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Justices will hear Big Oil’s bid to move Baltimore suit to U.S. court

Steve Lash//October 2, 2020

Justices will hear Big Oil’s bid to move Baltimore suit to U.S. court

By Steve Lash

//October 2, 2020

A flag bearing the company logo of Royal Dutch Shell, an Anglo-Dutch oil and gas company, flies outside the head office in The Hague, Netherlands April 7. Iran's state TV is reporting that Royal Dutch Shell and France's Total will be the first foreign companies to be allowed to operate gasoline stations inside Iran (AP Photo/Peter Dejong, File)
Shell is among the 21 fossil fuel companies contesting the city of Baltimore’s efforts to have its climate change lawsuit heard in state, not federal, court. The Supreme Court Friday agreed to hear the companies’ appeal of lower court rulings that the litigation should be sent to state court. (AP Photo/Peter Dejong, File)

The U.S. Supreme Court will hear Big Oil’s bid to have Baltimore’s climate change lawsuit against the fossil fuel companies litigated in federal rather than state court.

In an order Friday, the justices said they will review the companies’ argument that a U.S. appeals court applied too narrow a standard for federal court jurisdiction over a lawsuit with national implications.

The firms say the litigation belongs in U.S. district court because Baltimore’s claim of environmental damage under Maryland law implicates the U.S. government’s role in litigating interstate emissions as evidenced by the federal clean air act.

Baltimore, in its ill-fated request that the justices deny review, said the 4th U.S. Circuit Court properly limited the basis for permitting the litigation to be in U.S. district court rather that city circuit court. The 4th Circuit correctly remanded the case to the state court because the companies had not shown the necessary element for federal jurisdiction — that they were acting at the direction of U.S. officials, the city’s outside counsel, Victor M. Sher, told the high court in a recent filing.

The Supreme Court will hear Big Oil’s appeal during its 2020-2021 term, which begins Monday. A decision is expected by June.

The case is docketed at the high court as BP PLC et al v. Mayor and City Council of Baltimore, No. 19-1189.

Justice Samuel A. Alito Jr. has recused himself from hearing the case. Alito did not publicly disclose the reason for his recusal.

Acting Baltimore Solicitor Dana P. Moore said Friday that the justices will “review a narrow technical issue that has no bearing on the substance of Baltimore’s suit to hold these defendants accountable for the climate change harms and costs they are imposing on our taxpayers.”

“It has been over two years since the City of Baltimore filed our case. Two more years of increased climate change damage to our city, and two more years of mounting costs to our taxpayers,” Moore added in her statement. “Accountability is coming.”

Counsel for the companies declined to comment on the case beyond their court filings.

The justices’ granting of review marks the latest action in Baltimore’s lawsuit alleging the fossil-fuel companies concealed from and misinformed the public about the dangerous contributions their energy-generating activities made toward climate change.

The lawsuit, filed in Baltimore City Circuit Court, seeks millions of dollars in damages for alleged violations of the Maryland Consumer Protection Act, as well as products liability, public nuisance and trespass.

The 21 companies, which are facing similar litigation in many other states, deny the allegations.

The legal odyssey began when the companies sought to remove the city’s lawsuit to federal district court, where they believe they have a better chance for a pretrial victory than in state court.

U.S. District Judge Ellen L. Hollander remanded the case to Baltimore City Circuit Court in June 2019, saying the city’s state law claims did not implicate federal jurisdiction. The 4th Circuit upheld the remand, ruling in March that the companies had not shown they acted at the direction of a federal officer.

In their petition for review, the companies told the justices that U.S. appeals courts are divided on whether their review of remand decisions such as Hollander’s is limited to instances when the defendant seeking federal jurisdiction was acting at a federal officer’s direction.

The Chicago-based 7th U.S. Circuit Court of Appeals, for example, said appellate courts can review all the reasons given for federal jurisdiction, not just the federal-officer removal standard, wrote Kannon K. Shanmugam, the companies’ counsel of record before the high court.

“The circuit conflict on the question presented is clear, and it warrants the (Supreme) Court’s review in this case,” wrote Shanmugam, of Paul, Weiss, Rifkind, Wharton & Garrison LLP in Washington.

“The question is also of substantial legal and practical importance; indeed, the question is currently arising with acute frequency in climate change lawsuits similar to this one, where the arguments for federal jurisdiction are compelling,” Shanmugam added. “This case is an optimal vehicle for consideration of that important question.”

Baltimore, in its request that the high court deny the petition for review, said the 4th Circuit’s decision was in keeping with federal law, which strictly limits appellate review of U.S. district court decisions that a case does not belong in federal court.

“(T)he 4th Circuit’s interpretation of (federal law), shared by almost every circuit to address the issue, is consistent with the statutory text and strict limitations Congress has historically placed on remand orders,” wrote Sher, of Sher Edling LLP in San Francisco. “The only exceptions Congress has carved out from the otherwise absolute statutory bar on appellate review, outside of the class action context, are for removals based on the federal civil-rights removal statute and the federal-officer removal statute.”

The companies being sued by Baltimore include BP America Inc., Chevron Corp., CITGO Petroleum Corp., ConocoPhillips Co., Exxon Mobil Corp.; Hess Corp., Marathon Petroleum Corp., Phillips 66 and Shell Oil Co.


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