City of Oakland v. BP p.l.c.

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The Ninth Circuit denied the energy company defendants’ petition for panel rehearing and/or rehearing en banc of its opinion reversing the district court’s determination that federal-question jurisdiction provided a basis for removal. The Ninth Circuit also amended a footnote in the opinion in response to a letter from the district court judge requesting that the Ninth Circuit withdraw the footnote. The district court judge asserted that Ninth Circuit’s opinion misconstrued his decision as relying on admiralty jurisdiction (which the energy companies had not identified as a basis for removal) rather than on federal-question jurisdiction arising out of the navigable waters of the United States. The amended footnote indicated that an argument that there was federal-question jurisdiction because “the instrumentality of the alleged harm is the navigable waters of the United States” failed for the reasons set forth in the section of the Ninth Circuit’s opinion that held there was no exception to the well-pleaded complaint rule.

The United States, as well as the U.S. Chamber of Commerce and 20 states, filed amicus briefs in support of the petition for rehearing. The U.S. argued that whether “arising under federal common law” is a basis for removal and whether the case is governed by federal or state law are issues of “exceptional importance.” The U.S. said the Ninth Circuit’s failure to recognize “arising under federal common law” as a basis for removal conflicted with Ninth Circuit precedent. The U.S. also said rehearing should be granted because the Ninth Circuit “took a wrong turn” when it determined that improper removal could not be excused by the plaintiffs’ subsequent amendment of their complaint to include a federal claim.

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A month after the Ninth Circuit reversed a district court’s determination that federal-question jurisdiction provided a basis for the removal of Oakland and San Francisco’s climate change nuisance lawsuits against oil and gas companies, Judge William Alsup of the U.S. District Court for the Northern District of California submitted a letter to the Ninth Circuit “to correct a mistake” in the Ninth Circuit’s opinion. Judge Alsup said a footnote in which the Ninth Circuit “declined to address the extent to which the complaints’ dependence on the navigable waters of the United States afforded removal jurisdiction” incorrectly indicated that his decision relied on admiralty jurisdiction as a basis for removal, a grounds not identified by the companies in their removal notices. Judge Alsup said this footnote “confused federal-question jurisdiction arising out of the navigable waters of the United States with admiralty jurisdiction.” Judge Alsup’s letter asserted that navigable waters “serve as a bedrock of federal common law and federal-question jurisdiction” and requested that the Ninth Circuit withdraw the footnote and address “the merits of the ground on which removal jurisdiction was actually sustained.”

On June 8, 2020, the Ninth Circuit granted the companies’ motion for an extension of time to file a petition for panel rehearing or rehearing en banc in both the Oakland/San Francisco case as well as in County of San Mateo v. Chevron Corp., in which the Ninth Circuit affirmed remand orders. Any petition for rehearing must be filed by July 9.

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In an appeal by Oakland and San Francisco of a district court’s denial of remand in, and dismissal of, their suits, the Ninth Circuit reversed the federal district court’s determination that federal-question jurisdiction provided a basis for removal. The Ninth Circuit remanded for the district court to determine whether there was an alternative basis for jurisdiction. The Ninth Circuit held that the cities’ state-law claim for public nuisance did not arise under federal law because no exception to the “well-pleaded complaint rule” applied. First, the Ninth Circuit found that the cities’ nuisance claim did not raise “a substantial federal question.” The court noted that the companies had contended that the nuisance claim implicated “federal interests” such as energy policy, national security, and foreign policy, but the court said this was not sufficient to establish federal-question jurisdiction even though the question of whether the companies should be held liable and be compelled to abate harms was “no doubt an important policy question.” Second, the Ninth Circuit rejected the companies’ argument that the Clean Air Act completely preempted the cities’ public nuisance claim. The Ninth Circuit also rejected the companies’ argument that the cities waived their arguments in favor of remand by amending their complaint to add a federal common law claim; the Ninth Circuit said the cities’ reservation of rights was sufficient. The Ninth Circuit also rejected the companies’ contention that improper removal could be excused based on “considerations of finality, efficiency, and economy.” The Ninth Circuit concluded that dismissal for failure to state a claim at the pleading stage did not warrant departure from the general rule that a case must be fit for federal adjudication at the time of removal.

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In response to Rhode Island's letter concerning the Fourth Circuit's decision in the Baltimore case, defendant Chevron Corporation asserted that the Fourth Circuit based its determination that federal-officer removal was inapplicable on an incorrect conclusion regarding the focus of Baltimore’s claims. Chevron also said the Ninth Circuit could review all grounds for removal since this appeal was from a final judgment, not just the remand order; Chevron also reasserted the defendants’ contention that Oakland and San Francisco’s amendment of their complaint after the denial of their motion to remand mooted their appeal of the denial.

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Oakland and San Francisco notified the Ninth Circuit of the Fourth Circuit’s decision affirming the remand order in Baltimore's case. They told the Ninth Circuit that the Fourth Circuit had rejected the only basis for federal-officer removal that the defendants-appellees offered in their case.

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Chevron Corporation submitted a letter asserting that the Ninth Circuit’s decision in Juliana v. United States supported the companies’ argument that the climate change claims asserted by local and state governments against the companies “have their source in federal law and therefore belong in federal court.”

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On January 15, the court granted a motion by the United States to participate in the oral argument as amicus curiae in support of affirmance of the dismissal of San Francisco and Oakland’s case.

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The Ninth Circuit Court of Appeals scheduled oral argument in San Francisco and Oakland's appeal for the morning of Wednesday, February 5, 2020. Their appeal was scheduled to be heard with the fossil fuel companies' appeal of remand orders in cases brought by other local governments.

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The Ninth Circuit Court of Appeals granted a motion by oil and gas companies to assign Oakland and San Francisco’s appeal of the district court decisions denying remand and dismissing their climate change nuisance actions to the same panel that will hear the companies’ appeals of the order remanding the County of San Mateo’s and three other climate lawsuits to California state court. The court subsequently notified the parties that it was considering the cases for an upcoming oral argument and asked for information on counsel’s availability in November, December, and January.

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Ten states and the District of Columbia argued that the cases belonged in state court and that the district court’s personal jurisdiction ruling would have “far reaching adverse consequences.”

The Center for Climate Integrity, the Union of Concerned Scientists, and “scholars and scientists with strong interests, education, and experience in the environment and the science of climate change, with particular interest in public information and communication about climate change and how the public and public leaders learn about and understand climate change” indicated that their amicus brief was intended to document what they described as the defendants’ “coordinated, multi-front effort” to conceal their knowledge that “the unabated extraction, production, promotion, and sale of their fossil fuel products would result in material dangers to the public.”

The California State Association of Counties argued that the municipalities’ claims belonged in state court and that personal jurisdiction was proper.

Former U.S. government officials did not take a position on the merits of the lawsuit but argued that the district court had erred when it invoked “diplomatic concerns” as a basis for dismissing the municipalities’ claims.

Law professors with expertise in conflict of laws and foreign relations law argued that the district court erred in applying the presumption against extraterritoriality to the municipalities’ claims and that “judicial caution” in the area of foreign affairs did not apply to the municipalities’ domestic tort claims. They also asserted that there was no foreign affairs preemption in this case.

Scientists and scholars with expertise in climate science submitted a brief to assist the court in understanding “the relevant science and the inevitable adaptation expenses these communities are facing.”

Three local government associations argued that the lawsuits should be remanded or, in the alternative, that the Ninth Circuit should reverse the dismissal of the municipalities’ claims on displacement and separation of powers grounds. They also contended that the district court’s test for specific personal jurisdiction “places an impossible burden on cities seeking to use nuisance to address harms from activities that cross jurisdictional boundaries.”

Natural Resources Defense Council argued that neither federal common law nor the Clean Air Act completely preempted the municipalities’ claims.

Legal scholars with expertise in property and tort law and related areas contended that California courts were “well-equipped” to handle the municipalities’ public nuisance claims and that nuisance law would provide an “efficient remedy” by requiring the defendants “to internalize the costs of any wrongful promotion of fossil fuels.”

Six U.S. senators, including both California senators, contended that the municipalities’ claims were a “classic case or controversy,” “not some abstract political question that is both nonjusticiable and committed to the other branches of government.” They asserted, moreover, that acceptance of the defendants’ separation of powers argument “at face value” would reward the defendants’ “decades-long efforts” to stifle climate change action by Congress, the executive branch, and international bodies and would not be consistent with the public interest or justice for the municipalities.

On March 13, 2019, Oakland and San Francisco filed their opening brief in their Ninth Circuit appeal of the dismissal of their climate change nuisance action against oil and gas companies. They argued first that the district court erred in denying their motion to remand to state court in the absence of complete preemption of their state law public nuisance claim. They argued that their claims were not governed by federal common law and that there was no other basis for removal jurisdiction. Second, the municipalities argued that the district court’s dismissal of the action—based on the “supposedly ‘extraterritorial’ reach” of the claims and potential interference with “foreign policy”—“rested on a mischaracterization” of their public nuisance claims as seeking to regulate or enjoin greenhouse gas emissions. The plaintiffs described their actions as seeking only an equitable abatement remedy to mitigate local harms caused by climate change based on the defendants’ wrongful promotion of their fossil fuel products “while intentionally failing to disclose material information and/or affirmatively making misleading statements about the inevitable, devastating impacts on coastal communities it knew would result from the expanded use of … otherwise lawful products.” The municipalities asserted that their state law nuisance claims “easily survive” a federal preemption defense; that the presumption against extraterritoriality did not apply (or would be overcome if it did apply); and that the claims could be adjudicated without any foreign policy concerns. Finally, the municipalities contended that the court erred in declining to exercise specific personal jurisdiction over four out-of-state companies.

The Ninth Circuit granted Oakland and San Francisco's request for a second extension of time in which to file their opening brief. Their brief is due March 13, 2019; appellees' answering brief is due April 12, 2019; and the optional reply brief is due 21 days after the answering brief.

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The Ninth Circuit granted a motion by Oakland and San Francisco to extend the deadline for filing their opening brief. Their brief was to be filed by February 25, 2019, with the appellees' brief due on March 27 and an optional reply brief due 21 days later.