Ruling keeps climate suit in state

Several American states and cities have sued Big Oil over climate change. While the energy companies have attempted to remove the lawsuits to federal court, those courts — the latest being the 8th U.S. Circuit Court of Appeals — have rejected their arguments.

In 2020, Minnesota Attorney General Keith Ellison sued the American Petroleum Institute, Exxon Mobil and ExxonMobil Oil Corporations, Flint Hills Resources LP and Flint Hills Resources Pine Bend, and Koch Industries.

The suit argued that the companies have been aware of the environmental harm caused by the production and use of fossil fuels for decades. It claimed that the fossil fuel industry misled the public by downplaying the dangers of climate change and minimizing the role their products play in the global warming crisis.

“The economic devastation and public health impacts from climate change were caused, in large part, by a campaign of deception that Defendants orchestrated and executed with disturbing success,” the original complaint reads.

Notably, the lawsuit was filed in Ramsey County District Court. It asserts claims based entirely on state law — specifically, Minnesota statutes that prohibit false statements in advertising, deceptive trade practices, and consumer fraud. Defendants removed to federal court, arguing that the complaint was removable due to it being completely preempted by federal law and raising a substantial, disputed federal question. Minnesota moved to remand. The district court granted Minnesota’s motion. Subsequently, the defendants appealed to the 8th Circuit.

A three-judge panel of the 8th Circuit ruled in favor of Minnesota and kept the suit in state court. The 8th Circuit has decided the issue of where the case should be heard just as six U.S. federal appeals courts and 13 federal district courts have: They all unanimously rejected the arguments of fossil fuel companies aiming to avoid trials in state court.

Environmental advocates have celebrated the decision. “Big Oil companies have fought relentlessly to avoid facing the evidence of their climate fraud in state court, but once again judges have unanimously rejected their arguments,” said Richard Wiles, president of the Center for Climate Integrity. “After years of Big Oil’s delay tactics, it’s time for the people of Minnesota to have their day in court.”

“Imagine how much farther along we’d be in the transition to a low-carbon economy if it weren’t for the defendant’s decades of deception and disinformation,” stated Ellison after the 8th Circuit’s decision. “Our state law claims are now headed back to state court where the belong, and where every U.S. Court of Appeals has sent them.”

However, the jurisdictional question of where these suits against these energy companies should be heard is barreling toward resolution in the U.S. Supreme Court. The court has invited the solicitor general to file a brief expressing the views of the United States on whether to grant certiorari in Suncor Energy (U.S.A.) Inc. v. Board of County Commissioners of Boulder County. Energy companies have asked the Supreme Court to review the 10th Circuit’s holding that federal courts lack jurisdiction over climate-related tort claims that were brought by Boulder, Colorado. The Biden administration has agreed that the case should stay in state courts.

“The fundamental reason, in our view, why federal common law applies is because the theory of causation depends on worldwide greenhouse gas emissions,” argued Kannon Shanmugam, partner at Paul Weiss, who represented appellants. “The theory of causation and harm centrally focuses on worldwide greenhouse gas emissions. The principles that the Supreme Court has articulated for more than a century in the context of interstate pollution apply. Indeed, I would submit that they apply with even greater force in the context of climate change, which implicates not just relationships between states, but inherently national and, indeed, international activities and interests.”

Victor Sher, partner at Sher Edling, represented appellees, and said that the arguments the defendants have made “turn the well-pleaded complaint rule upside down” and reverse the court’s reluctance to expand the jurisdiction of federal courts through a broad reading of jurisdictional statutes. “Big cases do not make federal jurisdiction.”

Even though the 8th Circuit ruled in favor of Minnesota, Judge David Stras, in his concurrence, argued that while Minnesota’s suit does not currently arise under federal law, the suit really should. “Artful pleading comes in many forms. This is one of them,” Stras wrote. “There is no hiding the obvious, and Minnesota does not even try: it seeks a global remedy for a global issue.”

Still, Stras said that he was duty bound to agree that the lawsuit did not arise under federal law and could not remove. “But only Congress or the Supreme Court gets to make that call. And we have our marching orders: even the strongest arguments for removal don’t work here,” Stras stated.