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Baltimore’s claim against Big Oil should be in U.S. court, businesses say

Baltimore’s climate change lawsuit against Big Oil should be heard in federal rather than state court, the U.S. Chamber of Commerce told the U.S. Supreme Court this week in expressing support for the fossil fuel companies’ appeal.

In papers filed with the justices, the chamber said a lower court applied too strict a standard for federal court jurisdiction over litigation with national implications by ordering the city’s claim to be heard in state court.

If left unchanged, the 4th U.S. Circuit Court of Appeals’ order could result in oil companies — and other nationwide businesses — to litigate environmental claims in the 50 states rather than be subjected to a single national standard, stated the chamber, a federation of U.S.-based businesses.

The chamber submitted its brief as the justices prepare to hear Big Oil’s appeal of the 4th Circuit’s decision remanding Baltimore’s lawsuit to state court over the companies’ objection.

“Climate change is one of the biggest challenges facing society today,” the chamber stated in its brief supporting the oil companies.

“But it is an inherently national (and indeed international) problem,” the chamber added. “In particular, only federal law could supply a cause of action for the local manifestations of global climate change caused by a defendant’s worldwide contribution to global emissions,” the chamber added. “Otherwise, virtually any entity in the world could be subject to a welter of overlapping and potentially conflicting regulation by each of the 50 states.”

Baltimore, however, has argued that the 4th Circuit properly remanded the case to 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 Supreme Court in a recent filing.

The justices will hear arguments in the case early next year and issue their decision by the end of June. The case is docketed at the high court as BP PLC et al v. Mayor and City Council of Baltimore, No. 19-1189.

The justices’ consideration of Big Oil’s appeal 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 successful 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 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,” wrote Shanmugam, of Paul, Weiss, Rifkind, Wharton & Garrison LLP in Washington. “This case is an optimal vehicle for consideration of that important question.”

Baltimore, in its unsuccessful 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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