WILMINGTON, Del. (Legal Newsline) - Rejecting arguments that Delaware was trying to use its own courts to interfere with federal energy policy, a federal judge ordered a climate lawsuit spearheaded by private lawyers back to state court where it could stand higher chances of success.
Delaware is represented by Sher Edling, one of several private law firms that have refined their strategies to try to keep climate litigation in state court despite arguments by the oil companies they sue that say the claims necessarily involve federal questions of energy policy and foreign relations. In a Jan. 5 order, U.S. District Judge Leonard Stark agreed with the plaintiff lawyers, saying they had adequately avoided federal claims by suing over an alleged “disinformation campaign” that caused consumers to purchase and burn more fossil fuels than they otherwise would have done.
Defendants Chevron, Royal Dutch Shell, ExxonMobil and others immediately filed a request to stay the order while they appeal to the Third Circuit Court of Appeals.
Oil companies won a partial victory at the U.S. Supreme Court last year when the high court ruled that appeals courts must consider all arguments for keeping climate lawsuits in federal court, not just the ones a lower court based its remand decision upon. But Judge Stark said that decision didn’t matter to him, since he rejected all of the defendants’ arguments, including that Delaware’s attempt to punish them for their marketing activities infringed their First Amendment free speech rights.
The judge also rejected arguments based on the federal officer doctrine, which holds that federal courts have jurisdiction to decide cases based on activities ordered by federal officials. The oil companies have argued in this and other cases that the federal government directed them to produce oil during World War II and the Korean War and that climate claims are based in part on offshore drilling activities regulated by federal officials.
More broadly, defendants argue the states are trying to win money from them for the global effects of global warming caused by the consumption of fossil fuels, which can only be resolved in federal court, if at all. The judge said that under the “well-pleaded complaint” rule, plaintiffs can sidestep around all federal questions in part by disclaiming them in their lawsuit.
Delaware is suing under its own consumer protection statute and other state laws, the judge said, and seeks “neither to address cross-border pollution nor to regulate international fossil fuel production and sales.”
“Neither the Supreme Court nor the Third Circuit has held that a complaint expressly asserting state-law claims that happen to implicate federal common law can create an additional exception to the well-pleaded complaint rule,” he wrote.
Other cases the defense cited reflect earlier strategies, including pleading federal common law, or in the case of New York’s lawsuit that was thrown out by a federal appeals court last year, filed in federal court from the beginning.
The oil companies said the lawsuit was “inviting a Delaware state court to assert control over an entire industry and its interstate (indeed, international) commercial activities.”
The judge rejected that argument, saying “federal jurisdiction is not created by predictions about extra-judicial realities that may (or may not) result from a state court resolving a claim that raises solely matters of state law.”
Sher Edling lost, for now, in a bid for legal fees. The judge said it was “not objectively unreasonable” for them to fight the remand to state court, in part because Delaware’s “lengthy complaint is fairly susceptible to different interpretations.”
Delaware claims the oil companies have harmed the state by misleading consumers worldwide about the harmful effects of burning hydrocarbon fuels. In order to win money, Judge Stark said, the state’s lawyers must prove this misinformation campaign led to “incremental impacts” driven by increased oil and gas consumption. He didn’t explain further how a court would determine what were incremental impacts, as opposed to normal increases in fuel consumption driven by other factors.