by Lesley Clark

Municipalities looking to hold oil and gas companies accountable for climate impacts are pointing to a ruling in Baltimore’s high-profile liability case to bolster their argument that the fights should proceed in state court.

In briefs filed last week, a lawyer for several California counties and Washington, D.C.’s top legal officer cited the April 7 ruling from the 4th U.S. Circuit Court of Appeals, which rejected every argument industry lawyers presented to move Baltimore’s case to federal court, where oil and gas companies may face better odds.

The 4th Circuit’s decision follows a Supreme Court ruling last year that said federal appeals courts could consider a broader set of arguments for challenging remand orders that had sent liability cases like Baltimore’s back to the state courts where they were originally filed.

In the ruling, three 4th Circuit judges unanimously and “resoundingly” agreed with Baltimore that the case did not raise federal issues (Climatewire, April 8).

The 4th Circuit said state court was the right place for Baltimore’s claims of climate deception, “rejecting many of the same removal arguments advanced by defendants here,” wrote D.C. Attorney General Karl Racine (D) in a filing last week in the U.S. District Court for the District of Columbia.

Attorneys for San Mateo County, Calif., also cited the 4th Circuit ruling in their own case seeking oil industry compensation for wildfires, flooding and other effects of a warming planet. There are dozens of similar cases playing out in courts across the country.

Racine in 2020 sued four oil companies for “systematically and intentionally” misleading consumers about the effects of fossil fuels on climate change (Climatewire, June 29, 2020).

In his brief last week, Racine pointed to five arguments that the 4th Circuit rejected, including the federal officer removal statute, which says cases involving federal officials generally belong in federal court.

The 4th Circuit ruling found that “the nexus between the defendants’ deceptive marketing and any government-controlled fossil-fuel production was ‘too tenuous to support removal,’“ Racine wrote.

The Baltimore ruling was the second win for states, cities and counties following the Supreme Court’s decision last May that sent a host of climate liability cases back to federal appellate judges who had previously largely agreed that the lawsuits belonged in state courts. The 10th U.S. Circuit Court of Appeals in February agreed to keep a Colorado lawsuit before a state bench — even after considering additional industry arguments for federal jurisdiction (Climatewire, Feb. 9).

The question of which courts should hear climate liability cases has stymied action on dozens of lawsuits by municipalities looking to force the oil and gas industry to pay for producing planet-warming emissions. Most of the suits were filed in state courts, but industry lawyers have sought to move the cases to federal benches, where judges could find that the municipalities’ claims are preempted by the Clean Air Act.

“At the end of the day, given that there’s going to be a broad look at these issues from a number of circuits, one would expect that the Supreme Court would probably want to weigh in again and make sure that everyone is aligned,” said Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, an initiative of the National Association of Manufacturers that opposes the litigation.

He added that “it shouldn’t be lost” that climate liability challengers have chosen courts that appear likely to favor their arguments.

“They’re trying to cherry-pick the circuits they think they’re going to get the best results from,” Goldberg said, noting, for example, that no similar lawsuits have been filed in the historically conservative 5th U.S. Circuit Court of Appeals, which handles cases in Louisiana, Mississippi and Texas.

“If you had cases in other jurisdictions, they might look very different, which is what the Supreme Court has to consider,” he said.

Racine in February submitted the Colorado opinion to the D.C. District Court, writing that the 10th Circuit had “analyzed and rejected many of the same removal theories.”

The industry in a March filing countered that “contrary” to Racine’s assertions, the Colorado case does not undermine federal jurisdiction and that the 10th Circuit had “erred by rejecting removal jurisdiction based on the application of federal common law.”

Baltimore’s lawsuit is far from settled: Exxon Mobil Corp. on Friday asked for a two-week extension to file a petition for the case to be heard by the full slate of 4th Circuit judges. If the request is granted, Exxon would have until May 5 to file for rehearing.

“This appeal encompasses complex issues of federal jurisdiction including whether claims seeking redress for harms allegedly caused by global climate change necessarily arise under federal common law,” the filing notes.

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