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).