10th Circuit Affirms Remanding Suncor Case to State Court

an energy plant
The U.S. Supreme Court remanded the Boulder County lawsuit against Suncor Energy back to the 10th Circuit Court of Appeals. On Feb. 8, the 10th Circuit affirmed the district court’s order remanding the action to the state court. / Photo by Jason Blackeye on Unsplash.

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

Boulder County Commissioners, et al. v. Suncor Energy, et al.

The U.S. Supreme Court remanded a lawsuit against Suncor Energy back to the 10th Circuit Court of Appeals, which took another look at the case and issued an opinion on Feb. 8. 

The case went to the 10th Circuit as an appeal of a district court’s order remanding the action to state court. Pursuant to 28 U.S.C. 1447(d), orders remanding removed cases to state court are not appealable “except that an order remanding a case to the state court from which it was removed pursuant to section 1442 [federal officer removal] or 1443 [civil rights cases] of this title shall be reviewable by appeal or otherwise.” 

In a 2020 decision, the 10th Circuit held 1447(d) limited its appellate jurisdiction to review of only the federal officer basis for removal, which was one of six grounds of federal subject-matter jurisdiction advanced in support of removal on appeal. 

But in a 2021 decision in BP P.L.C. v. Mayor & City Council of Baltimore, the Supreme Court rejected that position, holding that when a removal action is appealed under the limited grounds listed in 1447(d), the appellate court has subject-matter jurisdiction over all grounds for removal addressed in the district court’s order. The Supreme Court then granted certiorari in this case, vacated the 10th Circuit’s prior decision and remanded for further consideration in light of its decision in BP v. Baltimore. 

This is a lawsuit about damages related to climate change. The Board of County Commissioners of Boulder County, the Board of County Commissioners of San Miguel County and the City of Boulder say they’ve experienced and will continue to experience harm because of climate change caused by fossil-fuel consumption and rising levels of carbon dioxide in the atmosphere. They also allege they’ve spent and will continue spending millions of dollars to mitigate this harm.

The municipalities argue that Suncor Energy Inc., Suncor Energy Sales, Inc., Suncor Energy, Inc. and ExxonMobil Corporation have contributed significantly to the changing climate in Colorado by producing, marketing and selling fossil fuels. And the municipalities allege the energy companies have continued their fossil-fuel activities even though they knew these activities would change the climate dramatically. The municipalities also allege the energy companies concealed and/or misrepresented the dangers associated with the burning of fossil fuels despite having been aware of those dangers for decades.

On appeal, the energy companies contended there’s federal jurisdiction over the municipalities’ claims, in part, because Exxon and/or its affiliated companies have leased and continue to lease portions of the outer continental shelf of the U.S. to extract fossil fuels.

By the terms of its Outer Continental Shelf Act leases, Exxon is required to conduct drilling “in accordance with” federally approved exploration, development and production plans and conditions. These plans must “conform to sound conservation practices to preserve, protect and develop mineral resources and maximize the ultimate recovery of hydrocarbons from the leased area.” Exxon is obligated to “exercise diligence in the development of the leased area and in the production of wells located thereon;” “prevent unnecessary damage to, loss of, or waste of leased resources;” and “comply with all applicable laws, regulations and orders related to diligence, sound conservation practices and prevention of waste.” 

The leases provide that Department of the Interior officials reserve the right to obtain “prompt access” to facilities and records of private OCS lessees for the purpose of federal safety, health or environmental inspections. The government reserves a right of first refusal to purchase all materials “[i]n time of war or when the President of the United States shall so prescribe.” The government also requires that 20% of all crude or natural gas produced pursuant to drilling leases be offered “to small or independent refiners.”

In this action, the municipalities sued for damages allegedly caused by climate change. They assert a variety of claims under Colorado law, both common law and statutory, against the energy companies. Specifically, the municipalities allege claims of public nuisance; private nuisance; trespass; unjust enrichment; violation of the Colorado Consumer Protection Act; and civil conspiracy. They don’t allege any federal claims.

The municipalities are seeking compensatory damages, remediation and/or abatement, treble damages and costs and attorney fees. The municipalities also ask that the energy companies be held jointly liable under Colorado Revised Statutes13-21-111.5(4) for “consciously conspir[ing] and deliberately pursu[ing] a common plan to commit tortious acts.”

The municipalities don’t ask the court “to stop or regulate” fossil-fuel production or emissions “in Colorado or elsewhere.” They instead request that the energy companies “help remediate the harm caused by their intentional, reckless and negligent conduct, specifically by paying their share of the costs [the municipalities] have incurred and will incur because of [the energy companies’] contribution to alteration of the climate.” 

After the municipalities filed their amended complaint in Colorado state court, the energy companies filed a notice of removal in the U.S. District Court for the District of Colorado. In that notice, they asserted seven grounds for removal. Five of those grounds were under the general removal statute, 28 U.S.C. 1441(a), allowing for removal of “any civil action brought in a state court of which the district courts of the United States have original jurisdiction.” 

Specifically, the energy companies contended that 28 U.S.C. 1331 conferred original jurisdiction over the claims because the municipalities’ claims arose only under federal common law; the Clean Air Act completely preempted the state-law claims; the claims implicated disputed and substantial “federal issues” under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing; the claims arose from incidents that occurred in federal enclaves within the municipalities’ borders; and original federal jurisdiction exists under the OCSLA. 

The energy companies also asserted original federal jurisdiction was available under the federal officer removal statute and the bankruptcy removal statute.

The municipalities filed a motion to remand. In a detailed opinion, the district court rejected all asserted grounds for removal and remanded the action to state court.

The energy companies appealed. They argued that appealing the remand order under the federal officer removal statute gave the 10th Circuit jurisdiction to consider all the grounds for removal asserted, not just federal officer removal. 

On plenary review, the 10th Circuit disagreed and held that its jurisdiction was limited to the federal officer removal question. Concluding that the requirements for federal officer removal had not been satisfied, the 10th Circuit affirmed the district court’s remand order without considering the other grounds for removal.

The Supreme Court has now clarified that in circumstances where federal officer removal is one of multiple grounds for removal, the entire order of remand is reviewable on appeal. The 10th Circuit’s jurisdiction extends beyond the federal officer removal statute to all grounds advanced for federal jurisdiction over the action. 

The 10th Circuit held that none of the six grounds the energy companies assert for removal on appeal are sufficient to establish federal jurisdiction over the municipalities’ state-law claims. It affirmed the district court’s order remanding the action to the state court.

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