Judgment for Oil and Gas Company Defendants Reversed: No Basis for Federal Jurisdiction
In two sets of consolidated cases decided May 26, 2020, a Ninth Circuit panel held that California cities and counties represented by Altshuler Berzon LLP and Sher Edling LLP may continue to prosecute claims against several of the world’s largest privately owned oil and gas companies, including Chevron, Exxon Mobil, BP, and Royal Dutch Shell, for harms to public infrastructure resulting from climate-change-related global warming.
In the first set of cases, brought by the City of Oakland and the City and County of San Francisco (and argued by Altshuler Berzon LLP partner Michael Rubin), the Ninth Circuit reversed the district court’s judgment against five oil and gas company defendants. Those cases had been removed from state court on seven jurisdictional grounds. The district court denied remand after concluding that although the cases were brought under California’s representative public nuisance law (Cal. Civil Code §3480, et seq.), they actually “arose under” federal common law for purposes of federal subject matter jurisdiction. The district court thus asserted subject matter jurisdiction, but it later dismissed the cases on the ground that the Clean Air Act “displaced” the applicable federal common law, leaving Oakland and San Francisco without any cause of action they could pursue in federal court.
The unanimous Ninth Circuit panel (Ikuta, J., with Christen and Lee, JJ.) reversed, holding that the district court erred in finding “arising under” jurisdiction because the state law tort claims pleaded by Oakland and San Francisco did not trigger application of the federal common law governing trans-boundary air pollution and because the Clean Air Act did not “completely preempt” state public nuisance law. The panel did not reach any of the other issues in the case but remanded the case to the district court to determine whether any remaining grounds for subject matter jurisdiction precluded remand.
The second set of cases, brought by the County of San Mateo and five other public entities against more than two dozen oil and gas company defendants, raised similar California state law tort claims. In those cases, the Ninth Circuit panel affirmed a different district court’s order remanding the cases to the state courts in which they had been filed. Construing the federal removal statute, 28 U.S.C. §1447(d), as prohibiting appellate review of any remand order except to the extent federal-officer jurisdiction or Civil Rights Act jurisdiction was an asserted basis for removal, the Ninth Circuit panel held that because the oil and gas company defendants failed to establish federal-officer jurisdiction (and did not allege Civil Rights Act jurisdiction), the cases must be remanded to state court without regard to any of the non-reviewable jurisdiction grounds alleged by those defendants.
Several Altshuler Berzon LLP attorneys worked on these cases, including B.J. Chisholm, Corinne Johnson, and Michael Rubin.
The cases are City of Oakland et al. v. BP PLC et al., __ F.3d __, 2020 WL 2703701 ( 9th Cir. May 26, 2020), and County of San Mateo et al. v. Chevron Corp. et al., __ F.3d __, 2020 WL 2703701 (9th Cir. May 26, 2020).