City of Hoboken v. Exxon Mobil Corp.

On October 19, the federal district court in New Jersey ordered that Hoboken’s case be remanded to state court.

On December 15, 2021, the federal district court for the District of New Jersey granted fossil fuel industry defendants’ motion to stay its order remanding the City of Hoboken’s climate change case to state court. Although the district court found that the defendants did not make a strong showing that they were likely to succeed on the merits of their appeal in the Third Circuit and therefore failed to establish that a stay pending appeal was warranted, the court concluded that factors such as consideration of judicial economy and conservation of resources favored granting a stay using the court’s inherent power to control its own docket.

A federal district court in New Jersey granted the City of Hoboken’s motion to remand to state court its climate change lawsuit against oil and gas companies. As a threshold matter, the court found that it would not be prudent to wait for federal courts of appeal to issue decisions in fossil fuel companies’ appeals of remand orders in other climate change cases. The court noted that it had no indication of when the courts of appeal would address the issues and, “[c]ritically,” that no such appeal was pending in the Third Circuit. On the merits of removal, the court first found that none of the exceptions to the well-pleaded complaint rule applied. The court held that the City’s claims were not completely preempted by the Clean Air Act and also was not persuaded by the companies’ argument that the claims necessarily arose under federal common law. The court found that, as pled, the complaint was “premised solely on state law” and that City of New York v. Chevron Corp.—in which the Second Circuit affirmed dismissal of New York City’s climate change case against oil and gas companies—“merely suggests that Defendants may ultimately prevail with their federal preemption defense argument,” not that there was a basis for federal subject matter jurisdiction. The New Jersey court also found no basis for Grable jurisdiction, rejecting the companies’ arguments that the City’s claims necessarily raised substantial and actually disputed issues of federal law such as First Amendment issues or issues addressed by federal environmental statutes. The court also found that the “chain of causation” between the defendants’ activities on the outer continental shelf and the City’s claims was “too attenuated” for the Outer Continental Shelf Lands Act to provide a basis for jurisdiction. In addition, the court rejected the federal-officer removal statute, federal enclave jurisdiction, and the Class Action Fairness Act as grounds for removal.

In Hoboken’s case, the City argued that the Second Circuit itself had said that it was addressing a different question than the removability question at issue in a motion for remand. Hoboken also noted the district court’s decision in Minnesota v. American Petroleum Institute and a decision by the Central District of California as recent cases that had recently joined “the ever-growing chorus of courts” rejecting the defendants’ arguments for removal.

Fossil fuel company defendants filed notices about the Second Circuit decision's affirming dismissal of New York City's climate change case in cases where motions to remand were pending, including in cases brought by the District of Columbia, City of Hoboken, City of Oakland, and City and County of San Francisco. The defendants argued that the Second Circuit’s decision confirmed that the plaintiff’s claims necessarily arise under federal law. The defendants also argued that the decision supported their other grounds for federal jurisdiction, including the federal officer removal statute, the Outer Continental Shelf Lands Act, federal enclave jurisdiction, and Grable jurisdiction.

In the City of Hoboken’s case against fossil fuel companies, the companies filed a motion on March 17, 2021 to strike arguments regarding collateral estoppel and a request for fees in Hoboken’s reply because they were raised for the first time.