City of Oakland v. BP p.l.c.

On June 14, 2021, the U.S. Supreme Court denied fossil fuel companies’ petition for writ of certiorari seeking review of the Ninth Circuit’s decision reversing the district court’s 2018 denial of Oakland’s and San Francisco’s motions to remand their climate change nuisance cases to California state court. The petition had requested that the Court consider the questions of “[w]hether putative state-law tort claims alleging harm from global climate change are removable because they arise under federal law” and “[w]hether a plaintiff is barred from challenging removal on appeal after curing any jurisdictional defect and litigating the case to final judgment.” The cities’ renewed motion for remand is currently pending in the district court, with the cities arguing against the companies’ remaining grounds for removal: federal-officer removal, Outer Continental Shelf Lands Act, enclave jurisdiction, and bankruptcy removal. The cities also have filed a motion to amend their complaints to withdraw federal common law public nuisance claims that they added after the district court denied remand.

Briefing was completed on the fossil fuel companies’ petition for writ of certiorari, and briefs were distributed for the justices’ June 10, 2021 conference.

In their brief opposing certiorari, the cities framed the questions presented as “[w]hether a California state law public nuisance claim alleging wrongful and deceptive promotion of hazardous consumer goods ‘arises under’ a congressionally displaced body of federal common law regarding interstate air pollution for purposes of removal jurisdiction” and “[w]hether respondents waived their right to appeal an erroneously denied remand motion by filing an amended complaint to conform to that erroneous ruling while expressly preserving their appellate rights, and then opposing petitioners’ motion to dismiss that amended complaint.” The cities argued that no existing federal common law “governs” their claims under the California representative public nuisance law, and that the Ninth Circuit’s application of the well-pleaded complaint rule did not warrant review. The cities also contended that the Ninth Circuit’s application of the Court’s precedent concerning whether post-removal amendment of complaints waived objections did not warrant review. In addition, the cities argued that the questions were not “certworthy” because they “arise in only a tiny category of cases” and because the petition was a “poor vehicle” to review the questions since there had been no final determination on the jurisdictional issue raised.

In an unpublished memorandum, the Ninth Circuit Court of Appeals affirmed the remand to state court of Oakland’s and San Francisco’s climate change cases against fossil fuel companies. Citing its 2022 decisions in <a href="https://climatecasechart.com/case/county-san-mateo-v-chevron-corp/">County of San Mateo v. Chevron Corp.</a> and <a href="https://climatecasechart.com/case/city-county-of-honolulu-v-sunoco-lp/">City & County of Honolulu v. Sunoco LP</a>, the Ninth Circuit found that neither of the grounds for removal that the companies raised on appeal provided a basis for federal jurisdiction. First, the Ninth Circuit found that the companies’ actions during World War II and pursuant to ongoing specialized fuel contracts were actions taken pursuant to “arms-length business agreements,” and that the companies were not “acting under” federal officers, as would be required for removal under the federal officer removal statute. Second, the Ninth Circuit rejected the companies’ argument that the Grable exception to the well-pleaded complaint rule applied because the cities’ claims necessarily raised substantial and disputed First Amendment issues. The court noted that it was settled law that a case cannot be removed to federal court on the basis of a federal defense, even if the complaint anticipates the defense.

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After initially setting a date of November 13 for oral argument in fossil fuel companies’ appeals seeking to reverse the remand to state court of Oakland’s and San Francisco’s climate change cases, the Ninth Circuit Court of Appeals determined that “the facts and legal arguments are adequately presented in the briefs and record, and the decisional process would not be significantly aided by oral argument.”

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In the climate change public nuisance cases brought by Oakland and San Francisco, the federal district court for the Northern District of California rejected the fossil fuel company defendants’ remaining grounds for removal of the cases to federal court. The district court first concluded that it was bound by the Ninth Circuit Court of Appeals’ rulings in the County of San Mateo and Honolulu cases that the connection between the defendants’ alleged conduct on the Outer Continental Shelf and the plaintiffs’ alleged injuries was too attenuated to give rise to jurisdiction under the Outer Continental Shelf Lands Act, even if the district court itself would have found differently if “writing on a clean slate,” given the plaintiffs’ “sustained emphasis and attacks on production and sale of fossil fuels and given the central role of the outer Continental Shelf in America’s oil production.” In addition, the district court found that Ninth Circuit precedent in other climate change cases foreclosed federal enclave jurisdiction and jurisdiction under the federal-officer removal statute. The court also rejected the defendants’ argument that there was federal jurisdiction because the plaintiffs’ claims necessarily raised substantial First Amendment issues. The court vacated its earlier dismissal of four defendants on personal jurisdiction grounds, writing that “both sides deserve a clean slate in state court” but that the vacatur should not be considered as changing the court’s view of the personal jurisdiction issue.

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The Ninth Circuit denied the energy company defendants’ petition for panel rehearing and/or rehearing en banc of its opinion reversing the district court’s determination that federal-question jurisdiction provided a basis for removal. The Ninth Circuit also amended a footnote in the opinion in response to a letter from the district court judge requesting that the Ninth Circuit withdraw the footnote. The district court judge asserted that Ninth Circuit’s opinion misconstrued his decision as relying on admiralty jurisdiction (which the energy companies had not identified as a basis for removal) rather than on federal-question jurisdiction arising out of the navigable waters of the United States. The amended footnote indicated that an argument that there was federal-question jurisdiction because “the instrumentality of the alleged harm is the navigable waters of the United States” failed for the reasons set forth in the section of the Ninth Circuit’s opinion that held there was no exception to the well-pleaded complaint rule.

The United States, as well as the U.S. Chamber of Commerce and 20 states, filed amicus briefs in support of the petition for rehearing. The U.S. argued that whether “arising under federal common law” is a basis for removal and whether the case is governed by federal or state law are issues of “exceptional importance.” The U.S. said the Ninth Circuit’s failure to recognize “arising under federal common law” as a basis for removal conflicted with Ninth Circuit precedent. The U.S. also said rehearing should be granted because the Ninth Circuit “took a wrong turn” when it determined that improper removal could not be excused by the plaintiffs’ subsequent amendment of their complaint to include a federal claim.