By Matthew G. Lawson
On Friday, October 2, 2020, the United States Supreme Court granted a writ of certiorari to review of a decision by the Fourth Circuit Court of Appeals holding that climate change litigation brought against various fossil fuel were not subject to federal court subject matter jurisdiction. While the Supreme Court’s review is limited to a somewhat narrow, jurisdictional question regarding the ability of an appellate court to review a district court’s order remanding a case to state court, the decision will likely have far reaching impacts on whether the growing number of climate changes cases in the United States will be litigated in state or federal courts.
As previously discussed by the Corporate Environmental Lawyer, the underlying litigation involves claims asserted in Maryland state court by the City of Baltimore against various fossil-fuel companies for damages associated with Climate Change. In its complaint, Baltimore asserted claims against the industry for public nuisance, private nuisance, strict liability failure to warn, strict liability design defect, negligent design defect, negligent failure to warn, trespass, and violations of Maryland’s Consumer Protection Act.
In response, the fossil fuel companies sought to remove the action to federal court. However, the district court remanded the case back to state court after finding that it lacked subject matter jurisdiction over the asserted claims following the lead of several other district courts that have decided similar issues. On March 6, 2020, the Fourth Circuit affirmed the district court’s remand order. Importantly, the Fourth Circuit found that its appellate jurisdiction was limited to reviewing the district court’s conclusion that it lacked subject matter jurisdiction under the Federal-Officer Removal Statute pursuant to 28 U.S.C. § 1447(d) and 28 U.S.C. § 1442 notwithstanding that the fossil fuel companies had raised and the district court ruled on additional arguments in support of the removal petition. The Fourth Circuit found that it lacked jurisdiction to consider whether the district court should have granted removal to federal court on these alternative grounds.
With respect to the Federal Officer Removal Statute, the Fourth Circuit rejected the companies’ arguments that the case belonged in federal court because the companies had entered into fuel supply and strategic petroleum reserve agreements with the federal government. The court concluded that these contractual agreements failed to establish that the companies were “acting under” the direction of a federal officer and were “insufficiently related” to Baltimore’s claims. On March 31, 2020, the fossil-fuel companies filed a petition for a writ of certiorari in the United States Supreme Court, seeking review of the question of whether the statutory provision prescribing the scope of appellate review of remand orders “permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court…” The companies argued that the Fourth Circuit had improperly ignored several alternative grounds justifying removal of the case to federal court, including that federal common law governs claims of interstate air pollution.
While the Supreme Court’s review of the case will be limited to the appellate jurisdictional question, the decision will undoubtedly influence the growing trend of climate change litigation. At present, twenty-one U.S. States and numerous municipalities have brought lawsuits in state court against the fossil fuel industry for damages related to climate change. In nearly all such cases, the industry has sought to remove the case to federal court where it is believed the companies have a better chance of successfully securing dismissals on the grounds that such claims are preempted by the Clean Air Act and/or addresses a “political question” which is better left to the discretion of Congress. Thus, the Supreme Court’s decision will likely impact the ability of the fossil fuel industry to seek appellate review of unfavorable district court remand orders.