on the petition for a writ of certiorari in the appeal from
the Ninth Circuit’s decision in City of Oakland v. BP P.L.C., 960
F.3d 570 (9th Cir. 2020), modified by 969 F.3d 895. (See Tr. at
88-89) The Supreme Court subsequently denied that petition on
June 14, 2021. See Chevron Corp. v. City of Oakland, 141 S. Ct.
2776 (2021). No party has suggested there is any reason for further delay in resolving Plaintiffs motion.
75a
corporations having operations in the fossil fuel industry (collectively, “Defendants”). Plaintiff’s complaint
asserts solely state-law claims, specifically for:
(1) negligent failure to warn, (2) trespass, (3) nuisance, and (4) violations of the Delaware Consumer
Fraud Act.2 (D.I. 1-1 ¶¶ 234-80) Plaintiff’s claims are
based on an alleged disinformation campaign undertaken by Defendants, purportedly to mislead the public and consumers by misrepresenting the devastating
impacts of climate change and its link to fossil fuels—
ultimately leading to disastrous climate impacts on
the State of Delaware, as the result of increased
2
The negligent failure to warn, trespass, and nuisance claims
are brought against the “Fossil Fuel Defendants,” which includes
the BP entities (BP P.L.C. and BP America Inc.), the Chevron
entities (Chevron Corporation and Chevron USA, Inc.), the ConocoPhillips entities (ConocoPhillips, ConocoPhillips Company,
Phillips 66, and Phillips 66 Company), the Exxon entities (Exxon
Mobil Corporation, ExxonMobil Oil Corporation, XTO Energy
Inc.), Hess Corporation, the Marathon entities (Marathon Oil
Corporation, Marathon Oil Company, Marathon Petroleum Corporation, Marathon Petroleum Company LP, and Speedway
LLC), the Murphy Oil entities (Murphy Oil Corporation and
Murphy USA, Inc.), the Shell entities (Royal Dutch Shell PLC
and Shell Oil Company), Citgo Petroleum Corporation, the Total
entities (Total S.A. and TotalEnergies Marketing USA, Inc.), Occidental Petroleum Corporation, Devon Energy Corporation,
Apache Corporation, the CONSOL entities (CNX Resources Corporation and CONSOL Energy Inc.), and Ovintiv, Inc. (See D.I.
1-1 ¶ 36) The claim for violation of the Delaware Consumer
Fraud Act (“CFA”) is brought against Defendant American Petroleum Institute and some, but not all, of the Fossil Fuel Defendants (including the BP entities, the Chevron entities, the
Exxon entities, Hess Corporation, the Shell entities, Citgo Petroleum Corporation, CNX Resources Corporation, and the Marathon entities) (this subgroup of Defendants hereinafter referred
to as the “CFA Defendants”). (See id. ¶ 265)
76a
extraction, production, and consumption of fossil
fuels. (See id. ¶¶ 1-12)3
According to Plaintiff, Defendants have known for
more than 50 years that their fossil fuel products create greenhouse gas pollution having significant adverse impacts on the climate and sea levels. (See id.
¶¶ 1, 7, 62-103) Instead of disclosing the known
harms associated with their products, Defendants embarked on a campaign of denial and disinformation
about the existence, cause, and adverse effects of
global warming, which was designed to protect and
expand the consumption of their fossil fuel products.
(See id. ¶¶ 104-60) As the scientific consensus about
the causes and consequences of climate change has
strengthened, Defendants continued to mislead the
public by advertising that certain fossil fuel products
are “green” or “clean,” and falsely portraying themselves as environmentally conscious companies that
invest heavily in renewable energy sources. (See id.
¶¶ 161-210)
Plaintiff alleges it has suffered, and will foreseeably continue to suffer, damages from the climate impacts purportedly caused by Defendants’ disinformation campaign, including accelerating sea level
rise, increased extreme weather events, ocean acidification, and elevated average air temperature. (See id.
¶¶ 226-30) Plaintiff further contends it has incurred,
3
The Court understands Plaintiff’s theory to be, in part, that
Defendants’ misrepresentations and deception caused increased
consumption of fossil fuels all around the world, leading to injurious environmental impacts in Delaware, impacts for which
Plaintiff seeks to recover damages (among other potential relief).
(See D.I. 1-1 ¶¶ 7-11; see also Tr. at 93 (“[T]he only source of liability is the misrepresentation . . . and the damages are restricted to the impact in Delaware.”))
77a
and will continue to incur, expenses to preemptively
mitigate the injuries caused by Defendants’ misconduct. (See id. ¶ 231) Plaintiff seeks compensatory
damages, penalties under the Delaware Consumer
Fraud Act, punitive damages, and attorneys’ fees and
costs.4 (See id. at 217) (Prayer for Relief)
On October 23, 2020, Defendants removed this action from the Delaware Superior Court to this Court,
citing seven grounds for federal jurisdiction: (1) federal common law, (2) Grable jurisdiction, (3) complete
preemption by the Clean Air Act (“CAA”), (4) federal
enclave jurisdiction, (5) the federal officer removal
statute, 28 U.S.C. § 1442, (6) jurisdiction under the
Outer Continental Shelf Lands Act (“OCSLA”), 43
U.S.C. § 1331, et seq., and (7) the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1453. (See D.I. 1)
4
The Prayer for Relief in Plaintiff’s complaint does not seek
an injunction against Defendants’ oil production, marketing, and
sales activities. However, in stating the common-law nuisance
claim, the complaint does indicate that Plaintiff “seeks an order
that . . . enjoins Fossil Fuel Defendants from creating future common-law nuisance.” (D.I. 1-1 ¶ 263) During oral argument, Plaintiff insisted it is “in no way directly asking a court to limit, modify, alter, cease, [or] in any way hinder the actual exploration,
production, sale, [and] consumption of fossil fuels,” adding that
“any injunctive relief’ would instead “focus on the veracity of
marketing and other public communications.” (Tr. at 27-29)
Plaintiff then further clarified it would not “be looking for prospective injunctive relief against speech of any kind,” adding that
Defendants “can continue to market, but they may be subject to
liability in Delaware for continued false and deceptive conduct.”
(Id. at 93-94, 103) The Court, thus, understands that Plaintiff
seeks no injunctive relief “directed at [D]efendants’ forward-looking activities in any way.” (Id. at 29)
78a
Plaintiff filed the pending motion on November
20, 2020, seeking remand of the instant action back to
the Delaware Superior Court. (D.I. 86)
II. LEGAL STANDARDS
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 (2005). A defendant
may remove a civil action from a state court to a federal district court if the federal district court would
have original jurisdiction of the action. See 28 U.S.C.
§ 1441(a). However, “[i]f at any time before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded” to
state court. 28 U.S.C. § 1447(c).
“The removing party carries a heavy burden of
showing that at all stages of the litigation the case is
properly before the federal court. Removal statutes
are to be strictly construed, with all doubts to be resolved in favor of remand.”5 Manning v. Merrill Lynch
Pierce Fenner & Smith, Inc., 772 F.3d 158, 162 (3d Cir.
2014) (internal citation omitted).
III. DISCUSSION
In the notice of removal, Defendants asserted
seven grounds for removal. (D.I. 1) After Plaintiff
challenged each of these grounds (see generally D.I.
89), Defendants effectively abandoned their contentions with respect to complete preemption by the CAA,
5
Defendants assert that the principle of “all doubts to be resolved in favor of remand” is no longer viable after the Supreme
Court’s Baltimore III ruling. (Tr. at 71-72) The Court disagrees.
Baltimore III neither expressly addresses nor implicitly undermines this principle.
79a
federal enclave jurisdiction, and CAFA.6 Hence, the
Court needs to address only the four remaining
grounds: (1) federal common law, (2) Grable jurisdiction, (3) the federal officer removal statute, and (4) jurisdiction under the OCSLA. Defendants have failed
to meet their burden to show that this Court may exercise jurisdiction over this case on any of these four
grounds. Thus, the Court will grant Plaintiff’s motion
and remand this case to the Delaware Superior Court.
A. Federal Common Law
Defendants contend that Plaintiff’s state-law
claims “necessarily arise under federal common law”
because the issues presented in these claims “are exclusively federal in nature.” (D.I. 1 at 23; D.I. 96 at
16) According to Defendants, since Plaintiff’s claims
“seek to regulate transboundary and international
emissions and pollution,” they fall under one of the
specialized areas of overriding federal interest. (D.I.
96 at 16) Additionally, since Plaintiff’s claims “seek
to regulate the production and sale of oil and gas
6
In their briefing, Defendants only mention CAFA once in
passing, and address complete preemption and federal enclave
jurisdiction only in one footnote each. (See D.I. 96 at 6, 19 n.7, 51
n.12) These grounds for removal are, as a result, waived. See
John Wyeth & Bro. Ltd v. CIGNA Intl Corp., 119 F.3d 1070, 1076
n.6 (3d Cir. 1997) (“[A]rguments raised in passing (such as, in a
footnote), but not squarely argued, are considered waived.”); Peters v. Ryan, 2017 WL 1393692, at *2 (D. Del. Apr. 13, 2017)
(“When a party files an opposition brief and fails to contest an
issue raised in the opening brief, the issue is considered waived
or abandoned by the non-movant.”). During oral argument, Defendants confirmed that they have “narrowed things down” to
the four grounds that the Court addresses, adding that federal
enclave jurisdiction is “subsumed within” other bases for removal. (See Tr. at 65)
80a
abroad,” they implicate the “federal government’s
foreign affairs power.” (Id. at 18)
Plaintiff counters that federal common law cannot
provide an independent basis for removal because
Plaintiff’s complaint asserts exclusively state-law
claims; any exceptions to the well-pleaded complaint
rule are not satisfied in this case. (D.I. 89 at 8; D.I.
101 at 3) Plaintiff also insists that its claims do not
implicate federal common law, as they seek neither to
address cross-border pollution nor to regulate international fossil fuel production and sales. (D.I. 89 at 10;
D.I. 101 at 7)
The Court agrees with Plaintiff that federal common law cannot create federal jurisdiction to support
removal here, irrespective of whether Plaintiff’s
claims are “federal in nature.”7
Federal district courts have “original jurisdiction
of all civil actions arising under the Constitution,
laws, or treaties of the United States.” 28 U.S.C.
§ 1331. The “presence or absence of federal question
jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction
exists only when a federal question is presented on the
face of the plaintiff’s properly pleaded complaint.”
Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998)
(internal citation omitted). “[A] case may not be removed to federal court on the basis of a federal
7
Having found that federal common law cannot create a basis
for removal, the Court need not reach the question of whether
federal common law has been displaced by the Clean Air Act, as
Plaintiff contends. (See D.I. 89 at 11; D.I. 96 at 21-22) If Plaintiff
is correct, this would provide yet another basis to reject Defendants’ assertion of federal common law as a ground to deny remand.
81a
defense, including the defense of preemption, . . . even
if the defense is the only question truly at issue in the
case.” Franchise Tax Bd. v. Constr. Laborers Vacation
Tr. for S. Cal., 463 U.S. 1, 14 (1983). Hence, a plaintiff
may “avoid federal jurisdiction by exclusive reliance
on state law.” Caterpillar Inc. v. Williams, 482 U.S.
386, 392 (1987). Nevertheless, a court may uphold removal “where federal law completely preempts an asserted state-law claim.” Rivet, 522 U.S. at 471 (emphasis added). Federal law completely preempts state
law “[o]nly if Congress intended [for the federal law]
to provide the exclusive cause of action” asserted in
the claim. Beneficial Nat’l Bank v. Anderson, 539 U.S.
1, 9 (2003).
Plaintiff’s claims are not completely preempted by
federal common law. Defendants do not dispute, nor
can they, that Plaintiff’s complaint, on its face, only
asserts state-law causes of action. The complaint
makes no attempt to state any claims arising under
federal common law. Nor is there any indication that
Congress has intended for federal common law to provide the exclusive cause of action for the claims asserted in the complaint. See Beneficial Nat’l Bank,
539 U.S. at 9. In apparent recognition of the futility of
this theory, Defendants have expressly abandoned the
preemption ground, noting that their federal common
law analysis “does not implicate preemption principles or standards.” (D.I. 1 ¶ 14)
Unable to establish complete preemption, Defendants turn to argue that Plaintiff s claims have an “inherently federal nature.” (D.I. 96 at 18) This contention, too, is unpersuasive. In the Court’s view, Defendants’ repeated refrains that federal common law “governs” or “exclusively governs” the issues underlying
Plaintiff’s state-law claims are simply veiled—and
82a
non-meritorious, for purposes of removal—preemption arguments. (See, e.g., id. at 16) (referring to “specialized areas ‘where there is an overriding federal interest in the need for a uniform rule of decision”)
(quoting Illinois v. City of Milwaukee, 406 U.S. 91, 105
n.6 (1972) (“Milwaukee I”)) Ordinary preemption,
however, does not provide a basis for establishing federal jurisdiction. See Metro. Edison Co. v. Pa. Pub.
Util. Comm’n, 767 F.3d 335, 362 (3d Cir. 2014) (finding that “preemption arguments, other than complete
preemption, relate to the merits of the case” and “do
not ordinarily raise issues of subject matter jurisdiction”).
Neither the Supreme Court nor the Third Circuit
has held that a complaint expressly asserting statelaw claims that happen to implicate federal common
law can create an additional exception to the wellpleaded complaint rule and confer removal jurisdiction on federal courts. See Oakland, 969 F.3d at 908
(reversing district court’s finding that plaintiff’s nuisance claims are removable on ground that such
claims are governed by federal common law). The
cases cited by Defendants for this supposed proposition are inapposite, as they either involve plaintiff’s
expressly pleading federal common law causes of action, see Am. Elec. Power Co. v. Connecticut, 564 U.S.
410, 418, 421 (2011); Nat’l Farmers Union Ins. Cos. v.
Crow Tribe of Indians, 471 U.S. 845, 848-50 (1985); City
of Milwaukee v. Illinois (“Milwaukee II”), 451 U.S. 304,
310 (1981); Treiber & Straub, Inc. v. United Parcel
Serv., Inc., 474 F.3d 379, 383 (7th Cir. 2007), or involve
federal courts exercising subject matter jurisdiction on
grounds independent of federal questions, see Milwaukee I, 406 U.S. at 93 (proceeding by state plaintiff under
Supreme Court’s original jurisdiction pursuant to U.S.
Const. art. III, § 2, cl. 2); Banco Nacional de Cuba v.
83a
Sabbatino, 376 U.S. 398, 406 (1964) (common law conversion claim brought by foreign government in federal
district court); United States v. Standard Oil Co., 332
U.S. 301, 302 (1947) (claims brought by United States
in federal district court).8 None of these cases supports
the proposition that, in the context of removal, purportedly controlling federal common law issues—that are
not pleaded on the face of a complaint—create the
grounds for federal jurisdiction.9 Hence, existing law
8
This category of cases also includes the New York case cited
by Defendants as supplemental authority (D.I. 104), as that case
was filed in federal district court in the first instance based on
diversity jurisdiction. See City of New York v. BP PLC, 325 F.
Supp. 3d 466 (S.D.N.Y. 2018), aff’d, 993 F.3d 81, 94 (2d Cir. 2021)
(“Here, the City filed suit in federal court in the first instance.
We are thus free to consider the Producers’ preemption defense
on its own terms, not under the heightened standard unique to
the removability inquiry.”).
Defendants also cite United States v. Swiss Am. Bank Ltd,
191 F.3d 30, 45 (1st Cir. 1999), for the proposition that a case is
one “arising under” federal law “Ns long as the source of the rule
to be applied is federal.” (See D.I. 96 at 21-22) Swiss Am. Bank,
however, concerns a “claim that arises under federal law” for purposes of establishing personal jurisdiction over a foreign defendant under Federal Rule of Civil Procedure 4(k)(2), and does not
hold that a claim to which federal law applies as the source of the
rule also confers original subject matter jurisdiction under 28
U.S.C. § 1331.
9
In their notice of removal (although not in their briefs), Defendants cite a single case in which federal common law was relied on as an independent basis for conferring federal jurisdiction: Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 928-29
(5th Cir. 1997). In Sam L. Majors, the Fifth Circuit held that a
state-law negligence claim arose under federal common law and,
thus, gave rise to federal jurisdiction. In reaching that conclusion, the Fifth Circuit relied primarily on Milwaukee I and Nat’l
Farmers Union. Neither of these two cases, however, involved
removal on the basis of federal common law. Further, the
84a
governing federal question jurisdiction does not support Defendants’ reliance on federal common law to
establish removal jurisdiction in this case.10
Defendants’ reliance on the “artful pleading” doctrine fares no better. The Court rejects Defendants’
contention that this doctrine “is not necessarily linked
to [the] complete preemption doctrine.” (Tr. at 75; see
also D.I. 96 at 20) Under Third Circuit law, the “artful
pleading” doctrine is synonymous with the “complete
preemption” doctrine for purposes of establishing federal jurisdiction, supporting removal only where there
is “a clear indication of a Congressional intention to
permit removal despite the plaintiff’s exclusive reliance on state law.” Goepel v. Nat’l Postal Mail Handlers Union, 36 F.3d 306, 310 n.5, 311 (3d Cir. 1994)
(holding that “complete preemption” doctrine “has
been referred to elsewhere as the ‘artful pleading’
doctrine”); see also Inselberg v. New York Football
Giants, Inc., 661 F. App’x 776, 779 (3d Cir. 2016)
(same). Thus, absent a finding of complete preemption of Plaintiff’s state-law claims—and Defendants
reasoning of Sam L. Majors on this issue has been criticized by
a number of courts. See, e.g., Connecticut v. Exxon Mobil Corp.,
2021 WL 2389739, at *4 (D. Conn. June 2, 2021); Sekata v.
FedEx, 2020 WL 6546211, at *4-5 (N.D. Ohio Nov. 6, 2020); Bd.
of Cty. Comm’rs of Boulder Cty. v. Suncor Energy (U.S.A.) Inc.
(“Boulder I”), 405 F. Supp. 3d 947, 963 (D. Colo. 2019); Signer v.
DHL Worldwide Exp., Inc., 2007 WL 1521497, at *5-6 (S.D. Fla.
May 22, 2007). This Court, too, finds the reasoning of Sam L.
Majors unpersuasive.
10
Defendants’ argument that “Section 1331’s ‘grant of jurisdiction will support claims founded upon federal common law as
well as those of a statutory origin,’ while correct, is not dispositive, because Plaintiff has not asserted on the face of its complaint any “claims founded upon federal common law.” (D.I. 96
at 19) (quoting Nat’l Farmers Union, 471 U.S. at 850)
85a
disclaim any intent to show such complete preemption (see D.I. 1 ¶ 14)—the “artful pleading” doctrine
does not provide an independent basis for removal, regardless of whether federal common law provides the
rule of decision on the merits of Plaintiff’s state-law
claims. None of Defendants’ cited cases holds otherwise.11
In sum, Plaintiff only asserts state-law claims in
its complaint, and Defendants fail to show complete
preemption. Therefore, Plaintiff’s claims do not arise
under federal law for jurisdiction purposes. Federal
common law, even if (as Defendants insist) implicated
in Plaintiff’s state-law claims, does not provide a
proper basis for removing this case. See Oakland, 969
F.3d at 908; City of Hoboken v. Exxon Mobil Corp.,
2021 WL 4077541, at *5-6 (D.N.J. Sept. 8, 2021); Connecticut, 2021 WL 2389739, at *7; Minnesota v. Am.
Petroleum Inst., 2021 WL 1215656, at *6 (D. Minn.
11
Jarbough v. Att’y Gen. of the United States, 483 F.3d 184 (3d
Cir. 2007), Interfaith Cmty. Org. v. Honeywell Intl, Inc., 426 F.3d
694 (3d Cir. 2005), and First Pa. Bank, N.A. v. E. Airlines, Inc.,
731 F.2d 1113 (3d Cir. 1984), are all inapposite, as they were filed
and adjudicated in federal court and say nothing about the removability of state-law claims or subject matter jurisdiction. In
Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 397 n.2
(1981), the Supreme Court stated in a footnote: “[t]he Court of
Appeals also affirmed the District Court’s conclusion that Brown
II was properly removed to federal court, reasoning that the
claims presented were ‘federal in nature.’ We agree that at least
some of the claims had a sufficient federal character to support
removal.” In a subsequent case, the Supreme Court clarified that
Moitie’s “enigmatic footnote” does not create removal jurisdiction
on the basis of a federal defense. Rivet, 522 U.S. at 477-78 (“We
therefore clarify today that Moitie did not create a preclusion exception to the rule, fundamental under currently governing legislation, that a defendant cannot remove on the basis of a federal
defense.”).
86a
Mar. 31, 2021); Boulder I, 405 F. Supp. 3d at 964;
Rhode Island v. Chevron Corp. (“Rhode Island I”), 393
F. Supp. 3d 142, 150 (D.R.I. 2019); Mayor of Baltimore
v. BP P.L.C. (“Baltimore 1”), 388 F. Supp. 3d 538, 558
(D. Md. 2019); Cty. of San Mateo v. Chevron Corp.
(“San Mateo 1”), 294 F. Supp. 3d 934, 938 (N.D. Cal.
2018). Therefore, the Court will turn to consideration
of the other grounds asserted by Defendants as the
basis for federal removal jurisdiction.
B. Grable Jurisdiction
Federal jurisdiction exists in a “special and small
category” of cases even when a party’s claim “finds its
origins in state rather than federal law.” Gunn v. Minton, 568 U.S. 251, 258 (2013). Pursuant to what is
commonly referred to as “Grable jurisdiction,” “federal
jurisdiction over a state law claim will lie if a federal
issue is: (1) necessarily raised, (2) actually disputed,
(3) substantial, and (4) capable of resolution in federal
court without disrupting the federal-state balance approved by Congress.” Id. at 258; see also Grable &
Sons Metal Prods. v. Darue Eng’g & Mfg., 545 U.S.
308, 314-15 (2005). Defendants proffer numerous theories for why removal is proper here on the basis of
Grable jurisdiction, all of which rely on Defendants’
contention that Plaintiff’s claims “necessarily involve
inherently federal issues.” (D.I. 96 at 22) In the
Court’s view, however, no federal issue is “necessarily
raised” by this litigation. Accordingly, each of Defendants’ efforts to invoke Grable jurisdiction fails.
Most broadly, Defendants contend that Plaintiff’s
claims attempt to “supplant federal energy policy, exercise the federal foreign affairs power, and regulate
Defendants’ speech over matters of public concern.”
(Id.) The Court disagrees with Defendants’ characterization of Plaintiff’s claims. Instead, Plaintiff’s claims
87a
do not “necessarily raise” any question of federal law.
(See D.I. 89 at 13; D.I. 101 at 14) The federal interest
issues cited by Defendants do not provide “an essential element” for any of Plaintiff’s claims; nor does the
vindication of rights asserted in Plaintiff’s claims
“‘necessarily turn[] on some construction of federal
law.’” Manning, 772 F.3d at 163 (quoting Franchise
Tax Bd., 463 U.S. at 9).
More specifically, Defendants first argue that
Grable jurisdiction exists because Plaintiff’s claims
seek to “strike a new regulatory balance that would
supplant decades of national energy, economic, and
environmental policies on these issues,” and, thus,
“cannot be reconciled with the decision-making
scheme Congress enacted.” (D.I. 96 at 23) These
statements are not consistent with a fair reading of
Plaintiff’s claims. Instead, the claims asserted by
Plaintiff are based on Defendants’ alleged disinformation campaign—which purportedly led to increased
extraction, production, and consumption of petroleum
products, without warning to consumers and the public of the risks known to Defendants (see D.I. 1-1 ¶¶ 112)—and Plaintiff’s claims seek only relief directed
at recovering damages resulting from that alleged
disinformation campaign.12 In other words, rather
than (as Defendants, incorrectly, contend) “inviting
a Delaware state court to assert control over an entire industry and its interstate (indeed, international) commercial activities” (D.I. 96 at 23), Plaintiff’s claims in reality “do[] not challenge or seek to
overturn any federal law, rule, or program,” “do[]
12
Plaintiff clarified during oral argument that the injuries alleged in the complaint are limited to the “incremental impact”
resulting from Defendants’ “wrongful and tortious promotion
and marketing.” (Tr. at 24-26)
88a
not claim that Defendants are liable for violating
any federal law,” and “neither directly nor indirectly seek[] any relief from any federal agency.”
(D.I. 89 at 15) Whether the indirect, non-judiciallyimposed consequences of remediating the disinformation campaign (if, and only if, proven) would
lead to changes in “energy, economic, and environmental policies” is not a matter with which the
Court can be concerned.
See generally Hollingsworth v. Perry, 570 U.S. 693, 700 (2013) (holding that federal courts have authority to answer
questions “only if necessary to do so in the course
of deciding an actual ‘case’ or ‘controversy”). Federal jurisdiction is not created by predictions about
extra judicial realities that may (or may not) result
from a state court resolving a claim that raises
solely matters of state law.
Defendants’ next effort to invoke Grable jurisdiction rests on the theory that Plaintiff’s claims seek to
“regulate global climate change, which is an inherently federal matter that is the subject of major international treaties.” (D.I. 96 at 24) Contrary to Defendants’ assertion, however, nothing in Plaintiff’s complaint shows that Plaintiff “seeks to replace these international negotiations and decisions from the representative branches of government with a state-law solution.” (Id. at 25) Defendants cite generally to international agreements on climate change, including the
Kyoto Protocol of 1997 and the Paris Agreement of
2015, but fail to identify any “essential element” in
Plaintiff’s claims that would require a court to affirmatively answer any foreign affairs question. See
89a
Manning, 772 F.3d at 163. Hence, no federal question
concerning foreign affairs is “necessarily raised.”13
Nor does Defendants’ assertion that they may be
subject to both state and federal regulatory and enforcement regimes (see D.I. 96 at 23-24) bring this case
within the “slim category” of Grable jurisdiction. As
the Northern District of California stated in rejecting
this same position, “[o]n the defendants’ theory, many
(if not all) state tort claims that involve the balancing
of interests and are brought against federally regulated entities would be removable. Grable does not
sweep so broadly.” San Mateo I, 294 F. Supp. 3d at
938.
Finally, Defendants contend that Plaintiff’s
claims would “necessarily incorporate affirmative
federal constitutional elements imposed by the First
Amendment.” (D.I. 96 at 26) The Court is not persuaded.
While the cases cited by Defendants
13
See Oakland, 969 F.3d at 906-07 (rejecting Grable jurisdiction, which had been argued to be based on theory “that the Cities’ state-law claim implicates a variety of ‘federal interests,’ including . . . foreign policy”); Minnesota, 2021 WL 1215656, at *5
(“The Court declines Defendants’ invitation to interpret this
well-pleaded consumer protection action as a wholesale attack on
all features of global fossil fuel extraction, production, and policy.”); Boulder I, 405 F. Supp. 3d at 966 (“Certainly Defendants
have not shown that any interpretation of foreign policy is an
essential element of Plaintiffs’ claims.”); Rhode Island I, 393 F.
Supp. 3d at 151 (“By mentioning foreign affairs, . . . Defendants
seek to raise issues . . . that are not perforce presented by the
State’s claims.”); Baltimore I, 388 F. Supp. 3d at 559 (“[D]efendants’ generalized references to foreign policy wholly fail to
demonstrate that a federal question is ‘essential to resolving’ the
City’s state law claims.”); San Mateo I, 294 F. Supp. 3d at 938
(“The mere potential for foreign policy implications . . . does not
raise the kind of actually disputed, substantial federal issue necessary for Grable jurisdiction.”).
90a
address the constitutional boundaries for the remedies available under state-law defamation and libel
claims, they do not hold that the Constitution supplies a necessary element for these state-law claims.
See Milkovich v. Lorain J. Co., 497 U.S. 1, 20 (1990)
(holding that statement of “opinion” reasonably implying false and defamatory facts is subject to same
culpability requirements as statement of facts);
Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 52
(1988) (holding that public figures may not recover
for intentional infliction of emotional distress by
reason of publication without showing both falsity
and actual malice); Phila. Newspapers, Inc. v.
Hepps, 475 U.S. 767, 774-75 (1986) (holding that private figure plaintiff alleging defamation must prove
falsity in cases involving media defendant’s speech
on matters of public concern); New York Times Co.
v. Sullivan, 376 U.S. 254, 279-80 (1964) (holding
that public figures may recover for defamation only
when they can prove both falsity of statement and
that statement was made with actual malice). Defendants cite no authority for the proposition that
the First Amendment—through Grable jurisdiction—converts state law causes of action involving
speech into federal causes of action for purposes of
assessing jurisdiction.14 To the contrary, the Third
Circuit has repeatedly found that defamation
claims, despite having “profound First Amendment
implications,” are still “fundamentally a state cause
of action.” Tucker v. Fischbein, 237 F.3d 275, 281 (3d
14
The only case Defendants cite that was found removable
based on Grable jurisdiction involves a complaint that “expressly
states that [the defendant] violated the United States Constitution in describing [the plaintiffs state-law wrongful termination]
claims.” Ortiz v. Univ. of Med. & Dentistry of New Jersey, 2009
WL 737046, at *1 (D.N.J. Mar. 18, 2009).
91a
Cir. 2001) (internal citation omitted); see also Manning, 772 F.3d at 164 (“[E]ven if Plaintiffs’ claims were
partially predicated on federal law, federal law would
still not be necessarily raised.”).15
Many of the decisions Defendants cite in support
of their attempts to invoke Grable jurisdiction were
litigated to judgment in state courts, and then subsequently reviewed by the Supreme Court.16 (See D.I.
101 at 20) State and local governments routinely litigate nuisance and similar claims that purportedly
“target speech on matters of public concern”—and do
so in state court.17 (See id. at 19) It follows that, while
15
Defendants contended during oral argument that Plaintiff
was “seeking to get a prior restraint or to regulate speech.” (Tr.
at 47) In response, Plaintiff clarified that “a global prior restraint
order injunction . . . is just not part of this case.” (Id. at 93) Plaintiff confirmed that it would not “be looking for prospective injunctive relief against speech of any kind,” and that Defendants “can
continue to market, but they may be subject to liability in Delaware for continued false and deceptive conduct.” (Id. at 93-94,
103)
16
See Milkovich, 497 U.S. at 6-7 (Ohio); Hepps, 475 U.S. at 770
(Pennsylvania); New York Times, 376 U.S. at 256 (Alabama).
17
See, e.g., Delaware ex rel. Denn v. Purdue Pharma L.P., 2018
WL 1942363, at *1 (D. Del. Apr. 25, 2018) (remanding Delaware’s
case to state court where Delaware alleged, in part, that defendants “misrepresented material facts or suppressed, concealed, or
omitted material facts” concerning their products and compliance with federal drug laws); State v. Purdue Pharma LP, 2019
WL 4019929, at *12 (Okla. Dist. Ct. Aug. 26, 2019) (awarding
$572 million judgment in nuisance trial where “challenged conduct” was “misleading marketing and promotion of opioids,” contributing to statewide opioid crisis); Cty. of Santa Clara v. Atl.
Richfield Co., 40 Cal. Rptr. 3d 313, 330 (Cal. Ct. App. 2006) (reversing dismissal of public nuisance claim alleging that defendants misled consumers and public about dangers of indoor lead
paint).
92a
Plaintiff’s claims may implicate First Amendment
considerations, they do not “necessarily raise” a federal issue. See generally MHA LLC v. HealthFirst,
Inc., 629 F. App’x 409, 413 (3d Cir. 2015) (“The fact
that federal law may be informative . . . does not mean
that federal law is a necessary component of the cause
of action.”); see also Hoboken, 2021 WL 4077541, at *78 (rejecting argument that First Amendment created
Grable jurisdiction for state-law claims); Connecticut,
2021 WL 2389739, at *10 (same).
As Defendants have failed to demonstrate that a
federal issue is “necessarily raised” by Plaintiff’s
claims, Defendants have likewise failed to show that
the Court may exercise Grable jurisdiction. The Court
need not additionally evaluate whether Defendants
can meet any of the other three requirements for invoking Grable jurisdiction.
C. Federal Officer Removal Statute
The federal officer removal statute, 28 U.S.C.
§ 1442(a), is “an exception to the ‘well-pleaded complaint’ rule.” Kircher v. Putnam Funds Tr., 547 U.S.
633, 644 n.12 (2006). The statute permits removal
when four elements are met: “(1) the defendant is a
‘person’ within the meaning of the statute; (2) the
plaintiffs’ claims are based upon the defendant’s conduct ‘acting under’ the United States, its agencies, or
its officers; (3) the plaintiff’s claims against the defendant are ‘for, or relating to’ an act under color of
federal office; and (4) the defendant raises a colorable
federal defense to the plaintiff’s claims.” Papp v. ForeKast Sales Co., 842 F.3d 805, 812 (3d Cir. 2016) (internal citation omitted). “Unlike the general removal
statute, the federal officer removal statute is to be
broadly construed in favor of a federal forum.” In re
Commonwealth’s Motion to Appoint Couns. Against or
93a
Directed to Defender Ass’n of Phila., 790 F.3d 457, 46667 (3d Cir. 2015) (internal quotation marks omitted).
Defendants identify a number of activities they
contend satisfy the four elements of the federal officer
removal statute. They are: (1) securing and expanding fuel supplies during the two World Wars and the
Korean War (D.I. 1 ¶¶ 52-57); (2) developing mineral
resources on the outer continental shelf (“OCS”) (id.
¶¶ 59-62, 68-89); (3) operating the Elk Hills Reserve
(id. ¶¶ 90-107); (4) supplying and managing the Strategic Petroleum Reserve (id. ¶¶ 108-13); and (5) producing specialized fuels for the military (id. ¶¶ 11437). Plaintiff does not challenge that Defendants
are “person[s]” within the meaning of the statute
and only addresses Defendants’ colorable federal
defenses in passing. (D.I. 89 at 26 n.10) Plaintiff,
however, contends that (1) its claims do not rest on
activities “for, or relating to” an act under color of
federal office, and that (2) Defendants are not “acting under” federal officers. The Court addresses
each of these two issues, both of which Defendants
must prevail on to establish federal officer removal
jurisdiction.
1.
Whether Plaintiff’s Claims Concern
Acts “For, Or Relating To” An Act
Under Color Of Federal Office
In the Third Circuit, in order to meet the “for, or
relating to” requirement, “it is sufficient for there to
be a ‘connection’ or ‘association’ between the act in
question and the federal office.” 18 Defender Ass’n, 790
F.3d at 471.
18
The removal statute was amended in 2011 to include the
phrase “or relating to.” The Third Circuit has found this new
94a
Plaintiff points out that several activities Defendants rely on in their effort to show a connection or association between activities and federal office—including the operation of petroleum reserves and the
sales of “specialized petroleum products” to the U.S.
military—are irrelevant to the analysis because
Plaintiff has, in its complaint, expressly disclaimed
any “injuries arising on federal property and those
that arose from Defendants’ provision of fossil fuel
products to the federal government.” (D.I. 89 at 26; see
also D.I. 1-1 ¶ 14) Defendants respond that Plaintiff’s
disclaimer is ineffective because “such ‘attempts at
artful pleading to circumvent federal officer removal
by the use of jurisdictional disclaimers have generally
failed.’” (D.I. 96 at 56-59) (quoting Dougherty v. A O
Smith Corp., 2014 WL 3542243, at *5 (D. Del. July 16,
2014)) Defendants’ reliance on this Court’s decision in
Dougherty is misplaced. Plaintiff’s disclaimer here is
not a “jurisdictional disclaimer” that categorically disclaims jurisdiction conferred by the federal officer removal statute, but is instead a “claim disclaimer” that
“expressly disclaim[s] the claims upon which federal
officer removal was based.”19 Id. at *10. Dougherty
language “broaden[ed] the universe of acts that enable Federal
officers to remove to Federal court.” Defender Ass’n, 790 F.3d at
467. A defendant is no longer required to “show a nexus, a causal
connection between the charged conduct and asserted official authority,” Jefferson County v. Acker, 527 U.S. 423, 431 (1999) (internal citation and quotation marks omitted), as had previously
been understood to be required, see Defender Ass’n, 790 F.3d at
471-72.
19
In Dougherty, the Court emphasized the distinction between
a “jurisdictional claimer” and a “claim disclaimer.” The “jurisdictional disclaimer” the Court found ineffective to avoid removal
under the federal officer removal statute stated:
95a
recognizes that “federal courts have consistently
granted motions to remand” based on “claim disclaimers.” Id. Defendants have provided no persuasive basis for the Court to depart from that general principle
here.20
Plaintiff rightly explains that other activities
cited by Defendants—including Defendants’ activities
during the Korean War, the two World Wars, and
events occurring still earlier than these—are irrelevant for purposes of removal because Defendants’
Plaintiffs hereby disclaim any cause of action or claim for
recovery that could give rise to federal subject matter jurisdiction under either 28 U.S.C. § 1331 (federal question) or 28 U.S.C. § 1442, subdivision (a)(1) (federal officer).
Dougherty, 2014 WL 3542243, at *3. The “claim disclaimers,” on
which the Court granted a motion to remand, stated
Plaintiffs have disclaimed and hereby waive as the basis
for any relief in this case exposures that may have occurred during Mr. Dougherty’s service in the United
States Navy from 1945-1947
To the extent necessary, Plaintiffs also hereby waive all
claims against Crane stemming from Mr. Dougherty’s asbestos exposure from any federal government job site,
and aboard Navy ships or any other military vessel
Id. at *9. The disclaimer asserted by Plaintiff in this case is not
a “jurisdictional disclaimer,” but a “claim disclaimer.”
20
Defendants also argue that Plaintiff cannot “factually distinguish between its alleged injuries resulting from the combustion
of fuels produced at the government’s behest, and those resulting
from the combustion of fuels sold to any other consumer.” (D.I.
96 at 58) However, Plaintiff alleges that the “climatic and environmental responses to those emissions are calculable, and can
be attributed to Fossil Fuel Defendants on an individual and aggregate basis” by “quantifying greenhouse gas pollution attributable to Fossil Fuel Defendants’ products and conduct.” (D.I. 1-1
¶ 59)
96a
alleged disinformation campaign, which is what the
instant case is actually about, started “decades later.”
(D.I. 89 at 29-30) Defendants are simply wrong in
their insistence that all of their production activities,
including those pre-dating the misconduct alleged by
Plaintiff, are relevant to satisfying the “for, or relating
to” requirement. (D.I. 96 at 56 n.13) Defendants’ contention relies on their characterization of Plaintiff’s
claims, which the Court has found to be incorrect.
Plaintiff’s claims are not based on the “impacts caused
by the cumulative production of petroleum products,” as contended by Defendants (see id. at 55), but
are, instead, premised on the “incremental impacts”
caused by Defendants’ purported disinformation and
the resulting increased production and consumption
of petroleum products (see Tr. at 24). As Plaintiff has
conceded, it will not be entitled to recover any damages if it turns out that Defendants’ alleged campaign
of deception had “zero effect on extraction, production,
[and] consumption of fossil fuel.” (Id. at 26-27)21
21
Defendants rely on Acker, 527 U.S. at 432, and Defender Association, 790 F.3d at 474, for the proposition that the Court
must credit their “theory of the case” for purposes of the federal
officer removal statute. (See D.I. 96 at 55-56) Defendants have
misunderstood these cited cases. In Acker, whether there was a
connection between the claims in the lawsuit and the defendants’
official acts rested on disputed readings of an Ordinance imposing occupational taxes, and the Supreme Court credited the defendants’ reading because “[t]o choose between those readings of
the Ordinance is to decide the merits of this case.” Acker, 527
U.S. at 433. In Defender Association, whether a colorable federal
defense existed turned on conflicting interpretations of a federal
statute, and the Third Circuit accepted the defendants’ counsel’s
position because “[it] is the question squarely presented by the
merits of this case.” Defender Ass’n, 790 F.3d at 474. While an
officer needs not “win his case before he can have it removed,”
Willingham v. Morgan, 395 U.S. 402, 407 (1969), neither Acker
97a
Excluding Defendants’ activities covered by Plaintiff’s disclaimer and those predating the accused misconduct, the only remaining activity relevant to the
“for, or relating to” analysis is Defendants’ operations
under the OCS lease program.22 The Court finds that,
under the Third Circuit’s “more permissive view” of
the “for, or relating to” test, Papp, 842 F.3d at 813, the
issue of whether there is a sufficient “connection or
association” between Plaintiff’s claims and Defendant’s participation in the OCS lease program poses a
close call.
On one hand, Plaintiff’s claims, read as a whole,
are focused on “the disinformation and over-promotion campaign,” and the recoverable injuries are limited to those stemming from the “incremental impacts” caused by Defendants’ alleged deception and
misrepresentation. (See D.I. 89 at 28; see also Tr. at
24) Thus, the connection between the tortious misconduct alleged in the complaint and any of Defendants’
nor Defender Association authorize Defendants to freely rewrite
the complaint and manufacture a cause of action explicitly disclaimed by Plaintiff and then ask the Court to accept their “theory of the case” for purposes of removal. See Minnesota, 2021 WL
1215656, at *5 (“To adopt Defendants’ theory, the Court would
have to weave a new claim for interstate pollution out of the
threads of the Complaint’s statement of injuries. This is a bridge
too far.”); City and Cty. of Honolulu v. Sunoco LP, 2021 WL
531237, at *7 (D. Haw. Feb. 12, 2021) (declining to credit Defendants’ theory of case because “Defendants’ theory of the case is not
a theory for this case”).
22
Plaintiff also contends, and the Court agrees, that Defendants’ activities in connection with the Emergency Petroleum Allocation Act (“EPAA”) (see D.I. 1 ¶ 63 n.50; see also D.I. 96 at 4344) are irrelevant here because the EPAA only controlled the allocation and “distribut[ion] [of] available gasoline supplies.”
(D.I. 101 at 24-25) The EPAA did not require fossil fuel companies to increase production levels.
98a
individual fossil fuel production activities, including
the operations under the OCS lease program, may be
“too remote.” Hoboken, 2021 WL 4077541, at *10; see
also Mayor of Baltimore v. BP P.L.C. (“Baltimore II”),
952 F.3d 452, 466 (4th Cir. 2020).23 On the other hand,
although Defendants’ participation in the OCS lease
program does not form the source of tort liability asserted by Plaintiff (see Tr. at 93) (“[T]he only source of
liability is the misrepresentation . . . and the damages
are restricted to the impact in Delaware.”), the activity nonetheless contributes to the broader theory
about “how the unrestrained production and use of
Defendants’ fossil fuel products contribute to greenhouse gas pollution,” Baltimore II, 952 F.3d at 467, a
theory associated with Plaintiff’s alleged injuries.
The Court need not resolve this close question
here because, even assuming Defendants’ operations
under the OCS lease program satisfy the “for, or relating to” test, the relationship between Defendants and
the federal government under the OCS leases—for the
reasons to be explained in the next section—does not
meet the “acting under” requirement.
Thus,
23
The Fourth and Fifth Circuits have adopted the same, more
lenient “connection or association” test as the Third Circuit. See
Sawyer v. Foster Wheeler LLC, 860 F.3d 249, 257-58 (4th Cir.
2017); Williams v. Lockheed Martin Corp., 990 F.3d 852, 859-60
(5th Cir. 2021). Several other courts, applying the apparently
more stringent “causal nexus” standard, have found that the connection between Defendants’ fossil fuel production and a similarly-situated plaintiff’s claims is insufficient to satisfy the “for,
or relating to” requirement of the federal officer removal statute.
See, e.g., Rhode Island v. Shell Oil Prods. Co. (“Rhode Island II”),
979 F.3d 50, 59-60 (1st Cir. 2020); Minnesota, 2021 WL 1215656,
at *9; Honolulu, 2021 WL 531237, at *6-7; Boulder I, 405 F.
Supp. 3d at 976-78; Rhode Island I, 393 F. Supp. 3d at 152; San
Mateo I, 294 F. Supp. 3d at 939.
99a
Defendants have failed to show that removal is proper
under the federal officer removal statute, even assuming they could meet the “for, or relating to” test.
2.
Whether Defendants “Acted Under”
Federal Officers
The “acting under” requirement is “to be liberally
construed to cover actions that involve an effort to assist, or to help carry out, the federal supervisor’s duties or tasks.” Papp, 842 F.3d at 812 (internal citation
and quotation marks omitted). The “classic case” of
such a relationship is when a private contractor
“help[s] the Government to produce an item that it
need[s].” Id. (internal citation omitted). This relationship “typically involves subjection, guidance, or
control.” Watson v. Philip Morris Cos., 551 U.S. 142,
151 (2007). The relationship required to support
federal jurisdiction under the federal officer removal
statute, however, “does not include simply complying with the law.” Id. at 152.
Relying on the declaration of Dr. Richard Tyler
Priest (D.I. 98), Defendants contend that the OCS
leases “are not merely commercial transactions;” instead, the federal government exerts “substantial control and oversight” over Defendants’ operations under
the OCS leases (D.I. 96 at 36-38). Defendants further
contend that the OCS lease program reflects “the creation of a valuable national security asset for the
United States over time,” and that the OCS leases entered into with Defendants are intended to achieve
the same “federal objective” as would the creation of a
“national oil company.” (Id. at 36-40) The Court does
not agree that Defendants’ operations under the OCS
leases constitute acts under federal officers.
100a
What Defendants identify as “substantial control
and oversight” over their operations is no more than a
set of requirements that Defendants, like all other
OCS lessees, must comply with; specifically, federal
statutes and regulations concerning operation, safety,
and environmental impacts. See 43 U.S.C.
§ 1337(a)(1) (authorizing OCS leases to be granted
“under regulations promulgated in advance”); see
also Ctr. for Sustainable Econ. v. Jewell, 779 F.3d
588, 594 (D.C. Cir. 2015) (describing OCSLA as statute with “a structure for every conceivable step to be
taken on the path to development of an OCS leasing
site”). Dr. Priest generally opines that the regulations governing operations under the OCS leases
“went well beyond those that governed the average
federally regulated entity at that time.” (D.I. 98
¶ 19) Dr. Priest also points to, as additional evidence
that Defendants are “acting under” federal officers,
the detailed authorities provided by the statutes
and regulations to federal officers to enforce compliance. (See, e.g., D.I. 98 ¶¶ 20-29) However, even if a
private company is “subjected to intense regulation,” compliance with law and regulations is not
enough for “acting under” removal. See Watson, 551
U.S. at 153; see also Cty. of San Mateo v. Chevron
Corp. (“San Mateo II”), 960 F.3d 586, 603 (9th Cir.
2020) (“Mere compliance with the law, even if the
laws are highly detailed, and thus leave an entity
highly regulated, does not show that the entity is acting under a federal officer.”). Defendants fail to adduce any evidence that the federal government has
exercised “subjection, guidance, or control” over Defendants’ production activities beyond requiring Defendants to comply with statutes and regulations governing OCS leases.
101a
Fossil fuel production under the OCS leases by
private companies does not amount to an effort to assist federal officers to “fulfill basic government needs,
accomplish key government tasks, or produce essential government products.” Bd. of Cty. Comm’rs of
Boulder Cty. v. Suncor Energy (USA) Inc. (“Boulder
II”), 965 F.3d 792, 823 (10th Cir. 2020). The type of
relationship contemplated by the federal officer removal statute requires that Defendants “stand in for
critical efforts the federal superior would be required
to undertake itself in the absence of a private contract.” Id.; see also Cty. Bd. Of Arlington Cty. v. Express Scripts Pharm., Inc., 996 F.3d 243, 253-54 (4th
Cir. 2021) (finding that defendants “were essentially
acting as the statutorily authorized alter ego of the
federal government” by providing “healthcare services
that [Department of Defense] must, by law, provide”);
Papp, 842 F.3d at 813 (finding defendant “work[ed]
under a federal contract to produce an item the government needed, to wit, a military aircraft, and that
the government otherwise would have been forced to
produce on its own”); Isaacson v. Dow Chem. Co., 517
F.3d 129, 137 (2d Cir. 2008) (finding defendants “provide[d] a product that the Government was using during war,” which it otherwise “would have had to produce itself’). Here, by contrast, Defendants fall short
of demonstrating that OCS lessees are performing a
task that the federal government would otherwise be
required to undertake itself.
Additionally, Defendants are not “tailoring [their]
output to detailed federal formulations customized to
meet pressing federal needs;” rather, they are “leasing
federal land to facilitate commercial production of a
standardized, undifferentiated consumer product.”
Boulder II, 965 F.3d at 825; see also Baltimore II, 952
F.3d at 464 (“[T]he cited provisions seem typical of any
102a
commercial contract. They are incidental to sale and
sound in quality assurance.”); San Mateo II, 960 F.3d
at 601 (“The contracts evince an arm’s-length business relationship to supply . . . generally available
commercial products.”). The situation here is unlike
those found in cases in which the “acting under” relationship was present. See, e.g., Baker v. Atl. Richfield
Co., 962 F.3d 937, 943 (7th Cir. 2020) (finding “acting
under” relationship because of, in part, “the compulsion to provide the product to the government’s specifications”); Sawyer, 860 F.3d at 251-52 (finding that
defendant satisfies “acting under” requirement by
manufacturing boilers for use aboard U.S. Navy vessels “under the Navy’s strict specifications”).
Defendants’ reference to certain congressional
proposals to create a “national oil company” does not
help them. (D.I. 96 at 39) These never-enacted bills
provide no basis to find a congressional intent to create, directly or indirectly, a “national oil company.”
Thus, Defendants’ contention that they are “acting as
agents” to achieve the same “federal objective” (i.e., facilitating oil and gas production on the OCS) as would
a speculative, non-existent “national oil company”
lacks merit.
In sum, the relationship between Defendants and
the federal government under the OCS leases does not
satisfy the “acting under” requirement.24 Hence,
24
The First, Fourth, Ninth, and Tenth Circuits have examined
the same OCS leases at issue here, and all have rejected Defendants’ argument that Defendants acted under federal officers by
developing mineral resources pursuant to OCS leases. See Rhode
Island II, 979 F.3d at 59; Baltimore II, 952 F.3d at 465-68; San
Mateo II, 960 F.3d at 602; Boulder II, 965 F.3d at 820-27.
103a
Defendants have not shown that removal is proper under the federal officer removal statute.
D. Jurisdiction Under The OCSLA
The OCSLA provides federal district courts with
subject matter jurisdiction over “cases and controversies arising out of, or in connection with . . . any operation conducted on the outer Continental Shelf which
involves exploration, development, or production of
the minerals, of the subsoil and seabed of the outer
Continental Shelf . . . .” 43 U.S.C. § 1349(b)(1). To determine whether OCSLA jurisdiction is present, the
Court assesses (1) whether there is an “operation,”
and (2) whether the case “arise[s] out of, or in connection with” such “operation.”
The parties disagree as to the proper legal standard to be applied with respect to the first prong of the
test. Relying on the text of the statute, Defendants
contend the inquiry is “did the defendant engage in an
‘operation conducted on the [OCS]’ that entails the ‘exploration’ and `production’ of ‘minerals.’” (D.I. 96 at
29) Under that interpretation, Defendants argue they
satisfy the “operation” requirement. See Honolulu,
2021 WL 531237, at *3 (“Here, the parties do not dispute that Defendants, at least to some extent, engage
in operations of exploration, development, or production on the outer Continental Shelf.”). Plaintiff, citing
Fifth Circuit precedent, counters that the inquiry is
whether “the activities that caused the injury constituted an ‘operation’ conducted on the OCS’ that involved the exploration and production of minerals.”
(D.I. 89 at 50) (citing In re Deepwater Horizon, 745
F.3d 157, 163 (5th Cir. 2014)) On this view, Plaintiff
continues, Defendants’ “activities that caused the injury” are not an “operation” because Plaintiff’s claims
are rooted in Defendants’ alleged disinformation
104a
campaign, not in Defendants’ fossil fuel production.
See Baltimore I, 388 F. Supp. 3d at 566-67 (“[T]he
City’s claims are based on a broad array of conduct,
including defendants’ failure to warn consumers and
the public of the known dangers associated with fossil fuel products, all of which occurred globally.”);
Boulder I, 405 F. Supp. 3d at 978-79 (“Defendants
were not sued merely for producing fossil fuel products, let alone for merely producing them on the
OCS.”). The Court need not resolve this dispute because Defendants fail the second prong of the test;
thus, they cannot invoke federal jurisdiction under
the OCSLA even if they have demonstrated an “operation.”
Under the second prong, the Fifth Circuit—which
has substantial familiarity with OCSLA cases—has
held that Defendants must show a “but for” connection between “the cause of action and the OCS operation.” Deepwater Horizon, 745 F.3d at 163. Here, Defendants cannot satisfy this requirement. Defendants
contend only that their purportedly “significant” OCS
production has contributed in some way to Plaintiff’s
injuries (D.I. 96 at 30), but they do not argue that
Plaintiff would not have been injured “but for” Defendants’ operations on the OCS.25 See generally Recar v. CNG Producing Co., 853 F.2d 367, 369 (5th Cir.
1988) (finding plaintiff’s activities fall within scope of
OCSLA because plaintiff “would not have been injured `but for’ the maintenance work he was performing and supervising on the platform”).
25
It appears that Defendants have conceded this point, as they
stated during oral argument that “no one could prove but-for causation as to any particular one [i.e., an OCS operation] because
it is so global in nature.” (Tr. at 84)
105a
Having failed to satisfy the “but for” requirement,
Defendants instead argue that the requirement
should not apply here. Defendants first contend that
the “but for” requirement is “contrary to the text of the
statute, which requires only a ‘connection.’” (D.I. 96 at
31) However, as the Supreme Court has observed,
“[t]he phrase ‘in connection with’ provides little guidance without a limiting principle.” Maracich v.
Spears, 570 U.S. 48, 49 (2013). In the Court’s view,
the “but for” requirement as construed by the Fifth
Circuit is a reasonable principle that limits the scope
of the phrase. See Deepwater Horizon, 745 F.3d at
163 (“Even though one can hypothesize a ‘mere connection’ between the cause of action and the OCS operation too remote to establish federal jurisdiction,
this court deems § 1349 to require only a ‘but-for’
connection.”).
Defendants also contend that while a “but for”
connection would be sufficient to meet the requirement for OCSLA jurisdiction, it is not necessary. (D.I.
96 at 31) The Court agrees, however, with the decisions that have interpreted the “but for” connection as
a necessary requirement; decisions that have also,
therefore, declined to find jurisdiction based on a more
tangential relationship. See, e.g., Robin v. CreightonSmith, 488 F. Supp. 3d 459, 465 (E.D. La. 2020)
(“Plaintiffs’ contractual claims . . . are at best only
tangentially related to such an operation and do not
come close to meeting the but-for test required to
give rise to jurisdiction.”); Bd. of Comm’rs of the Se.
La. Flood Prot. Auth.-E. v. Tenn. Gas Pipeline Co., 29
F. Supp. 3d 808, 837 (E.D. La. 2014) (finding no
OCSLA jurisdiction because “Plaintiff’s injury would
have occurred regardless of operations on the OCS,
106a
and the but-for test is not satisfied.”).26 Several district courts that have considered the identical issue
raised by similarly-situated defendants have uniformly held that a but-for connection is necessary for
finding OCSLA jurisdiction. The Court sees no persuasive reason to depart from these holdings.27
Since Defendants fail to demonstrate a “but for”
connection between their “operations” on the OCS and
Plaintiff’s claims, they cannot rely on the OCSLA for
26
The Court is not persuaded by Defendan
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.