The U.S. Supreme Court on Monday revived Big Oil’s bid to have Baltimore’s climate change lawsuit against about two dozen fossil fuel companies litigated in federal rather than state court.
In a 7-1 decision, the justices ruled that the 4th U.S. Circuit Court of Appeals had applied too narrow a standard for federal court jurisdiction over the city’s lawsuit. The 4th Circuit had erroneously held that federal courts lacked statutory jurisdiction because the oil companies had not claimed they were acting at the direction of a federal officer, the Supreme Court held.
The high court, however, did not automatically grant federal jurisdiction over Baltimore’s lawsuit, choosing to leave that decision in the first instance to the 4th Circuit.
The 4th Circuit will now consider Big Oil’s argument that the case belongs in U.S. district court – rather than city circuit court — because Baltimore’s allegations of environmental damage under Maryland law implicate the federal government’s role in regulating interstate emissions.
The lawsuit, filed in 2018 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 companies, which are facing similar litigation in many other states, deny the allegations. They seek to have Baltimore’s case heard in federal court, where civil litigators have opined that the companies 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 2020 that the companies had not shown they acted at the direction of a federal officer.
But the Supreme Court, ruling in the companies’ appeal, said the federal statute governing removal of state cases to U.S. courts is not so narrow.
The law “allows appellate courts to examine all (and not just some) removal grounds,” which could help expedite appeals of district court orders, such as Hollander’s, that send a case back to state court, Justice Neil M. Gorsuch wrote for the high court.
“Suppose a court of appeals finds the (removal) issue a difficult and close one, but believes removal is clearly and easily warranted on another basis,” Gorsuch wrote.
“Allowing the court to address that easier question and avoid harder ones may facilitate a prompter resolution of the proceeding for all involved,” he added. “At the least, a rational Congress could have thought that considerations like these warranted allowing a court of appeals the power to review the whole of a district court’s remand order rather than just certain select aspects of it.”
Sara Gross, of the Baltimore City Law Department, predicted Monday that the city will ultimately win in its effort to have the case remanded to state court.
“While this isn’t the outcome we wanted, we are fully confident that the city will prevail again when the remaining issues are considered by the Court of Appeals,” Gross, chief of the department’s affirmative litigation division, said in a statement. “Judge Hollander has already rejected every single one of the fossil fuel defendants’ arguments (for removal), as have federal district court judges in 10 other climate damage and deception cases around the country.”
Kannon K. Shanmugam, the oil companies’ attorney before the high court, declined to comment on the decision. Shanmugam chairs the Supreme Court and appellate practice group at Paul, Weiss, Rifkind, Wharton & Garrison LLP in Washington.
Gorsuch was joined in the opinion by Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Stephen G. Breyer, Elena Kagan, Brett M. Kavanaugh and Amy Coney Barrett
In dissent, Justice Sonia Sotomayor assailed the court for violating the longstanding rule that a district judge’s remand order is generally not subject to appellate review.
“Unfortunately, I fear today’s decision will reward defendants for raising strained theories of removal … by allowing them to circumvent the bar on appellate review entirely,” Sotomayor wrote. “Meanwhile, Baltimore, which has already waited nearly three years to begin litigation on the merits, is consigned to waiting once more.”
Justice Samuel A. Alito Jr. recused himself from the case. Alito did not publicly disclose the reason for his recusal.
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.
The high court rendered its decision in BP PLC et al v. Mayor and City Council of Baltimore, No. 19-1189.