County of San Mateo v. Chevron Corp.

In the cases brought by County of San Mateo, two other California counties, and three California cities, the Supreme Court granted the fossil fuel companies' petition for writ of certiorari seeking review of the Ninth Circuit's decision affirming the district court's remand order. The Court vacated the Ninth Circuit's judgment in the case and remanded for further consideration in light of its decision in BP p.l.c. v. Mayor & City Council of Baltimore holding that the Fourth Circuit should have reviewed grounds for removal other than the federal officer removal statute. Justice Alito did not take part in the consideration of the case.

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. Justice Alito did not participate in the consideration of or decision on the petitions.

Briefing was completed on February 14, 2023 for fossil fuel companies’ petition for writ of certiorari seeking review of the Ninth Circuit’s affirmance of remand orders in cases brought by the County of San Mateo and other California local governments. The case originally was distributed for the justices’ conference on March 3 but was rescheduled on February 27; a new date was not noted on the docket.

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San Mateo and Marin Counties and the City of Imperial Beach appealed the order of a federal bankruptcy court in Missouri enjoining them from pursuing their climate change lawsuits against the coal company Peabody Energy Corporation.

A federal bankruptcy court in Missouri enjoined San Mateo and Marin Counties and the City of Imperial Beach (the plaintiffs) from pursuing their climate change lawsuits against Peabody Energy Corporation (Peabody). The plaintiffs alleged that Peabody (and a number of other fossil fuel companies) caused greenhouse gas emissions that resulted in sea level rise and damage to their property. Peabody, a coal company, filed for bankruptcy in April 2016 and emerged from bankruptcy under a plan that became effective on April 3, 2017. As an initial matter, the bankruptcy court said the plaintiffs had not established any basis for a claim because the complaints’ only Peabody-specific allegations were that Peabody had exported coal from terminals or ports in several California counties and was a member of organizations that plaintiffs said denied climate change. The court further concluded, however, that even assuming claims did exist, the claims were pre-bankruptcy petition claims that had been discharged under the bankruptcy plan because the plaintiffs had not filed proofs of claim. The court determined, moreover, that even if the plaintiffs’ claims could be construed as post-effective date claims (i.e., claims concerning conduct and harm after Peabody emerged from bankruptcy), the claims did not fall within the scope of a settlement with the U.S. Environmental Protection Agency (EPA) and other governmental entities to allow continued enforcement of environmental laws related to ongoing mining operations. The bankruptcy court also rejected the plaintiffs’ argument that one of their nuisance claims did not constitute a “Claim” or “Liability” pursuant to the Bankruptcy Code and Peabody’s bankruptcy plan and therefore could not be discharged and enjoined.

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The court issued an order clarifying the stay of remand was intended to remain in place until the mandate issued and that the companies could have requested an additional stay.

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On June 30, 2022, the court granted the companies motion to stay issuance of the mandate pending the filing and disposition of a petition for writ of certiorari in the Supreme Court.

In a motion to stay the mandate, fossil fuel companies argued that the Ninth Circuit’s decision affirming the remand order had “deepened an entrenched circuit split and is in significant tension with longstanding Supreme Court precedent” related to “whether nominally state-law claims that, because of our constitutional structure, are necessarily and exclusively governed by federal law alone, are removable to federal court.” The companies further argued that the potential harm posed by remand of the six cases to four different state courts justified stay of the mandate.

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A federal district court in Missouri upheld a bankruptcy court’s order requiring the San Mateo and Marin Counties and the City of Imperial Beach (the plaintiffs) to dismiss their climate change lawsuits against the reorganized Peabody Energy Corporation (Peabody). Peabody, a coal company, filed for bankruptcy in 2016 and emerged from bankruptcy in April 2017. The plaintiffs filed their lawsuit against Peabody and other defendants in July 2017. The district court found that Peabody’s Chapter 11 bankruptcy plan discharged the plaintiffs’ claim under California’s public nuisance statute because not only equitable but also legal relief was available to the plaintiffs for an alleged breach of the statute. The district court also found that the bankruptcy court did not abuse its discretion in determining that the plaintiffs’ other claims were not exempt from discharge.