Vermont v. Exxon Mobil Corp.

The federal district court for the District of Vermont granted the State of Vermont’s motion to remand to state court the State’s case asserting that fossil fuel company defendants violated the Vermont Consumer Protection Act (VCPA) by engaging in deceptive acts and unfair practices regarding their products’ contributions to climate change. The court noted that its review was guided by the Second Circuit’s September 2023 decision in <a href="https://climatecasechart.com/case/state-v-exxon-mobil-corp/">Connecticut v. Exxon Mobil Corp.</a>, which addressed several of the jurisdictional questions raised in this case and answered them in favor of Connecticut. In Vermont’s case, the district court first found that, as in the Connecticut case, the Grable exception to the well-pleaded complaint rule did not apply because the VCPA claims could be resolved without addressing a federal issue and because no federal issue was necessarily raised. (The well-pleaded complaint rule provides “that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint.”) The district court rejected the defendants’ contentions that Vermont’s claims regarding their advertising practices necessarily raised federal issues regarding compliance with federal environmental and fuel economy standards and that Vermont’s claims also necessarily raised federal policy issues regarding governmental promotion of fossil fuels. Second, the district court rejected the federal common law of transboundary pollution or foreign affairs as a basis for the complete preemption exception to the well-pleaded complaint rule; the court found that the complaint made clear that the case was about deception and unfair business practices in Vermont, not air pollution or international treaties. The court then cited the reasoning of the Second Circuit’s Connecticut decision to reject arguments that there was federal jurisdiction under the federal-officer removal statute or the Outer Continental Shelf Lands Act. In addition, the district court found that there was no federal enclave jurisdiction, rejecting the defendants’ argument that such jurisdiction was appropriate because the complaint alleged statewide climate change harms that would encompass harms in “a few isolated federal enclaves within Vermont” such as national forest and national park lands and ports of entry. In addition, the court found that there was no diversity jurisdiction. The court, however, denied Vermont’s request for costs and fees incurred as a result of removal, finding that the defendants did not lack an objectively reasonable basis for removal.

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On November 22, 2021, Vermont filed its motion to remand to state court, with a memorandum of law to follow on or before December 17, 2021.

On November 12, 2021, Vermont filed its opposition to fossil fuel companies’ motion to stay proceedings in the federal district court for the District of Vermont in the State’s consumer protection lawsuit alleging climate change-related deception. The companies had argued that the Second Circuit’s review of the remand order in Connecticut v. Exxon Mobil Corp. would “control, or at least inform,” the result in Vermont’s case. Vermont argued that the companies drew “a false equivalence” between Connecticut’s and Vermont’s claims because Vermont was not seeking monetary relief for climate change damages.

On October 29, 2021, Exxon and the other defendants filed a motion to stay the proceedings while the Second Circuit considers <a href="https://climatecasechart.com/case/state-v-exxon-mobil-corp/">Connecticut v. Exxon Mobil Corp.</a>, which the defendants said would “control, or at least inform,” the result in this case.