Case preview: Justices to consider procedural issue in major climate-change lawsuit

The Supreme Court will hear oral argument on Tuesday in a lawsuit brought by the city of Baltimore against companies that produce fossil fuels, seeking to hold them responsible for their role in global warming. The justices won’t weigh in on the merits of the city’s claims or the companies’ defenses; instead, the court will consider a jurisdictional issue arising from the companies’ efforts to transfer the case from a state court to federal court. But although the question before the justices is a technical one, it could have important implications not only for Baltimore’s lawsuit, but also for 19 other similar cases around the country.

Background

The case now before the Supreme Court, BP PLC v. Mayor and City Council of Baltimore, was filed in 2018 by the city against a group of oil and gas companies, including BP, Chevron, Exxon Mobil, Shell and Citgo. The city wants to hold the companies responsible for their role in climate change, arguing that the companies continued to produce and sell fossil-fuel products even though the companies knew that the use of fossil fuels would lead to global warming. Global warming, Baltimore alleges, has injured the city in a variety of ways, including rising sea levels, heat waves and “extreme precipitation,” and the city wants the companies to compensate it for some of the costs resulting from those injuries.

Under federal law, cases filed in state court can be transferred – the technical term is “removed” – to federal court if they meet one of several criteria. In this case, Chevron removed the lawsuit to a federal district court in Maryland, pointing to eight different grounds for removal. One ground was a law known as the “federal officer removal statute,” which allows the removal to federal court of lawsuits filed in state court against “any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office.” The oil companies contended that Baltimore was seeking to hold them liable for their exploration for and production of fossil fuels at the direction of federal officials – for example, when they produced fossil fuels offshore under leases with the government that gave the government significant control over some parts of the companies’ operations.

Baltimore asked the district court to send the case back to state court, and the district court agreed. The companies appealed that decision to the U.S. Court of Appeals for the 4th Circuit. Under federal law, most orders remanding a case to state court cannot be appealed, but two narrow exceptions permit appeals in cases that were removed to federal court based on either the federal-officer removal statute or a separate statute that allows for the removal of civil-rights cases. Rejecting the oil companies’ contention that it could review the district court’s entire order remanding the case to state court, the court of appeals concluded that it could review only whether removal was appropriate under the federal officer removal statute – which, it agreed with Baltimore, it was not.

The companies went to the Supreme Court last spring, asking the justices to weigh in on whether courts of appeals can review only the federal-officer ground or the civil-rights ground for removal, as the 4th Circuit held, or whether they can instead review any issue included in the district court’s remand order. The justices granted review in early October.

Arguments of the oil companies

In their briefs on the merits, the companies urge the justices to rule that when a defendant relies in part on either the federal-officer or civil-rights removal statutes to remove a case to federal court, the court of appeals can review the entire remand order. This conclusion, the companies contend, flows from the plain text of 28 U.S.C. § 1447(d), the federal law governing appeals of remand orders, which allows an appeal of an “order remanding a case” to state court when the case was “removed pursuant to” the federal-officer or civil-rights removal statutes. A remand order, the companies reason, “is a written command or direction that the case must be returned to state court”; it “necessarily rejects” all of the grounds for removal on which the defendant relied. When the defendant appeals the remand order, the companies argue, the appeal “thus brings all of those grounds for removal before the court of appeals, and the court of appeals cannot affirm unless each lacks merit.” By contrast, the companies argue, the city’s interpretation would read the phrase “order remanding the case” as “the district court’s reasoning rejecting the federal-officer or civil-rights ground for removal.” But if that was what Congress had intended, it would have said so.

The companies suggest that their interpretation is consistent with the Supreme Court’s cases interpreting three other statutes allowing review of district court orders, in which the court ruled that an appeals court can review both “the particular aspect of the order that permitted the appeal” and also “any other issues encompassed in the order.” More broadly, the companies observe, appeals courts are generally tasked with determining whether the ruling they are reviewing is correct, rather than whether the basis for that ruling is correct.

Allowing the court of appeals to review all of the grounds for removal, the companies continue, would also be consistent with the purpose of Section 1447(d), which at its core is intended to guard against interference with the government’s operations. When a defendant’s argument for removal under the federal-officer or civil-rights statute is plausible but “ultimately unsuccessful,” the companies posit, there are likely to be similar federal interests at stake in the other grounds for removal on which the defendant relied. Here, for example, they write, the production and sale of fossil fuels is “vital to the Nation’s economic health and the national defense,” “has been promoted by a long series of federal policies spanning more than a century” and is inextricably linked with the federal government. Allowing the court of appeals to review the entire remand order, even if the federal-officer removal statute does not apply, would therefore advance “significant federal interests.”

The companies acknowledge that another key goal of Section 1447(d) was to avoid delays caused by protracted litigation over remand issues. But if a defendant can already appeal the district court’s ruling on removal under the federal-officer or civil-rights statutes, the companies counter, there will already be some delays; any additional delays that might result because the court of appeals reviews other grounds for removal will be insignificant.

The companies urge the court to send the case back to the 4th Circuit so that it can address the other grounds for removal. Alternatively, the companies propose, the court could resolve those issues itself. In particular, the companies contend, the Supreme Court should rule that the case belongs in federal court because the city has claimed that it was injured by interstate pollution, which is a claim that arises exclusively under federal law and is therefore removable. Because that question is present not only in this case but also in other similar cases around the country, the companies conclude, the justices should “preserve judicial resources” by making clear that it belongs in federal, rather than state, courts.

The companies are backed by several “friend of the court” briefs that paint a picture of the case as a part of a “coordinated national campaign” to influence climate-change policy. Unless climate-change cases are removed to federal court and stay there, they warn the justices, oil and gas companies run the risk that they will be subject to a patchwork of different remedies and rulings throughout the 50 states. Moreover, they add, this issue could arise beyond the context of climate change in other industries that work in partnerships with the federal government, such as aviation and the administration of health insurance.

Arguments of the city

Baltimore counters that its approach makes more sense in light of the text of Section 1447(d). The first clause in Section 1447(d) takes away the power of the courts of appeals to review appeals from remand orders, the city writes. The second clause, the city continues, carves out a narrow exception for orders remanding a case pursuant to civil-rights or federal-officer removal statutes. The text of that second clause makes clear that appeals courts can review only two grounds for removal: federal-officer removal and removal under the civil-rights statutes, as nine courts of appeals have agreed.

Addressing the companies’ argument that Section 1447(d)’s reference to a remand “order” necessarily allows the court of appeals to review all of the grounds for removal included in the order, the city stresses that any interpretation of Section 1447(d) must look at the whole statute in context. The statute allows appeals courts to review a remand order only if that order addresses removal under the civil-rights statute or federal-officer statute in the first place. The natural reading of this exception, the city asserts, limits appellate review of the order to those grounds. Indeed, the city notes, the Supreme Court “has never said that appellate review of a lower court ruling necessarily means review of all issues raised therein.” When it reviews state-court judgments, for example, the Supreme Court reviews only federal-law questions, rather than all of the issues involved in the ruling.

Even if the companies’ interpretation of the significance of the term “order” were correct, the city continues, they would still not be entitled to a review of all of the removal grounds covered by a remand order. The text of Section 1447(d), the city observes, only gives the courts of appeals the power to review cases removed “pursuant to” the federal-officer and civil-rights removal statutes. When, as in this case, the defendants’ efforts to remove the case to federal court under those grounds are unsuccessful, the city concludes, “the removal is not ‘pursuant to’ those grounds, and the appellate court’s jurisdiction ends.”

The city tells the justices that its narrower interpretation is also more consistent with the purposes of Section 1447(d). First, it avoids “prolonged litigation.” Despite the companies’ argument to the contrary, the city writes, “the burdens of adjudicating additional remand grounds on appeal are far from marginal.” Allowing the courts of appeals to consider additional grounds for removal would require litigants to brief additional issues – here, for example, the oil companies “advanced eight separate grounds for removal,” including “not only federal-officer jurisdiction and a novel theory of arising-under jurisdiction based on federal common law, but also theories based on admiralty jurisdiction, bankruptcy jurisdiction, federal enclave jurisdiction, the Outer Continental Shelf Lands Act, and others.”

The city’s interpretation also advances the respect for state courts that underlies the exceptions, the city says, while the companies would have the court believe that Congress wanted the narrow exceptions that it drafted to extend to “defendants who are not federal officers and who are not enforcing civil-rights laws out of a generalized fear that these types of defendants may ‘face significant local prejudice.’”

Finally, the city cautions, the companies’ interpretation would “also encourage jurisdictional gamesmanship”: Defendants would include federal-officer or civil-rights removal (or both) as a ground for removal, no matter how meritless, to ensure that the court of appeals would have to review all of the grounds for removal.

The city urges the justices to reject the companies’ invitation to rule on the companies’ contention that the case belongs in federal court because the city has claimed that it was injured by interstate pollution, which is a claim that arises exclusively under federal law and is therefore removable. That issue was not addressed in the court of appeals, included in the question presented in the companies’ petition for review or “seriously argued in the briefs supporting certiorari,” the city emphasizes, so the justices should not entertain it now.

Most of the justices were familiar with the case even before the companies filed their petition for review last year. In 2019, the companies asked the court to block the remand to state court while they appealed that ruling, but the justices declined to do so. Justice Samuel Alito did not participate in that order or in subsequent proceedings in this case, presumably because (as watchdog group Fix the Court reported) he owns stock in two of the litigants, Phillips 66 and ConocoPhillips. The court’s announcement that it would grant review and hear oral argument means that at least four justices want to take up the case on the merits, but with only eight justices voting the case is likely to be closely divided.

This article was originally published at Howe on the Court.