By Karen Savage
When the Supreme Court agreed to review Baltimore’s climate liability suit on a seemingly small legal question, it left a litany of lingering questions, including how it will impact the dozens of similar cases filed by municipalities across the country and whether it will slow the wave of new filings.
Experts, however, say the court’s eventual ruling could have far wider impacts on liability cases of all kinds and agree that the delay alone helps the fossil fuel companies in these lawsuits. The companies have filed a continuous stream of appeals to keep this and similar suits from proceeding in state courts.
The high court threw this particular wrench into the works earlier this month when it granted a petition from ExxonMobil, Chevron, Shell, BP and nearly two dozen other fossil fuel companies. It agreed to decide if appellate courts can review certain lower court rulings related to whether a case will be heard in federal or state court.
Nearly all of the dozens of cases filed against the industry alleging it should be held accountable for its role in climate change are wrestling with this issue of jurisdiction. The companies are fighting fiercely to have them heard in federal courts, which have traditionally punted climate-related cases to the legislative and executive branches of government. The municipalities want them heard in state courts, where they were filed alleging violations of state laws and where they believe they are more likely to win.
While the high court will not address the merits of Baltimore’s case—whether the fossil fuel companies should pay for the damages caused by climate change, caused overwhelmingly by the burning of their products—the outcome of their jurisdiction decision could have major implications for nearly all of the climate change-related cases filed since 2017.
“Any of the cases that are currently on appeal, or that there’s no recent appellate decision on, could potentially be affected by this,” said Sean Hecht, co-executive director of the Emmett Institute on Climate Change and the Environment at the UCLA Law Environmental Law Clinic.
Even if Baltimore wins this round of arguments, the process of bringing their case to trial could take years longer. And the climate damages they want the companies to pay for will continue to pile up.
“Imagine that the cases don’t actually start moving forward on their merits until 2022 or 2023,” Hecht said. “That delay is significant—it favors the defendants in the case to have that delay.”
The Legal Question
Baltimore filed suit in Maryland state court in 2018, alleging that the companies knew for decades that their products drive climate change, but deliberately failed to inform the public about those risks. The city is charging the companies with eight state-law violations, including public nuisance, private nuisance, failure to warn and violations of Maryland’s consumer protection laws.
Like Baltimore’s, most climate change-related lawsuits filed since 2017 have been tort lawsuits, which for the most part, are heard in state court.
“The idea is, most cases belong in state court if they’re brought as tort lawsuits, because most of this a lot of state law and there’s limited exceptions where cases like this can be brought in federal court,” said Hecht, who has consulted on behalf of the plaintiffs in some of the California cases.
The law, however, allows defendants to move, or remove, cases to federal court if they think they involve federal issues. If plaintiffs feel the case has been wrongly removed, they have the right to ask the federal court to return, or remand, the case to state court.
The fossil fuel companies have moved nearly all of the cases to federal court, and the municipalities have been fighting to get them back in state court .
The companies have presented several arguments to support the jurisdictional change, including the contention that because they sold or extracted fossil fuels under government contract, they operated as federal officers. The Federal Officer Removal Statute gives federal courts jurisdiction over civil actions directed at the United States or any federal official.
In Baltimore’s case, the U.S. District Court rejected all of the companies’ arguments and the Fourth Circuit affirmed that decision, but said it was only allowed to review the federal officer removal argument, which it rejected.
The question now before the Supreme Court is whether the appellate court was correct to consider only that argument, or to review all the companies’ claims.
Both parties agree that if presented alone, the other arguments are not reviewable, but the companies contend that because they were presented along with the federal officer removal argument—which is eligible for appellate review—they too should have been reviewed.
“A ruling favorable to the defendants in this case, creates a lot of potential for similar kinds of activity across a lot of different types of cases,” Hecht said.
Federal Officer Removal
For most removal arguments, the federal court’s decision is final and not eligible for appellate review—but Congress provided the right to appeal for two specific situations, Hecht explained.
“One of those instances is in a civil rights-type case where if a motion to remand is granted, that is appealable and the other is federal officer jurisdiction,” Hecht said. “If you think about what these have in common is about the possibility that local courts might be prejudiced against certain types of plaintiffs.”
State civil rights cases often faced monumental hurdles, particularly in the South.
“Back in the 1960s, we would see civil rights cases, and everybody knew you didn’t want to bring a civil rights case in the state court in Alabama, the federal courts were the jurisdiction that needed to hear those cases because of the possibility of local prejudice,” Hecht said. “There’s a similar thought about the federal officer idea, that if somebody is actually working for the federal government, they might not get a fair shake in the state court.”
“What the defendants are now asking is basically something that kind of bootstraps these very limited exceptions to this rule to say, ‘Well, once you just make that claim, then all of the grounds for removal are appealable,’” Hecht said.
If the Supreme Court rules in the fossil fuel companies’ favor, the decision will have ramifications beyond climate change-related litigation and could provide a new strategy for defendants facing certain types of litigation in state courts; to present a weak federal officer argument simply because it could ensure review of other arguments that are otherwise unreviewable.
“This case is a good illustration of that—it’s kind of ridiculous for these oil companies to claim that they were acting as federal officers when they got a permit to drill for offshore oil or something like that—but having made that claim, they now get to spend years appealing the result of the case,” Hecht said.
Effect on Existing Cases
If the court sides with Baltimore, it will place the city’s case—and likely all similar cases—squarely in state court once and for all.
“If Baltimore wins, the case goes to state court and discovery begins,” Pat Parenteau, professor of environmental law at the Vermont Law School said. “The other cases in the Ninth, Tenth and First Circuits would also go to state court with a similar scenario.”
If that happens, the battle will likely move away from jurisdiction and on to the process of discovery, which could be even more contentious because the municipalities will be digging for evidence about what the companies knew about climate change and when, as well as how they handled that information.
“The plaintiffs’ lawyers are already preparing for a bruising discovery battle and motions to dismiss,” Parenteau said.
Most legal experts believe moving forward in state court would favor the plaintiffs, who maintain they have strong cases based on state laws.
“It’s a ruling that would be obviously frustrating to the oil companies because then they will start having to defend against these cases on their merits in state court,” Hecht said.
Even if the Supreme Court sides with the companies, it will still be up to the appellate courts to decide where Baltimore’s case will ultimately be heard.
“If the companies win, the case goes back to the Fourth Circuit to consider all the possible grounds for removal beyond federal officer,” Parenteau said. ”I don’t think there is any merit to the other bases for removal, but it will take time to sort out and that means a significant delay in moving the cases forward.”
A ruling in favor of the companies will also allow for review of similar arguments in the Colorado and California cases, Rhode Island’s case, and potentially in cases more recently filed by Minnesota, D.C., Connecticut, Hoboken, Delaware, and Charleston.
“If the Supreme Court says, ‘No, no, you have to look at all the different grounds for removal on appeal’, that means there will be a whole other round of briefing in the appellate courts about the validity of each of the grounds of removal,” Hecht said.
“There’s also a possibility ultimately that the courts will find one of the other grounds was valid and keep the cases before the federal court,” Hecht said.
Will Municipalities Keep Filing Cases?
What effect, if any, the pending review will have on new filings is yet to be seen, but if Maui County is any indication, new case filings will continue. The county filed a lawsuit against Exxon, Shell, Chevron, BP and more than a dozen other companies on Monday, just days after the Supreme Court agreed to review Baltimore’s case.
“If we were to get an appellate court ruling that solidly says that the removal of these cases is proper and that they’re going to end up being litigated in federal courts, I think it would be a big deterrent to local governments feeling like it made sense to move forward,” Hecht said. “But again, so far we’ve seen the opposite, we’ve seen federal courts of appeals so far, just formally sending the cases back to state court.”
As damages from wildfires, hurricanes and other disasters made worse by climate change soar and as municipalities face the staggering costs of infrastructure improvements needed to protect residents and municipal assets from future climate impacts, experts say more lawsuits are likely.
“The fact that there have been new recent cases filed means to me that people are just moving ahead with these cases despite the procedural hurdles—these hurdles have been there since the beginning,” Hecht said.
Cases have evolved in the years since Baltimore’s case was filed and that evolution is likely to continue regardless of the high court’s ruling, Parenteau said.
“The most recent cases filed by Minnesota and Connecticut are based on consumer protection laws, not nuisance or other torts like the others,” Parenteau said. “That is an interesting development and avoids a lot of the federal removal questions, since they are not seeking damages for climate change or arguing about emissions—they are strictly state law claims with no federal nexus at all.”
Of course, that doesn’t mean the companies still won’t trot out the federal officer removal statute. Exxon, BP, Chevron and Shell on Friday cited the statute in an effort to get D.C.’s climate fraud suit—which is based solely on the district’s consumer protection laws—heard in federal court.
It will likely take a Supreme Court ruling to shake their reliance on it as an argument in climate cases.