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Climate Change Reaches Supreme Court in Jurisdiction Clash (2)

Oct. 2, 2020, 1:37 PMUpdated: Oct. 2, 2020, 4:13 PM

Climate change is officially on the docket at the U.S. Supreme Court, which has agreed to review a procedural question that affects more than a dozen cases against Big Oil.

The justices on Friday granted a petition for review from BP Plc, Chevron Corp., and other companies that want climate cases kicked out of state courts and heard by federal judges instead.

The high court’s interest in the issue is good news for oil and gas companies, which have tried for years to push climate liability cases to federal courts, which are seen as more favorable to industry defendants. The court’s order notes that Justice Samuel Alito didn’t take part in considering the petition.

The underlying dispute centers on a lawsuit Baltimore filed in 2018 seeking damages from oil and gas producers for their role in climate change and its impacts, such as extreme heat and flooding. The case is part of a nationwide movement of climate litigation against large fossil fuel companies—a campaign that could come up short if the Supreme Court sides with the industry.

Lawsuits from Baltimore and other state and local governments suing Big Oil over climate change could face steeper odds if the justices rule in the companies’ favor. An industry victory would likely rest on the narrow technical question in the case, but also would result in further delays—and, potentially, a less favorable venue—for Baltimore’s ongoing effort to take Big Oil to trial.

“By affording the oil industry another substantial delay in the commencement of a climate trial, this grant of cert is a significant win for them,” University of Maryland law professor Robert Percival said.

The Supreme Court’s decision to hear the case surprised Percival and several other legal scholars, who thought the procedural question at issue was too dry to catch the justices’ interest.

‘Mounting Costs’

The justices’ move drew quick praise from the industry. Chevron said it’s hopeful the Supreme Court will require lower courts to revisit state-versus-federal court arguments.

“These cases have sweeping implications for national energy policy, national security, foreign policy, and other uniquely federal interests,” spokesman Sean Comey said in a statement. “They belong in federal court and we are hopeful the Supreme Court will agree that these issues require a closer look.”

Other industry defendants contacted Friday morning didn’t immediately respond to requests for comment on the Supreme Court’s move.

Baltimore Acting Solicitor Dana P. Moore stressed that the justices are reviewing only “a narrow technical issue that has no bearing on the substance” of Baltimore’s climate liability claims.

“It has been over two years since the City of Baltimore filed our case,” she said in a statement. “Two more years of increased climate change damage to our city, and two more years of mounting costs to our taxpayers.”

Baltimore’s Claims

Baltimore’s lawsuit alleges nuisance, trespass, and other claims under state common law, saying companies should foot the bill for local harms associated with climate change, which is primarily driven by burning fossil fuels.

Oil giants are facing similar lawsuits with climate-focused common law or consumer protection claims from state and local governments in California, Colorado, Rhode Island, Minnesota, Washington, D.C., Connecticut, and elsewhere.

But procedural wrangling over the federal-versus-state court issue has dominated most of the litigation thus far. The plaintiffs want to pursue their claims in the state courts where they filed their cases.

State and local governments have largely been successful in returning their cases to state courts, prompting multiple industry pleas for Supreme Court intervention.

Baltimore’s state-court proceedings against the industry are already on hold pending the outcome in a separate pair of Supreme Court cases involving a related jurisdiction issue.

Technical Question

Industry lawyers said the justices should resolve a technical question that has split circuit courts: What’s the proper scope of appellate review when a defendant invokes “federal officer” jurisdiction to send a case from state to federal court?

Federal officer jurisdiction is the idea that cases involving U.S. officials generally belong in federal court.

Oil companies used that argument to move Baltimore’s case to federal court, but a federal district judge sent it back to the state level. On appeal, the U.S. Court of Appeals for the Fourth Circuit upheld the ruling and determined that legal precedent gave it authority to review only that federal officer issue, not other arguments for putting the case in federal court.

The Tenth Circuit and Ninth Circuit have applied the same narrow scope of review in climate cases from California and Colorado local governments.

But lawyers for BP, Chevron, Exxon Mobil Corp., and others note that some circuit courts, in unrelated cases, have adopted a broader scope of review in a case involving federal officer jurisdiction. In their Supreme Court petition, they called the Baltimore case the “ideal vehicle for resolving an entrenched conflict” among the circuit courts.

The Supreme Court declined to get involved in an earlier stage of the jurisdiction debate in the climate cases.

“The bottom line is that if the oil companies were to win, this gives them other avenues for delay and for getting the cases into federal court, where they think they have a better shot at getting cases dismissed entirely,” said Ann Carlson, a law professor at the University of California, Los Angeles, who has done pro bono consulting for some plaintiffs in climate liability cases.

The case is BP Plc v. Mayor & City Council of Baltimore, U.S., No. 19-1189, cert. granted 10/2/20.

(Adds comment from Chevron, Carlson in eighth, ninth, and last paragraphs.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloomberglaw.com

To contact the editors responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com; Rebecca Baker at rbaker@bloombergindustry.com

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