County of Multnomah v. Exxon Mobil Corp.

In Multnomah County’s lawsuit against fossil fuel companies, the federal district court for the District of Oregon adopted a magistrate judge’s findings and recommendations and granted the County’s motion to remand the lawsuit to state court. The findings and recommendations rejected the companies’ arguments based on federal question jurisdiction and on diversity jurisdiction. The district court was not persuaded that the magistrate judge applied an erroneous standard to the analysis of the companies’ argument that the County fraudulently joined the only non-diverse defendant. In addition, the court found that the complaint sufficiently alleged facts to state causes of action against the non-diverse defendant, even in the absence of an alleged misrepresentation by that defendant. The district court also was not persuaded that the magistrate improperly disregarded a declaration establishing that the non-resident defendant was not involved in the alleged misrepresentations.

A magistrate judge in the federal district court for the District of Oregon recommended that the court grant the County of Multnomah’s motion to remand to state court its lawsuit seeking damages from fossil fuel companies for climate change’s impacts on public health and infrastructure. The magistrate judge concluded that the Ninth Circuit’s opinions in other climate change cases brought by local governments against fossil fuel companies foreclosed the companies’ arguments that there was federal question jurisdiction. The magistrate further concluded that there was no diversity jurisdiction because a defendant that was licensed to sell fuel products in Oregon had not been fraudulently joined. The magistrate judge also rejected the contention that there was diversity jurisdiction because that defendant had been “procedurally misjoined.”

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Multnomah County filed a motion to remand its case to Oregon state court. The County argued that the defendants failed to establish complete diversity of citizenship; the County contended that the defendants failed to show that in-state defendant Space Age Fuel, Inc. was added to defeat jurisdiction. The County also argued that the defendants should be estopped from relitigating their federal officer removal and First Amendment theory of Grable jurisdiction based on the doctrine of offensive non-mutual collateral estoppel, and that, in any event, the defendants failed to show the case was removable on either of those grounds.