WASHINGTON (Legal Newsline) - Ruling on a narrow question of procedural law, the U.S. Supreme Court reversed an appeals court’s decision that sent the City of Baltimore’s climate lawsuit to Maryland state court, giving oil companies a second chance to try to keep the case out of a plaintiff-friendly venue.
In a 7-1 decision with Justice Sonia Sotomayor dissenting, Justice Neil Gorsuch rejected the reasoning of the Fourth Circuit Court of Appeals that it could avoid ruling on the various arguments BP, ExxonMobil and other oil companies made against being forced to defend themselves in state court. The decision sends the case back to the Fourth Circuit for a fuller review.
Federal appeals courts are generally barred from reviewing district-court decisions remanding cases to state court, but Congress has carved out exceptions for cases involving federal civil rights claims and questions about the involvement of federal officials. In their removal request, the oil companies argued Baltimore’s lawsuit necessarily includes questions about whether their exploration and production activities were encouraged and approved by federal officers.
A district court rejected that argument, sending the climate suit to state court where the defendants fear judges might be expected to be more sympathetic toward claims by a local city against out-of-state and international oil companies. As with other municipal plaintiffs represented by private lawyers, Baltimore’s case is structured to make only state law claims, in order to avoid the Supreme Court’s 2011 decision American Electric Power Co (AEP). v. Connecticut barring climate suits citing federal public nuisance claims as preempted under the Clean Air Act.
The Fourth Circuit agreed to hear the oil companies’ appeal, but only on the specific question of whether the federal officer exception applied. The oil companies argued, and the Supreme Court agreed, that once an appeals court has jurisdiction to review a remand “order,” the order means every reason the district court considered.
“The Supreme Court’s decision today to provide a full federal appellate review of the jurisdictional issues in this case and others like it should stop this effort by Baltimore and other communities to circumvent federal law and undermine national efforts to address climate change,” said Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, which opposes climate litigation. “Americans are tired of the litigation sideshow and deserve real solutions.”
In his decision, Justice Gorsuch noted the merits of Baltimore’s claims have nothing to do with appeal. The oil companies appealed the remand order, as they had a right to do, but “the real trouble began” when the Fourth Circuit limited its review to only the federal officer question. That triggered a circuit split, since the Seventh Circuit holding appellate review extends to the entire remand order. Baltimore and its lawyers at Sher Edling, who stand to make large fees if they win, argued a number of courts had ruled the other way in decisions involving other arguments against remand.
The plaintiffs also argued the exceptions Congress made to the general rule against appealing remand orders should be construed narrowly, to preserve the general idea that litigants should be able to proceed with their cases without endless procedural maneuvering between state and federal courts.
In her dissent, Justice Sonia Sotomayor said the majority decision “lets defendants sidestep” the general bar on appellate review of remand orders by “shoehorning” a federal officer argument into the case.
“In other words, it lets the exception swallow the rule,” she wrote. She cited decisions by eight circuit courts of appeal in favor of strict interpretation of removal statutes.
“I would not assume that so many decisions reaching the same conclusion over such a long period were beneath Congress’ notice,” she wrote.
“We do not see it,” Gorsuch said, however. “It seems most unlikely to us that a smattering of lower court opinions could ever represent the sort of `judicial consensus so broad and unquestioned that we must presume Congress knew of and endorsed it.’”