Vermont v. Exxon Mobil Corp.

The federal district court for the District of Vermont granted the State of Vermont’s motion to remand to state court the State’s case asserting that fossil fuel company defendants violated the Vermont Consumer Protection Act (VCPA) by engaging in deceptive acts and unfair practices regarding their products’ contributions to climate change. The court noted that its review was guided by the Second Circuit’s September 2023 decision in <a href="https://climatecasechart.com/case/state-v-exxon-mobil-corp/">Connecticut v. Exxon Mobil Corp.</a>, which addressed several of the jurisdictional questions raised in this case and answered them in favor of Connecticut. In Vermont’s case, the district court first found that, as in the Connecticut case, the Grable exception to the well-pleaded complaint rule did not apply because the VCPA claims could be resolved without addressing a federal issue and because no federal issue was necessarily raised. (The well-pleaded complaint rule provides “that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint.”) The district court rejected the defendants’ contentions that Vermont’s claims regarding their advertising practices necessarily raised federal issues regarding compliance with federal environmental and fuel economy standards and that Vermont’s claims also necessarily raised federal policy issues regarding governmental promotion of fossil fuels. Second, the district court rejected the federal common law of transboundary pollution or foreign affairs as a basis for the complete preemption exception to the well-pleaded complaint rule; the court found that the complaint made clear that the case was about deception and unfair business practices in Vermont, not air pollution or international treaties. The court then cited the reasoning of the Second Circuit’s Connecticut decision to reject arguments that there was federal jurisdiction under the federal-officer removal statute or the Outer Continental Shelf Lands Act. In addition, the district court found that there was no federal enclave jurisdiction, rejecting the defendants’ argument that such jurisdiction was appropriate because the complaint alleged statewide climate change harms that would encompass harms in “a few isolated federal enclaves within Vermont” such as national forest and national park lands and ports of entry. In addition, the court found that there was no diversity jurisdiction. The court, however, denied Vermont’s request for costs and fees incurred as a result of removal, finding that the defendants did not lack an objectively reasonable basis for removal.

–

–

The Vermont Superior Court hearing the State’s case against fossil fuel companies under the Vermont Consumer Protection Act (VCPA) denied the defendants’ motions for interlocutory review of the court’s denial of their motions to dismiss. The court rejected the defendants’ contentions that the court’s ruling turned on controlling questions of law, finding that issues identified by the defendants—whether the companies’ statements were within the scope of the VCPA, whether statements constituted commercial speech under the First Amendment, when VCPA claims accrue, the application of the VCPA to wholesale suppliers, and personal jurisdiction—instead involved questions of fact. The court also found that the prong of the interlocutory appeal analysis requiring that an immediate appeal may materially advance the termination of litigation was not satisfied.

A Vermont Superior Court denied fossil fuel defendants’ motions to dismiss the State of Vermont’s action alleging that the defendants violated the Vermont Consumer Protection Act (VCPA) by misrepresenting and concealing fossil fuel products’ contributions to climate change. Vermont alleged three categories of deceptive or unfair acts and practices: (1) climate science disinformation campaigns; (2) deceptive marketing of specific products; and (3) greenwashing campaigns. First, the court found that the State demonstrated a prima facie case of personal jurisdiction against each defendant under Vermont law, citing Vermont Supreme Court and U.S. Supreme Court precedent holding that a forum state may assert personal jurisdiction over companies that deliver their products “into the stream of commerce with the expectation that they will be purchased by consumers” in the state. Second, the court rejected the argument that the “alleged decades-old climate science disinformation campaign falls well outside the statute of limitations” because Vermont consumers should have been aware of the link between fossil fuels and climate change by 2003 at the latest. The court agreed with the State that this action was based not on the link between fossil fuels and climate change but rather on the defendants’ alleged deceptive acts. Regarding the defendants’ arguments that the State failed to state a VCPA claim, the court first concluded that the State sufficiently alleged that the deceptive acts took place “in commerce.” The court also found that determinations of whether defendants’ statements were deceptive or constituted “mere commercial puffery” required further factual development. In addition, the court concluded that the State’s alleged misrepresentations and omissions were material for purposes of the motion to dismiss. In addition, the court found that at this stage, the State had adequately alleged an “agency relationship” between the defendants and American Petroleum Institute (API) as well as the defendants’ direct participation in API’s alleged greenwashing campaigns. The court therefore permitted the State to continue to assert the defendants’ derivative liability based on API statements. The court also concluded that the defendants were not entitled to dismissal on either First Amendment or Commerce Clause grounds. In addition, the court rejected the contention that complaint presented a non-justiciable political question. The court also denied Exxon Mobil Corporation’s request that the court strike Vermont’s request for disgorgement of funds acquired or retained as a result of practices found to be unlawful under the VCPA. The court said the request was premature and, moreover, that Exxon was incorrect that such relief was not authorized.