Supreme Court Climate Case Ruling Could Affect State, County and City Lawsuits

U.S. Supreme Court

The U.S. Supreme Court on Monday decided a closely watched climate change case involving a technical issue of litigation procedure, holding that federal appeals courts must determine whether any grounds exist to remove government lawsuits seeking compensation for damages caused by greenhouse gas pollution when a fossil fuel corporate defendant argues that a U.S. district court wrongly sent a case back to state court. 

The opinion by Justice Neil Gorsuch could mean that federal courts, when asked to send state- and municipality-driven climate change tort cases back to state courts, will be more likely to consider preemption theories favored by the oil industry. “While the court’s decision addressed a narrow jurisdictional question, it also opens the door for the appellate courts to take on the broader, more substantive arguments that the climate defendants want heard in federal court (and ultimately the U.S. Supreme Court),” said University of Colorado Law School associate clinical professor and Getches-Green Natural Resources, Energy, and Environmental Law Clinic director Jonathan Skinner-Thompson in an email.

Gorsuch’s missive also likely means a continuation of procedural limbo for nearly two dozen city, county and state-led climate change lawsuits now pending in courts around the nation, including one in Colorado filed by Boulder, Boulder County and San Miguel County. U.S. District Judge William Martinez remanded that case to state court in September 2019 after fossil fuel companies had removed it to federal court, an order upheld by the 10th U.S. Circuit Court of Appeals in July. Patrick Parenteau, a professor at Vermont Law School and senior counsel at the South Royalton-based school’s Environmental Advocacy Clinic, said the Supreme Court may, in the aftermath of Monday’s opinion, order the Denver-based appeals court to reconsider that ruling and make a similar demand of the Boston-based 1st U.S. Circuit Court of Appeals in a case filed by Rhode Island.

The likelihood of further jurisdictional skirmishes in all of the city- and state-led climate change cases is very high, according to Loyola University College of Law professor Karen Sokol, an expert in environmental and tort litigation. “The whole strategy has been a war of attrition,” she said, and now appeals courts will need to take the time and entertain the arguments necessary to decide “any of the bases asserted by the industry” for transfer of the cases to federal trial courts, “which are just about every possible basis that it could” claim. 

The 7-1 ruling might also mean the cases now pending in courts around the country will end up being decided by federal judges, who are likely less familiar with the state law-based claims they often assert. The federal courts don’t often address the tort-style averments raised by the cities, counties and states in the climate change cases, which means the complaints “are going to be much easier to dismiss,” Sokol said. 

Monday’s edict involved the federal removal statute, which imposes some limits on when appeals courts can review removal orders. The statute says a U.S. district court “order remanding a case to the state court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the state court from which it was removed” under two specific sections of a title of the U.S. Code “shall be reviewable by appeal or otherwise.” Gorsuch’s opinion determined that consideration of any possible grounds for removal by the appeals court is permissible if the defendant who asked that the case be moved to federal court invoked the two exceptions listed in the statute. 

“Normally, federal jurisdiction is not optional,” Gorsuch wrote. Generally, “courts are obliged to decide cases within the scope of federal jurisdiction assigned to them” and, as a consequence, the district court could not send the case back to state court until it had figured out whether it belonged in federal court. In other words, the district court’s “written direction or command” had to be complete. As a result, Gorsuch wrote, statutory language referring to appellate review of an “order” meant the “whole” of it, “not just some of its parts or pieces.”

Gorsuch used the opportunity afforded by the opinion to cite jurisprudential rules of statutory interpretation favored by the Supreme Court’s majority. Congress did not write into the removal statute a clear prohibition against appellate review of an entire removal order. Therefore, according to the Colorado jurist, judges “are best served by focusing on the language it did employ.” 

Justice Sonia Sotomayor dissented. Sotomayor argued that, under the majority opinion, “the exception” in the removal statute would “swallow the rule.” The removal statute’s language on appeals court scrutiny of lower court orders, she wrote, could be, as the majority held, interpreted as allowing “appellate review of any asserted basis for removal so long as the suit was removed in part” under the two other statutes Congress mentioned in it. “The problem with this interpretation is that it stretches the exception” too much and would, therefore, enable “defendants to bootstrap their entire case for removal into the court of appeals simply by tacking on an argument” under the two referenced statutes. “Indeed, under this interpretation, a defendant could formally abandon its argument” under those statutes and “seek an appeal exclusively of other grounds for removal,” Sotomayor continued. “That bizarre outcome, inexplicable in light of the manifest objective of limiting the exceptions in [the removal statute], cautions heavily against this interpretation.”

Gorsuch made clear that the justices were not, in Monday’s ruling, determining the merits of climate change liability theories advanced by cities and states around the nation. Nevertheless, according to Parenteau, the import of the decision for those bottom lines is significant. “I think the industry is counting on it giving them a stronger argument on preemption,” Parenteau said. “If you look at Judge Alsup’s decision and the decision of the 2nd Circuit in the New York City case, I think there’s some credence to the industry’s strategy,” he said, referencing a 2018 decision by Judge William Alsup of the U.S. District Court for the Northern District of California in a case filed by the cities of Oakland and San Francisco against an array of oil giants and a ruling earlier this year by a federal appeals court in a case called City of New York v. Chevron Corp.

Alsup ruled, in a decision later reversed by the 9th U.S. Circuit Court of Appeals, that the cities’ nuisance case should be dismissed because they would have to be pressed under federal common law, a rare nuance of the nation’s jurisprudence, and implicate international relations. “[F]ederal courts should exercise great caution before fashioning federal common law in areas touching on foreign affairs,” Alsup wrote. In essence, Alsup ruled that it would be pointless to send the Oakland and San Francisco lawsuit back to state court because the state law claims could not be allowed to proceed. His rationale was built on the pillars of both preemption and the presumption against extraterritorial application of American law. 

A coalition of fossil fuel behemoths have asked the Supreme Court to review the 9th Circuit decision that threw out Alsup’s conclusion. Sokol said she thinks a decision to grant certiorari in that case could give the justices a chance to foreclose all state common law claims in the climate change context. “I think it will end up before the court one way or the other,” Sokol said. “Whether it’s through the Oakland case or, say the 4th Circuit, on remand, rejects this federal basis of removal, industry, I have no doubt, will petition the Supreme Court to review that.” If the justices agree to do so, she said, a “really problematic” situation could result, one in which the court finds that no remedy for financial harm to cities and states from atmosphere- and ocean-warming gases emitted by the combustion of the industry’s products can be obtained.

Parenteau, on the other hand, thinks it’s more likely the industry will have to wait until it is forced to defend the various state law claims advanced by cities and states on their merits before arguing preemption. “If you’ve got a preemption claim, that’s a defense,” he said. “That’s not a jurisdictional question.” He said the oil industry has argued for the application of a doctrine called “absolute preemption,” but that the concept is unlikely to fit the climate change cases. “The problem for the industry,” he continued, is that “the Clean Air Act has a savings provision,” which preserves state law claims, “so [there] can’t be absolute preemption.”

Sokol agrees but worries the Supreme Court might be tempted to expand federal common law to preclude the tort allegations advocated by the cities and states in the climate change cases. If judges decide that no state’s tort law, including the deceptive marketing claims that are at the core of some of the climate change cases, can be applied to the oil industry defendants, Sokol said, they would in effect be reversing a nearly century old hallmark of U.S. law that sharply constrains federal judge-made law not based on statutes or agency regulations. “It would be such a tremendous power grab on the part of the federal courts,” she said. “They would essentially be resurrecting federal common law. And it would be a new type of federal common law claim.”

Parenteau thinks Congress might be well-advised to correct Monday’s ruling, at least if it actually does not “want federal courts creating an opportunity for people to game the system this way and allege a whole bunch of different grounds for why” the climate change cases should not be litigated in state court. He is not optimistic that the national legislature will do so. “Congress could fix it, but I don’t think it will,” he concluded.

The case is BP P.L.C. et al. v. Mayor and City Council of Baltimore, No. 19-1189.

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