In June, the U.S. Court of Appeals for the Third Circuit heard oral arguments in the City of Hoboken and State of Delaware’s climate lawsuits against energy producers. The three-judge panel probed the assertion that the case belongs in state court rather than federal court.
The judges asked good questions of both sides, appreciating the magnitude of the lawsuit.
Judge Bibas, in an exchange with the attorney for Delaware, pointed out the international scope of the issues in the litigation: “You’re suing over fuel that was sold abroad, burned abroad, maybe extracted from the ground abroad…doesn’t that have to be a uniquely federal set of interests as long you’re seeking to drag the entire world into Delaware court?”
Judge McKee also noted the lawsuit was effectively asking the state court to enjoin worldwide production, marketing, and refining activities of the defendants: “The very nature of this is such that no one state should be empowered via the jurisdictional hook to consider claims that have a worldwide impact.”
Indeed, the extraterritorial impact of the suit was a key theme throughout the hearing as counsel for the defendants noted that “at least 120 times Delaware’s [complaint] uses the word emissions and Hoboken’s uses the word emissions at least 70 times,” despite arguing that the case is not about emissions.
As noted previously, if a finding for Hoboken and Delaware would effectively regulate greenhouse gas emissions, then this makes the case a federal one and a question for the federal courts. That means the Supreme Court precedent in AEP v. Connecticut should be followed.
There obviously is no way to anticipate how a court may rule from oral argument, but one thing is clear. As Judge McKee said, “I don’t know how we cabin this to the jurisdictional confines of a state…it just seems like the Supreme Court needs to do something.”