Minnesota v. American Petroleum Institute

The Eighth Circuit Court of Appeals affirmed the remand to state court of the State of Minnesota’s climate change lawsuit against fossil fuel industry defendants. In doing so, the court noted that it was joining five of its sister circuits in rejecting arguments for federal jurisdiction in climate change litigation brought by state and local governments. The Eighth Circuit concluded that Minnesota’s case—which asserts state common law fraud claims and violations of Minnesota consumer protection statutes—did not arise under federal law because the exceptions to the well-pleaded complaint rule for complete preemption and cases necessarily raising substantial and disputed federal questions (Grable jurisdiction) did not apply. With respect to complete preemption, the Eighth Circuit held that federal common law on transboundary pollution did not preempt Minnesota’s claim. Regarding Grable jurisdiction, the Eighth Circuit found that the defendants failed to identify elements of Minnesota’s claims that required a court to interpret federal common law or to “second-guess Congress’s cost-benefit rationales in allowing the production and sale of fossil fuels.” The Eighth Circuit also rejected other grounds for federal jurisdiction. First, the court found that requirements for jurisdiction under the Outer Continental Shelf Lands Act (OCSLA) were not met because the alleged “misinformation campaign” was not an “operation” carried out on the Outer Continental Shelf and, in any event, the case did not have the requisite nexus to the defendants’ fossil fuel production on the Outer Continental Shelf. Second, the Eighth Circuit found that the case was not removable under the federal officer removal statute because the connection between Minnesota’s claims and any action under the direction of a federal officer (e.g., military fuel production, operations on the Outer Continental Shelf, and participation in strategic petroleum infrastructure) was too remote. Third, the Eighth Circuit held that the lawsuit was not a removable “class action” under the federal Class Action Fairness Act. One judge wrote a concurrence opining that the case should arise under federal law. The concurrence said Minnesota’s complaint “all but dares the companies to raise a federal-preemption defense” and that “no one doubts that they will or that it will be the focal point of the litigation.” The concurring opinion contended that in such a situation, there was “no reason” for the removal rules to block federal jurisdiction but noted that “only Congress or the Supreme Court gets to make that call.”

On June 23, 2021, the nonprofit corporation Energy Policy Advocates filed a motion for leave to file amicus brief in support of the defendants-appellants. The amicus brief said Energy Policy Advocates had made “tenacious use of public-records laws” to document the “troubling origin” of the State’s lawsuit. The group argued that the case originated with “activists and lobbyists who desire to impact national climate policy,” and that federal courts therefore should adjudicate the case. The group also argued that concerns about state court bias were amplified in this case.

On June 17, 2021, the fossil fuel industry defendants-appellants filed their opening brief in the Eighth Circuit Court of Appeals for their appeal of the remand order in the State of Minnesota’s lawsuit. They argued that removal was proper because Minnesota’s claims arose under federal law and necessarily raised substantial and disputed federal issues, and also based on the federal-officer removal statute, the Outer Continental Shelf Lands Act, and the Class Action Fairness Act.