To Remove or Not to Remove? Can You Remove? State vs. Federal Jurisdiction Is the Question

In City of Hoboken v. Chevron Corp. et al., No. 21-2728 (3rd Cir. Aug. 17, 2022) the Third Circuit Court of Appeals upheld federal district-court rulings in New Jersey and Delaware that climate-change lawsuits against oil companies can be brought in state court, holding that the claims in these cases are based on state tort law and there is no federal basis for the companies to remove the cases to federal court. The oil companies argued that the cases are preempted by federal law and that the cases raised substantial, disputed federal questions that would give federal courts jurisdiction. However, the Third Circuit panel said the companies did not show “complete preemption” (stated expressly by this court as rare and applying “only when there is (1) a federal statute that (2) authorizes federal claims “vindicating the same interest as the state claim.”). The court said “ordinary preemption” did not overcome the state-court claims because it is a defense, and that defenses are not the kind of substantial federal questions that support federal jurisdiction, finding that federal common law would not govern these claims, absent complete preemption.

The Third Circuit joins the Tenth, Fourth, and First Circuits in rejecting oil companies’ removal attempts. The Second Circuit has determined that New York City’s climate-change suit was a matter of federal law, and the Eighth Circuit is yet to decide on an appeal of a Minnesota federal judge’s decision to remand the state’s climate-change suit to state court.

In June 2022, Exxon and Suncor petitioned the U.S. Supreme Court to grant a writ of certiorari that claims related to climate change and greenhouse gases are a matter of federal common law, given the conflicts among the circuit courts. On October 3, 2022, SCOTUS invited the solicitor general to file a brief expressing the views of the United States on the questions, which some suggest indicates an interest in the case. Stay tuned.