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Big Oil Seeks full 4th Circuit review in Baltimore’s climate change suit

About two dozen oil companies urged a full federal appeals court Thursday to hear its argument that Baltimore’s multimillion-dollar climate change lawsuit against the industry belongs in federal rather than state court, a procedural contention that appears headed to the U.S. Supreme Court for a second time.

Big Oil’s request for a hearing by the entire 4th U.S. Circuit Court of Appeals followed last month’s decision by a three-judge panel of the court that Baltimore’s claims of environmental harm are rooted in Maryland law and thus belong in state court.

In their bid for full-court review, the companies narrowed what had been a wide-ranging argument to the principal contention that they have a common law right to have their case heard in federal court because the harm they allegedly caused Baltimore arose from their operations outside of Maryland.

The companies cited a 2nd U.S. Circuit Court of Appeals decision last year permitting New York’s similar lawsuit against Big Oil to proceed in federal court because the harm was allegedly caused by interstate emissions.

“The question of whether federal common law governs claims seeking redress for injuries allegedly caused by climate change and are thus removable from state to federal court is an exceedingly important question pending in multiple courts across the nation,” the companies’ lead attorney, Kannon K. Shanmugam, wrote in their bid for full-court, or en banc, review.

“In addressing that issue, the (three-judge) panel not only expressly rejected the 2nd Circuit’s thoughtful decision … but also declined to adhere to numerous Supreme Court decisions holding that federal common law necessarily governs claims seeking redress for injuries allegedly caused by interstate pollution,” Shanmugam added. “Rehearing by the full court is badly needed to correct the panel’s errors, ensure compliance with binding precedent, and avoid a return trip to the Supreme Court.”

Shanmugam is a partner with Paul, Weiss, Rifkind, Wharton & Garrison LLP in Washington.

The city’s lawsuit, filed in 2018 in Baltimore City Circuit Court, seeks millions of dollars in damages for the companies’ 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 have sought 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.

Baltimore will have an opportunity to respond to the companies’ request for the full 4th Circuit’s review.

The 15-member appellate court has not stated when it will vote on the companies’ request.

In its controversial decision, the three-judge panel stated that “the impacts of climate change undoubtedly have local, national, and international ramifications.”

However, “those consequences do not necessarily confer jurisdiction upon federal courts carte blanche,” Judge Henry F. Floyd wrote for the 4th Circuit panel.

“In this case, a municipality has decided to exclusively rely upon state-law claims to remedy its own climate-change injuries, which it perceives were caused, at least in part, by defendants’ fossil-fuel products and strategic misinformation campaign,” added Floyd, who was joined by Chief Judge Roger L. Gregory and Judge Stephanie D. Thacker. “These claims do not belong in federal court.”

The panel’s decision marked the second time the 4th Circuit has sent Baltimore’s lawsuit back to state court.

The appellate court’s first ruling was vacated by the Supreme Court, which ruled last May that the 4th Circuit had erroneously held that federal courts lacked statutory jurisdiction because the oil companies did not act at the direction of a federal officer.

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 three-judge panel held fast to the 4th Circuit’s original order.

“Given the jurisdictional inquiry before us, we take no view on whether Baltimore will ultimately fail or succeed in proving its claims under Maryland law,” Floyd wrote. “We cannot decide those questions. But we are confident that Maryland courts can capably adjudicate claims arising under their own laws that fail to otherwise provide any federal jurisdiction.”

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 a federal officer’s direction.

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 and sent the case back to the 4th Circuit.

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.

Baltimore law firms representing oil companies in the litigation include Baker, Donelson, Bearman, Caldwell & Berkowitz PC; Gallagher Evelius & Jones LLP; Saul Ewing Arnstein & Lehr LLP; Tydings & Rosenberg LLP; Venable LLP; and Womble Bond Dickinson LLP.

The 4th Circuit panel rendered its published decision in Mayor and City Council of Baltimore v. BP PLC et al., No. 19-1644.