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SCOTUS Declines to Resolve U.S. Climate Change Litigation, For Now

Oliver Peter Thoma

Summary

  • The primary battlegrounds for climate change lawsuits have been whether federal or state courts are the proper forum and whether the plaintiffs’ novel state-law claims (i) are preempted by federal statutes or displaced by federal common law and/or (ii) raise nonjusticiable political questions that should be resolved by the executive and legislative branches.
  • The merits of the proper forum for climate change lawsuits (e.g., whether federal question jurisdiction exists under 28 U.S.C. § 1331) are now being briefed in the First, Fourth, Ninth, and Tenth Circuits
  • Now that the Supreme Court has denied the energy company defendants’ petition for a writ of certiorari, the Oakland case will return to state court.
  • The Supreme Court has shown that it is not yet ready to address the jurisdictional issues raised by these climate change lawsuits.
SCOTUS Declines to Resolve U.S. Climate Change Litigation, For Now
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The October 2020 U.S. Supreme Court term took an incremental approach to U.S. climate change tort litigation, declining to wade into the merits of such claims or whether such claims should be brought in federal or state court. As a result, climate change litigation will move forward in the lower federal and state courts until the Supreme Court weighs in on the propriety of such litigation—and we may not have to wait long.

Over two dozen lawsuits have been brought by state attorneys general and municipalities claiming that energy companies should be held liable for promoting fossil fuels, which these plaintiffs claim has significantly contributed to global climate change. These lawsuits allege billions of dollars in damages needed for adaptation costs (e.g., building sea walls to mitigate a potential rise in sea levels) and for the increases in public health costs associated with increased air temperatures, flooding, and air pollution.

The primary battlegrounds for climate change lawsuits have been whether federal or state courts are the proper forum and whether the plaintiffs’ novel state-law claims (i) are preempted by federal statutes or displaced by federal common law and/or (ii) raise nonjusticiable political questions that should be resolved by the executive and legislative branches.

This article summarizes recent developments in this important area of law, focusing on the U.S. Supreme Court’s narrow ruling in BP P.L.C. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532 (2021) (Baltimore); its denial of petition for a writ of certiorari in City of Oakland v. BP PLC, 969 F.3d 895 (9th Cir. 2020), cert. denied, No. 20-1089, 2021 WL 2405350, at *1 (U.S. June 14, 2021) (Oakland); and other cases that might come before the Court in the next few years.

Baltimore Ruling Keeps Alive Debate over Federal Versus State Court as Proper Forum

All but one of the current climate change lawsuits was brought in state court. The energy company defendants removed each state-court lawsuit, only to have most federal district judges remand the cases back to state court. The energy company defendants appealed these remand orders, and the First, Fourth, Ninth, and Tenth Circuits each held that 28 U.S.C. § 1447(d) limited their review of the remand orders to federal officer removal (28 U.S.C. § 1442) and/or civil rights removal (28 U.S.C. § 1443). These federal appellate courts held that federal officer removal jurisdiction did not exist under the facts of each case. Rhode Island v. Shell Oil Prods. Co., 979 F.3d 50 (1st Cir. 2020); Mayor & City Council of Balt. v. BP P.L.C., 952 F.3d 452 (4th Cir. 2020); Cnty. of San Mateo v. Chevron Corp., 960 F.3d 586 (9th Cir. 2020); Bd. of Cnty. Comm’rs of Boulder Cnty. v. Suncor Energy (U.S.A.) Inc., 965 F.3d 792 (10th Cir. 2020).

However, the energy company defendants secured a major victory with the Supreme Court’s May 17, 2021, Baltimore ruling, which revived the debate over whether federal or state court is the proper forum for climate change lawsuits. The 7–1 Baltimore opinion, authored by Justice Neil Gorsuch, held that the Fourth Circuit erred in limiting its review of the district court’s remand order to only federal officer removal grounds, but declined to consider additional grounds for removal, such as whether climate change claims inherently raise a question of federal law under 28 U.S.C. § 1331. BP P.L.C. v. Mayor & City Council of Balt., 141 S. Ct. 1532 (2021).

Although the Supreme Court’s Baltimore opinion did not settle whether climate change lawsuits belong in federal or state court, the Supreme Court vacated the judgments and issued remand orders in similar climate change lawsuits pending in the First, Ninth, and Tenth Circuits, directing each of the federal district courts to reconsider all grounds of removal raised by the energy company defendants. Shell Oil Prods. Co. v. Rhode Island, No. 20-900, 2021 WL 2044535, at *1 (U.S. May 24, 2021); Chevron Corp. v. San Mateo Cnty., CA, No. 20-884, 2021 WL 2044534, at *1 (U.S. May 24, 2021); Suncor Energy, Inc. v. Bd. of Cnty. Comm’rs of Boulder Cnty., No. 20-783, 2021 WL 2044533, at *1 (U.S. May 24, 2021). As a result, the merits of the proper forum for climate change lawsuits (e.g., whether federal question jurisdiction exists under 28 U.S.C. § 1331) are now being briefed in the First, Fourth, Ninth, and Tenth Circuits—leaving open the possibility that the Supreme Court could answer this question in the near future.

U.S. Supreme Court Declines to Address Climate Change Issues in October 2021 Term

On June 14, 2021, the Supreme Court issued a single-sentence order denying the energy company defendants’ petition for a writ of certiorari to address whether climate change claims raise a question of federal law under 28 U.S.C. § 1331 in two climate change lawsuits brought by the City of Oakland and the City and County of San Francisco (Oakland). Petition, Chevron Corp. v. City of Oakland, Cal., No. 20-1089 (U.S. Jan. 8, 2021).

The Oakland plaintiffs filed suit in California state court against five energy companies, alleging that their production, sale, and promotion of fossil fuels contributed to climate change. The plaintiffs asserted a single public nuisance cause of action under California law. After the defendants removed, the federal district court denied the plaintiffs’ motion to remand to state court, holding that their claims were “necessarily governed by federal common law.” California v. BP P.L.C., Nos. C 17-06011 WHA, C 17-06012 WHA, 2018 WL 1064293 at *2 (N.D. Cal. Feb. 27, 2018). The court observed that “[i]f ever a problem cried out for a uniform and comprehensive solution, it is the geophysical problem described by the complaints, a problem centuries in the making.” City of Oakland v. BP PLC, 969 F.3d 895 (9th Cir. 2020), cert. denied, No. 20-1089, 2021 WL 2405350, at *1 (U.S. June 14, 2021).

After denial of remand, the Oakland plaintiffs filed an amended complaint, adding a cause of action for public nuisance under federal common law. The Oakland plaintiffs amended their complaint rather than seek immediate appellate review after the district court certified its denial of remand for appeal. Subsequently, the district court dismissed the case for failure to state a claim, finding that the plaintiffs’ federal common-law claims were “foreclosed by the need for federal courts to defer to the legislative and executive branches when it comes to such international problems.” City of Oakland v. BP P.L.C., 325 F. Supp. 3d 1017, 1024 (N.D. Cal. 2018).

The Ninth Circuit reversed, holding that the plaintiffs’ public nuisance claim “[did] not require resolution of a substantial question of federal law” such that federal question jurisdiction existed. City of Oakland, 969 F.3d at 906. The Ninth Circuit also held that the Oakland plaintiffs did not waive their remand arguments by amending their complaint to add a federal common-law cause of action and that the amended pleading did not establish federal jurisdiction.

Now that the Supreme Court has denied the energy company defendants’ petition for a writ of certiorari, the Oakland case will return to state court.

Second Circuit Ruling Creates Circuit Split on the Merits of Climate Change Claims

On April 1, 2021, the Second Circuit issued its opinion affirming the district court’s dismissal of New York’s climate change lawsuits against several major energy companies. City of New York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021). This case was unique because it was originally filed in federal district court. In granting the defendants’ motion to dismiss for failure to state a claim, the district court held that New York’s claims could be pursued only under federal law, not under state law; any federal common-law nuisance and trespass claims based on domestic emissions were displaced by the Clean Air Act; and any claims based on foreign emissions were barred by the presumption against extraterritoriality and the need for judicial caution in the face of serious foreign policy consequences.

The Second Circuit affirmed the district court by holding that New York’s state-law claims were displaced by federal common law. The Second Circuit recognized the significant challenges of tracing greenhouse gas emissions from specific emitters and tracing climate change effects to a particular state. The Second Circuit held that trying to enforce one state’s laws “for the cumulative impact of conduct occurring simultaneously across just about every jurisdiction on the planet . . . over the past several hundred years” is untenable. Id. at 92. The Second Circuit held that federal common law displaced New York’s state-law claims and that the Clean Air Act preempted any federal common-law claims for domestic emissions—all of which followed the logic of Justice Ginsburg’s majority opinion in American Electric Power Co. v. Connecticut. Id. at 89–100 (citing Am. Elec. Power Co. v. Connecticut (AEP), 564 U.S. 410, 421–29 (2011)).

The Second Circuit held that claims arising from foreign emissions—which do not fall within the ambit of the Clean Air Act—were barred because “foreign policy concerns foreclose New York’s proposal here to recognize a federal common law cause of action targeting emissions emanating from beyond our national borders.” Id. at 101. The Second Circuit further warned that “federal courts must proceed cautiously when venturing into the international arena so as to avoid unintentionally stepping on the toes of the political branches.” Id. at 102.

The City of New York plaintiffs declined to file a petition for a writ of certiorari with the U.S. Supreme Court, leaving the Second Circuit’s opinion unchallenged. Instead, the plaintiffs filed a new state-court lawsuit on April 22, 2021, adding a New York–based defendant and asserting consumer protection causes of action based on the same underlying theory as the original City of New York lawsuit (i.e., the defendants engaged in an alleged campaign to mislead the public about climate change). The energy company defendants removed the case to federal court.

While that litigation has become a focus of attention, the Second Circuit will soon decide whether federal or state court is the proper forum for resolving similar litigation filed by the Connecticut attorney general, largely based on the same underlying theory of liability as the recently filed City of New York case. Connecticut v. Exxon Mobil Corp., Case No. 21-1446 (2d Cir. 2021). A Second Circuit decision could provide another opportunity for the Supreme Court to consider whether federal or state court is the proper forum for resolving climate change litigation.

Conclusion

The Supreme Court has shown that it is not yet ready to address the jurisdictional issues raised by these climate change lawsuits. Whether it declined to hear Oakland because it is waiting for the case law to percolate in the lower courts or because it does not believe that the jurisdictional issues are cert-worthy remains uncertain.

The Supreme Court recently agreed, however, to hear challenges to the Environmental Protection Agency’s (EPA’s) authority to regulate greenhouse gases, including whether the EPA has authority to restructure the nation’s energy system by unilaterally decarbonizing any sector of the economy. The Supreme Court’s ruling in these consolidated cases could provide further insight into the future of climate change lawsuits brought under novel state-law claims. West Virginia v. Env’t Prot. Agency, Case No. 20-1530 (U.S. 2021); N. Am. Coal Corp. v. Env’t Prot. Agency, Case No. 20-1531 (U.S. 2021); Westmoreland Mining Holdings LLC v. Env’t Prot. Agency, Case No. 20-1778 (U.S. 2021); North Dakota v. Env’t Prot. Agency, Case No. 20-1780 (U.S. 2021).

Meanwhile, climate change litigants will be battling over the proper forum for climate change lawsuits in the First, Second, Fourth, and Tenth Circuits in light of Baltimore. Briefing is underway in these cases to address other grounds for federal jurisdiction, such as whether state-law-based climate change lawsuits require resolution of a substantial question of federal law.

Courts hearing the related state-court proceedings must determine whether to wait for the federal appellate courts to decide whether federal jurisdiction exists or whether such claims are barred. For instance, on May 25, 2021, the Maryland state court overseeing the remanded Baltimore case issued a stay of proceedings until the Fourth Circuit issues its opinion on remand from the Supreme Court. Order, Mayor & City Council of Balt. v. BP P.L.C., Case No. 24-C-18-004219 (Balt. City Cir. May 25, 2021). However, after the Supreme Court declined to hear Oakland, state courts may feel emboldened to allow state-court actions to proceed, or at least continue until the Supreme Court intervenes.

The future of climate change litigation is currently obscured as the litigants wait to see whether the Supreme Court will step in to resolve the disputes over the proper forum for climate change lawsuits or whether such claims are displaced, preempted, and/or raise nonjusticiable political questions best left to the legislature and executive branches. Until the Supreme Court answers these questions (or further declines to entertain such questions), climate change litigation will continue to mature in state courts over the next few years, turning to substantive issues of duty, liability, causation, and damages.

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