Supreme Court Weighs Oil Industry Bid to Move Wetland Suits (1)

The US Supreme Court weighed whether Chevron USA Inc., Exxon Mobil Corp., and other oil and gas companies can move lawsuits seeking to hold them liable for the erosion of Louisiana’s coastal wetlands from state to federal court.

Hearing arguments on Monday, the justices grappled with a procedural question over whether the cases must be removed because the charged conduct relates to activities Chevron performed on behalf of the US government during World War II.

A key issue in the case is a 2011 amendment to the Federal Officer Removal Statute, which requires a federal forum for actions “relating to” those undertaken under a federal officer.

It wasn’t immediately clear how the justices would decide the matter. Many of their questions zeroed in on the impact of that amendment and congressional motivations when passing it. They also repeatedly focused on how far-reaching the “relating to” language should go in disputes involving federal contractors.

“You’re right, obviously, that ‘relating to’ is very broad, but it’s hard to see where you stop,” Chief Justice John Roberts said. “Is it a butterfly effect? You know, the butterfly flaps its wings and it has the end result halfway around the world.”

The arguments featured just eight justices. Samuel Alito last week recused from the case due to a stock conflict tied to ConocoPhillips, which is the parent of a company involved in the broader legal dispute.

While the case deals with a technical question, the court’s decision could have significant implications in a broader battle between Louisiana and the oil industry over damage they allegedly caused.

In 2013, six Louisiana parishes, backed by the GOP-led state, filed 42 nearly identical lawsuits against Chevron, Exxon, and other energy companies. The companies are accused of violating a state law by engaging in certain operations without a permit after 1980, and that they should pay to repair damage they caused to the state’s coastal zone.

Only one of those cases has gone to trial, ending in a jury verdict last April ordering Chevron to pay $745 million toward restoring the coastal region.

Chevron’s lawyer, Paul Clement, said at argument that the war context is critical. If Chevron was blocked from producing oil to satisfy contracts to refine aviation gas in the 1940s, “the war efforts would have suffered,” he said.

He also claimed the plain meaning of “relating to” meant this wasn’t a “close case” and that the dispute should be remanded to federal court.

Louisiana Solicitor General Ben Aguiñaga countered that the charged conduct deals exclusively with defendants’ conduct tied to oil production.

“For all of the narrative from my friends on the other side that, you know, this was a natural consequence of their avgas refining contracts, that is inconsistent with the historical record,” he said.

State v. Federal

The back-and-forth demonstrated the importance both sides have placed on the forum for these lawsuits.

Justices Brett Kavanaugh and Clarence Thomas each raised that issue during arguments, which yielded responses from Clement that cases with national importance but local hostility must be held in federal court to ensure fairness.

Aguiñaga argued that the case deals with a state coastal management law and therefore belongs in state court, “especially with respect to a problem that is so sweeping in scope.”

The Justice Department backed Chevron’s position while arguing that the oil production was a key ingredient for the company to fulfill its aviation gas contracts.

The backdrop of World War II generated several questions from Justice Amy Coney Barrett, including surrounding an expert report that the parishes issued in 2018 that Chevron says led to its arguments to move the case.

Justices Clarence Thomas and Neil Gorsuch honed in on the 2011 amendment, which Thomas said appeared to be a “dramatic change” to the law in question. In an exchange with Aguiñaga, Gorsuch asked whether the “relating to” language did “nothing. Or do those words that Congress added mean something?”

But the context of the 2011 amendment also gave rise to some concerns for the justices.

Justice Ketanji Brown Jackson noted that it was what’s known as a “conforming amendment,” which the Supreme Court in its history has understood to serve a narrow purpose, rather than a substantial one.

Even so, Jackson said Chevron appeared to have a “pretty good argument” for transferring the case to federal court under the more stringent standard that existed before 2011.

‘Line Drawing’

The justices appeared to struggle more over the implications of their decision, raising scenarios such as employment disputes and a private lawsuit seeking damages from a private airline manufacturer that has contracts with the US.

Aaron Roper, arguing for the Justice Department, said at one point that this dispute fits as an “easy case” and that the justices could leave harder “line-drawing problems” for another day.

“How many times are you supposed to say that,” Roberts retorted.

Lawyers for the six Louisiana coastal parishes, which are similar to counties, said a decision by the Supreme Court could affect roughly a dozen lawsuits, including the one that ended with the $745 million judgment in Plaquemines Parish against Chevron.

The case engendered numerous briefs from Republican state and federal officials who argue Louisiana is trying to hold oil companies retroactively liable for conduct performed in World War II. But Louisiana’s Republican governor is backing the lawsuit, which the state argues deals with conduct before and after 1980.

The case is Chevron USA inc. v. Plaquemines Parish, U.S., 24-813, argument, 1/12/26.