City & County of Honolulu v. Sunoco LP

The Hawai‘i Supreme Court affirmed a trial court’s denial of oil and gas companies’ motions to dismiss the City and County of Honolulu and Honolulu Board of Water Supply’s (Honolulu’s) common law claims seeking to hold the companies liable for allegedly deceptive marketing and failure to warn of the climate change impacts of their products. With respect to the motion to dismiss for lack of personal jurisdiction, the court concluded that the minimum contacts test for specific jurisdiction was satisfied. First, the court found that Honolulu’s claims “arise out of” or “relate to” the defendants’ sale and promotion of oil and gas in the state. Second, the court found that the seven-factor test for determining whether exercise of specific jurisdiction was reasonable weighed heavily in favor of concluding it was reasonable. In particular, the court found that Hawai‘i had a “significant interest” in providing its residents “with a convenient forum for redressing injuries inflicted by out-of-state actors.” Third, the court rejected the companies’ contention that due process also required “clear notice” that the defendants could be subject to specific jurisdiction. With respect to the companies’ motion to dismiss for failure to state a claim, the court held that neither federal common law nor the Clean Air Act preempted Honolulu’s claims. The court first concluded that because the Clean Air Act displaced federal common law claims regarding interstate pollution abatement and damages, the federal common law could not govern in this case and could not preempt Honolulu’s claims; only the Clean Air Act could preempt the claims. The court further found that federal common law preemption arguments would fail, even if federal common law was not displaced, because Honolulu did not seek to regulate emissions. The court also found that the defendants waived any argument seeking to expand federal common law to tortious marketing and that, in any event, such an argument would fail because regulation of marketing conduct is traditionally a state-governed area. Finally, the court held that the Clean Air Act did not preempt Honolulu’s claims under any theory of substantive preemption (express, field, or conflict).

On August 17, 2023, the Hawai‘i Supreme Court <a href="https://www.courthousenews.com/fossil-fuel-giants-fight-for-dismissal-of-climate-change-liability-suit/">heard</a> oral argument in fossil fuel companies’ appeal of the denial of their motions to dismiss the City and County of Honolulu’s action seeking to hold the companies liable for an alleged “multi-decadal campaign of deception and disinformation that succeeded in delaying the transition to a lower carbon economy that … could have avoided the worst” of climate change-related effects.

On March 31, 2023, the Hawai‘i Supreme Court granted a request by City & County of Honolulu and the Honolulu Board of Water Supply (Honolulu) that the Supreme Court hear fossil fuel companies’ appeal of a Hawai‘i Circuit Court’s denial of motions to dismiss Honolulu’s claims seeking to hold the companies’ liable for an alleged “multi-decadal campaign of deception and disinformation that succeeded in delaying the transition to a lower carbon economy that … could have avoided the worst” of climate change-related effects. Honolulu argued that transfer of the appeal from the intermediate appellate court was mandatory because the appeal presented one or more questions “of imperative or fundamental public importance.” In particular, Honolulu argued that the appeal “implicates the authority of political subdivisions to seek remedies for injuries to their residents’ constitutionally guaranteed interests in the State’s natural resources caused by corporate misconduct.” Honolulu characterized the appeal as presenting questions of “first impression” and “novel legal questions[s]” about both personal jurisdiction and the application of Hawai‘i tort law.

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On March 5, 2021, the court denied the companies’ motion to stay the remand order but delayed transmission of the order to the state court for 10 days to allow the companies to seek relief in the Ninth Circuit.

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On March 5, 2021, the court denied the companies’ motions to stay the remand order but delayed transmission of the order to the state courts for 10 days to allow the companies to seek relief in the Ninth Circuit.

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On January 13, 2025, the U.S. Supreme Court denied two petitions for writ of certiorari in which fossil fuel companies sought review of the Hawai‘i Supreme Court’s decision allowing the City and County of Honolulu to proceed with its climate change-based claims against the defendants. Justice Alito did not participate in the consideration or decision of the petitions.

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The Solicitor General of the United States submitted a brief to the Court expressing the U.S.’s view that the Court should deny the certiorari petitions. The Solicitor General argued that the Supreme Court did not have jurisdiction to review the Hawai‘i Supreme Court’s interlocutory decision because it was not a final judgment and did not qualify for treatment as final based on an exception for cases in which the state courts have finally decided the federal issue and the parties seeking review might prevail on nonfederal grounds in further proceedings and where reversal of the state court ruling on the federal action would preclude the further litigation and the refusal to immediately review the state court decision “might seriously erode federal policy.” The Solicitor General also argued that the merits did not warrant the Court’s review at this time because the Hawai‘i Supreme Court had correctly rejected the petitioners’ reliance on federal common law and also correctly determined that the Clean Air Act did not preempt Honolulu’s claims. The Solicitor General distinguished other cases, including the Second Circuit’s 2021 decision affirming dismissal of <a href="https://climatecasechart.com/case/city-new-york-v-bp-plc/">claims brought by New York City</a> against fossil fuel company defendants.

On April 24, 2023, the U.S. Supreme Court denied fossil fuel industry defendants’ petitions for writ of certiorari seeking review of decisions affirming remand orders that sent climate change cases brought by state and local governments back to state courts. The fossil fuel companies had asked the Court to consider whether there was federal jurisdiction over state-law claims seeking redress for injuries allegedly caused by the effects of interstate or transboundary greenhouse gas emissions on the global climate because federal common law necessarily governs such claims. The petition in cases brought by the City and County of Honolulu and the County of Maui also presented a question regarding the application of the federal officer removal statute. Justice Alito did not participate in the consideration of or decision on the petitions.

Briefing was completed for the petition for writ of certiorari in Honolulu's and Maui County's cases on February 22, 2023. The petition was distributed for the justices’ March 17 conference and had not been rescheduled as of March 1.

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The Ninth Circuit granted fossil fuel companies’ motion to extend their time for filing opening briefs in their appeals of remand orders in cases brought by the County of Maui and the City and County of Honolulu. The parties agreed that the deadline for opening briefs should be extended to July 19, 2021 because the Supreme Court’s decision in Baltimore would determine the scope of issues before the Ninth Circuit.

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Fossil fuel companies appealing the District of Hawaii’s remand order in cases brought by the City and County of Honolulu and the County of Maui asked the Ninth Circuit for a 60-day extension of time in which to file their opening brief. They sought the extension to allow them to address the Supreme Court’s forthcoming decision in BP p.l.c. v. Mayor & City Council of Baltimore, which the companies said would determine whether the defendants were limited to contesting only the district court’s rejection of jurisdiction under the federal-officer removal statute. Maui and Honolulu oppose the extension request.

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Noting that it was not writing on a “blank slate” and citing its earlier decision in County of San Mateo v. Chevron Corp. as well as decisions of the First, Fourth, and Tenth Circuits, the Ninth Circuit Court of Appeals found that fossil fuel company defendants could not show federal jurisdiction in climate change lawsuits brought by the City and County of Honolulu and the County of Maui. The Ninth Circuit therefore affirmed the remand of the cases to state court. At issue in these appeals were jurisdiction under the federal-officer removal statute, federal enclave jurisdiction, and jurisdiction under the Outer Continental Shelf Lands Act (OCSLA). Regarding federal-officer removal jurisdiction, the Ninth Circuit rejected arguments that the defendants acted under federal officers in connection with production of oil and gas under the Defense Production Act, when they repaid offshore oil leases in kind and contracted with the government to operate the Strategic Petroleum Reserve, when they conducted offshore oil operations, or when they operated the Elk Hills oil reserve. The Ninth Circuit further found that even if the defendants did operate under a federal officer, they failed to cite federal defenses that stemmed from official duties and were colorable. Regarding federal enclave jurisdiction, the Ninth Circuit said the defendants’ oil and gas operations on federal enclaves were too remote from the plaintiffs’ asserted injuries (i.e., climate change harms arising from the defendants’ allegedly deceptive conduct). Regarding OCSLA jurisdiction, the Ninth Circuit found that the companies’ exploration, development, and production on the Outer Continental Shelf was “too attenuated and remote” from the plaintiffs’ alleged injuries. The court said ruling for the defendants would “dramatically expand” OCSLA’s scope and lead to “unstable” results.

The plaintiffs argued that in San Mateo the Ninth Circuit had rejected the same arguments for OCSLA jurisdiction that the defendants advanced in their May 4, 2022 notice of supplemental authority. The plaintiffs also argued that the San Mateo OCSLA analysis confirmed that the defendants failed to establish the “nexus” prong for federal-officer removal, and that the defendants’ new evidence “rehashes” the same sorts of arrangements and relationships that the San Mateo decision rejected as a basis for federal-officer removal.