State v. American Petroleum Institute

On January 24, 2024 (15 days after the U.S. Supreme Court declined to review the Eighth Circuit’s affirmance of the remand order in Minnesota’s case), the federal district court for the District of Minnesota lifted the stay on the case and remanded it to state court.

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A Minnesota District Court denied fossil fuel industry defendants’ motions to dismiss all but one of the claims brought by the State of Minnesota alleging that the defendants misled consumers and the public regarding fossil fuels’ contributions to climate change. The court denied American Petroleum Institute’s and ExxonMobil defendants’ motions to dismiss for lack of personal jurisdiction, concluding both that the defendants consented to general jurisdiction by registering to conduct business in the state and also that specific personal jurisdiction was consistent with the notion of fair play and substantial justice. The court rejected the defendants’ contentions that federal common law or the Clean Air Act preempted the State’s claims. The court concluded that the Clean Air Act had displaced federal common law governing interstate air pollution but further concluded that even if federal common law still existed it would not preempt the state law consumer deception and failure-to-warn claims, which were not attempts to regulate transboundary air pollution. In addition, the court held that the Clean Air Act did not preempt the state law claims based on conflict preemption because the State’s claims of failure to warn and deceptive marketing would not interfere with Congress’s objective of federal regulation of air pollution under the Clean Air Act. The court also rejected the argument that the foreign affairs doctrine preempted the State’s claims, finding that the claims would not be an obstacle to climate change-related negotiations with foreign nations. In addition, the court found that the case did not present nonjusticiable political questions and that the dormant Commerce Clause did not preclude the State’s claims. The court also found, at the pleadings stage, that the First Amendment did not protect the defendants’ allegedly misleading and fraudulent speech. In addition, the court declined to dismiss the State’s claims as time-barred. The court also found that the State sufficiently pled that the defendants’ alleged deception resulted in climate-related harms; sufficiently pled a failure to warn; alleged fraud with sufficient particularity; and sufficiently pled misrepresentation, fraud by omission, and intent to deceive. The court found that the State did not sufficiently allege that the defendants’ statements were made “in connection with the sale of any merchandise” and therefore did not State a claim under the Minnesota Consumer Fraud Act. But the court found that the State did adequately state statutory consumer fraud claims under the Minnesota Deceptive Trade Practices Act and the Minnesota False Statement in Advertisement Act and had sufficiently alleged a conspiracy. The court also rejected an argument that Minnesota’s anti-SLAPP (Strategic Litigation Against Public Participation) barred the State’s case. The court concluded that the anti-SLAPP law did not apply to enforcement actions brought by the Attorney General.

The U.S. Supreme Court denied fossil fuel industry defendants’ petition for writ of certiorari seeking review of the Eighth Circuit Court of Appeals affirmance of an order remanding to state court the State of Minnesota’s lawsuit seeking to hold the defendants liable for climate change harms. Justice Kavanaugh would have granted the petition.

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