District of Columbia v. Exxon Mobil Corp.

Citing the “time honored well-pleaded complaint rule,” the D.C. Circuit Court of Appeals affirmed the remand to D.C. Superior Court of the District of Columbia’s lawsuit asserting that fossil fuel industry defendants violated the D.C. Consumer Protection Procedures Act by materially misrepresenting their products’ climate change effects. The D.C. Circuit first found that the “artful pleading” exception to the well-pleaded complaint rule did not apply, rejecting the defendants’ argument that D.C.’s claims necessarily arose under the federal common law of interstate air pollution. The D.C. Circuit also found that the Grable exception to the well-pleaded complaint rule—which provides for federal jurisdiction when a claim necessarily raises a substantial and actually disputed federal issue that is capable of resolution in a federal court without disrupting the federal-state balance—did not apply because no federal issue was necessarily raised. The court rejected the defendants’ contention a federal issue was necessarily raised because the consumer protection claim would contravene federal law affirmatively promoting fossil fuel use. The D.C. Circuit also held that removal was not authorized under the federal officer removal statute because D.C.’s lawsuit was not “for or relating to” actions taken by the defendants “under color of federal office,” whether those actions were production of aviation fuel and other essential military products, compliance with orders of the Petroleum Administration for Defense, or ongoing commercial relationships between the defendants and the federal government. In addition, the D.C. Circuit found that there was not jurisdiction under the Outer Continental Shelf Lands Act because D.C.’s misrepresentation claims did not “aris[e] out of” or “in connection with” the defendants’ operations on the Outer Continental Shelf.

The D.C. Circuit Court of Appeals scheduled oral argument regarding fossil fuel companies’ appeal of a remand order in D.C.’s climate change consumer protection case for May 8, 2023 at 9:30 AM.

On January 30, 2023, the D.C. Circuit Court of Appeals denied fossil fuel companies’ emergency motion for a stay pending appeal of a district court’s order remanding to D.C. Superior Court the District of Columbia’s lawsuit alleging that the companies violated D.C.’s consumer protection law by misleading consumers about their products’ contribution to climate change. The D.C. Circuit found that the companies had not met the “high standard” for demonstrating irreparable injury, noting that even “substantial and unrecoupable” litigation expenses would not meet that standard. The D.C. Circuit also found that the companies did not show a “likely,” as opposed to “possible,” injury from potential deprivation of their right to proceed in federal court. The D.C. Circuit set an expedited briefing schedule for the companies’ appeal of the remand order, with the opening brief due on March 1, D.C.’s brief due on March 31, and the companies’ reply brief due on April 12. On February 15, the federal district court remanded the case to D.C. Superior Court.

On December 23, 2022, the D.C. Circuit granted the companies’ request for an administrative stay of the remand order pending the D.C. Circuit’s consideration of the companies’ emergency motion for a stay pending appeal. Briefing on the emergency motion was scheduled to be completed by January 20.