HARTFORD, Conn. (Legal Newsline) - The oil industry’s recent victory at the U.S. Supreme Court over climate-change litigation proved short-lived, as a federal judge remanded Connecticut’s lawsuit against ExxonMobil back to state court by ruling the company failed to make a compelling argument the case raised exclusively federal issues.
ExxonMobil had argued that Connecticut Attorney General William Tong sued the company as part of a nationwide campaign by Democratic AGs to use state courts to make changes in federal energy policy that they can’t achieve at the ballot box. Like other states, Connecticut accuses ExxonMobil of violating state consumer protection laws by misleading consumers about the effects of greenhouse gases on the climate so they would buy more hydrocarbon fuels.
Oil companies appeared to have won a significant victory last month after the Supreme Court sent Baltimore’s lawsuit back to federal court, reversing an appellate ruling to hold that judges must consider every one of a company’s arguments for removal. The high court sent back lawsuits in Colorado, Rhode Island and elsewhere after handing down the decision.
The victory may prove fleeting, however. In a June 2 decision that mentions the Supreme Court’s Baltimore decision in a single sentence, U.S. District Judge Janet C. Hall ruled that Connecticut’s climate lawsuit belongs in state court. She rejected every one of ExxonMobil’s arguments, concluding that Connecticut had successfully written its case in such a way to completely avoid federal court.
Judge Hall cited the “well-pleaded complaint rule,” Supreme Court doctrine that makes plaintiffs the masters of their complaints and severely restrict the ability of federal judges to assert jurisdiction over cases unless they present exclusively federal questions.
“In a world without the well-pleaded complaint rule, ExxonMobil’s position would be straightforward: federal courts should have jurisdiction over important issues of federal law,” she wrote. “The problem for ExxonMobil is that the well-pleaded complaint rule does in fact exist.”
Connecticut accused ExxonMobil of mounting a decades-long campaign to downplay the risks of burning hydrocarbon fuels and “greenwashing” its own image to mislead consumers into thinking the company is “environmentally conscious.” The state’s theory is that Connecticut consumers bought more of ExxonMobil’s products as a result, releasing dangerous greenhouse gases into the atmosphere and heating the planet. The state wants the company to disgorge profits and fund an “extensive education campaign to remedy the harm inflicted by decades of disinformation.”
ExxonMobil removed the case to federal court in October, saying the case represented the “latest product of a multi-year plan” to change federal energy policy. State AGs, some of them allied with private lawyers working under contingency-fee contracts and attorneys funded by billionaire Michael Bloomberg, have refined their strategy to craft lawsuits that will remain in favorable state courts. One tactic is to claim violations of state consumer protection laws instead of public nuisance, which is governed by federal common law.
“In short, Connecticut alleges that ExxonMobil lied to Connecticut consumers, and that these lies affected the behavior of those consumers,” the judge wrote. “The fact that the alleged lies were about the impacts of fossil fuels on the Earth’s climate does not empower the court to rewrite the complaint and substitute other claims.”
The judge refused to order ExxonMobil to pay the costs of its short-lived removal to federal court, “albeit with some reservation,” saying the company had a reasonable basis to believe its arguments had merit. The judge also said in a footnote that while Connecticut wanted ExxonMobil to pay all the costs associated with global warming, she could only award damages based on the company’s alleged false marketing.