Supreme Court Ruling May Affect the Fate of Climate Change Liability Suits

Supreme Court Ruling May Affect the Fate of Climate Change Liability Suits

Legal Sidebari

Supreme Court Ruling May Affect the Fate of
Climate Change Liability Suits
June 4, 2021
On May 17, 2021, the Supreme Court issued a ruling that could delay climate liability suits—that is,
lawsuits seeking damages for alleged climate change-related injuries that result from selling and
producing fossil fuel products. In BP p.l.c. v. Mayor and City Council of Baltimore, the Court considered
the scope of judicial review of orders that transfer a lawsuit from federal to state court. The Court
expanded the scope of appellate review of orders remanding climate liability cases to state court, a
holding that will likely postpone judicial review of the merits of these suits.
Legal challenges over the appropriate court venue may affect the law and precedent that is applied in
more than 20 climate liability suits filed by state and local governments against fossil fuel producers in
state courts. This Legal Sidebar reviews the background of the Baltimore case, the Supreme Court’s
ruling, its potential effect on climate liability suits, and considerations for Congress.
Removal from State to Federal Court
The Baltimore case arose from lower court decisions related to whether climate liability suits belong in
state or federal court. Article III, Section 2 of the Constitution limits federal courts’ jurisdiction to cases
involving federal statutes, the Constitution, or treaties.
A defendant may remove (transfer) a suit brought in state court to a federal district court if it falls with the
federal court’s jurisdiction. If the plaintiff appeals the defendant’s removal action, a federal court can
remand the case to state court if it concludes that the suit was improperly removed. Under 28 U.S.C. §
1447(d), such remand orders are not subject to appellate review.
Congress established two exceptions to the Section 1447(d) bar on appellate review of remand orders. In
1964, Congress permitted appellate review of remand orders if the state case was removed to federal court
under the civil rights removal statute, 28 U.S.C. § 1443, which permits removal to federal court of suits in
which “equal civil rights of citizens” cannot be enforced in state court. In 2011, Congress extended the
exception to allow appellate review of removal orders under the federal officer removal statute, 28 U.S.C.
§ 1442, which authorizes the removal of state cases to federal court against any officer or agency of the
United States for any act related to federal authority. It is this removal statute that provided a mechanism
for the Supreme Court to review the Baltimore case.
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BP p.l.c. v. Mayor and City Council of Baltimore
In July of 2018, the Mayor and City of Baltimore (Baltimore) filed suit in Maryland state court against 26
fossil fuel producers, alleging that they violated state nuisance, negligence, strict liability, and consumer
fraud laws by producing, promoting, and marketing fossil fuel products that contribute to climate change.
Baltimore claims that it suffered various “climate change-related injuries” as a result of these companies’
actions. The alleged injuries include infrastructure repair and planning and response costs associated with
increases in sea levels, storms, floods, heatwaves, droughts, and extreme precipitation. Baltimore seeks
compensatory damages, civil penalties, punitive damages, and other relief.
Two of the defendants removed the case to the U.S. District Court for the District of Maryland, asserting
eight separate grounds to support removal. One of those eight grounds was that removal is authorized
under the federal officer removal statute, 28 U.S.C. § 1442, because certain defendants entered into
agreements and leases with the federal government to undertake some fuel production activities. The
defendants also argued that the case should be removed because Baltimore’s claims are governed by
federal common law and preempted by the Clean Air Act (CAA), other federal statutes, and the
Constitution. Baltimore then moved to return the case to state court, asserting that the federal court lacked
subject matter jurisdiction over the state-law claims. The Maryland federal district court granted the
remand to state court, rejecting all eight removal grounds asserted by the defendants. The defendants
appealed the federal district court’s remand order to the U.S. Court of Appeals for the Fourth Circuit. The
defendants cited the federal-officer exception to appellate review in 28 U.S.C. § 1447(d) as the basis for
appellate jurisdiction, but they asked the Fourth Circuit to review the entire remand order.
On appeal, the Fourth Circuit concluded that under 28 U.S.C. § 1447(d), it could review only the lower
court’s ruling pursuant to the federal-officer removal statute and none of the other grounds for removal.
Section 1447(d) states that:
An order remanding a case to the State court from which it was removed is not reviewable on appeal
or otherwise, except that an order remanding a case to the State court from which it was removed
pursuant to section 1442 or 1443 of this title shall be reviewable by appeal . . . .
The Fourth Circuit interpreted Section 1447(d) as limiting its appellate jurisdiction to grounds for
removal under (1) the federal-officer removal statute, 28 U.S.C. § 1442, or (2) the civil-rights removal
statute, 28 U.S.C. § 1443. (In other climate liability suits, the U.S. Courts of Appeals for the First, Ninth,
and Tenth Circuits interpreted Section 1447(d) similarly in their review of remand orders.) The Fourth
Circuit therefore affirmed the district court’s removal order, agreeing that contractual relationships
between the defendants and federal agencies did not support removal based on the federal-officer removal
statute. The Supreme Court granted the fossil fuel producers’ petition for a writ of certiorari on whether
28 U.S.C. § 1447(d) permits appellate review of any removal grounds addressed in a district court’s
remand order where removal to federal court was based in part on the federal-officer or civil-rights
removal statutes.
Supreme Court Ruling
In a 7-1 decision, the majority of the Supreme Court ruled that the Fourth Circuit erred, and that the
Fourth Circuit had jurisdiction under 28 U.S.C. § 1447(d) to consider all of the defendants’ grounds for
removal. (Justice Alito took no part in the consideration or decision of this case.) In an opinion authored
by Justice Gorsuch, the majority reasoned that the ordinary meaning of “order remanding a case” in
Section 1447(d) permits appellate review of all grounds for removal addressed in the district court’s
remand order, even if the federal-officer or civil-rights removal statutes were not the defendants’ only
grounds for removal. Justice Gorsuch highlighted the Court’s decision in Yamaha Motor Corp. USA v.
Calhoun to support the majority’s interpretation of Section 1447(d). In Yamaha, the Court held that an
appellate court has jurisdiction over any issue included in an order certified for interlocutory appeal under

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28 U.S.C. § 1292(b), and is not limited to the question of law the district court certified for further review.
Because a removal order can be appealed under Section 1447(d), like an order certified for interlocutory
appeal under Section 1292(b), the majority reasoned that an appeals court can review any ground for
removal included within the order.
The majority rejected Baltimore’s argument that expanding appellate review of removal orders would
delay litigation of the merits of a case. The majority noted that Congress accepted the potential delay
when it allowed appeal of removal orders in cases removed under the federal-officer and the civil-rights
removal statutes. The Court declined to consider the merits of the other grounds for removal that the fossil
fuel producers had raised, vacating the Fourth Circuit’s decision and remanding the case so that the
Fourth Circuit could consider them for the first time.
In her dissent, Justice Sotomayor argued that Section 1447(d) “does not speak clearly” to how the
provision applies to cases removed on multiple grounds that include federal-officer or civil-rights
removal. In reviewing possible interpretations of Section 1447(d), she reasoned that the majority’s
interpretation stretches the exceptions to the bar on appellate review of removal orders “too far,” allowing
defendants to “bootstrap” their removal arguments for appellate review “by tacking on an argument under
§1442 or §1443.” She argued that restricting appellate review to the federal-officer or civil-rights removal
statute grounds “best accords” with “‘Congress’s longstanding policy of not permitting interruption of the
litigation of the merits of a removed case’ with lengthy jurisdictional disputes.” She asserted that the
majority’s interpretation “opens a back door to appellate review that would otherwise be closed to” the
defendants, further delaying litigation on the merits.
Effect on Climate Liability Suits
Baltimore’s lawsuit is one of more than 20 similar suits that state and local governments have filed since
2017, seeking to hold fossil fuel producers liable for climate change-related damages under state
nuisance, negligence, or consumer fraud laws. Many of these suits face similar issues related to court
venue and challenges to the scope of appellate review of removal orders under Section 1447(d).
As a result of the Supreme Court’s Baltimore ruling, four appellate courts will review all grounds seeking
to remove climate suits to state courts in those pending cases. In addition to the remand to the Fourth
Circuit in the Baltimore suit, the Supreme Court granted petitions that raised the same Section 1447(d)
issue in climate liability suits filed by the state of Rhode Island, several cities and counties in California,
and the Board of County Commissioners of Boulder County in Colorado. The Court cited its Baltimore
ruling in vacating decisions from the U.S. Courts of Appeals for the First, Ninth, and Tenth Circuits,
respectively, and remanded the cases to expand review to all grounds for removal to federal court, further
delaying litigation of the merits of these suits. These federal courts of appeals will address, among other
grounds, whether the suits should be removed to federal court because the state claims raise federal
questions or are preempted by the CAA. If not for the Supreme Court’s decision in Baltimore, the state
courts would have proceeded to adjudicate the merits of these cases to decide whether federal questions
(including preemption) are viable defenses to the liability claims.
Fossil fuel producers have sought to remove the state climate liability cases to federal court, where
previous attempts to hold major sources of GHG emissions liable for climate change-related injuries have
failed. In 2011, the Supreme Court held in American Electric Power Co. v. Connecticut (AEP) that the
CAA displaced the federal common law interstate nuisance claim seeking an injunction limiting GHG
emissions from power plants. The Court explained that a federal statute displaces federal common law if
the statute “‘speak[s] directly to [the] question’ at issue.” In 2012, the Ninth Circuit held in Native Village
of Kivalina v. ExxonMobil Corp. that the Supreme Court’s reasoning in AEP also precludes federal
common law claims seeking monetary damages, rather than injunctive relief. Federal district courts have
also dismissed other federal common law nuisance suits seeking climate change-related damages because

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the courts found that the claims were displaced by the CAA or raised nonjusticiable questions that only
the political branches can resolve.
Two federal appellate decisions have exercised jurisdiction to consider the kinds of removal arguments
that, after Baltimore, are now more broadly subject to appellate review. In May 2020, the Ninth Circuit
addressed these removal grounds in an appeal by the cities of Oakland and San Francisco. The federal
district court in that case had denied a remand to state court, an order that is not subject Section 1447(d),
and had dismissed the cities’ climate liability suit. In City of Oakland v. BP, the Ninth Circuit reversed the
dismissal and ordered the district court to reconsider whether a remand to state court was warranted. The
Ninth Circuit held that the federal district court did not have jurisdiction over the state-law public
nuisance claim because it did not require resolution of a substantial question of federal law. The court also
rejected the fossil fuel producers’ argument that the state-law nuisance claim raised federal questions
because the claim is completely preempted by the CAA. The court explained that “the statutory language
does not indicate that Congress intended to preempt ‘every state law cause of action within the scope’ of
the Clean Air Act” and that the CAA does not include a “substitute” federal claim for “nuisance caused by
global warming.” The Ninth Circuit ordered the state-law nuisance claims to proceed in state court unless
the lower court found an alternative basis for federal jurisdiction over the climate liability claims.
Although federal preemption was an insufficient basis for federal court jurisdiction, the court noted that
federal preemption can still be raised as a defense against the claims in state court. Even if the Ninth
Circuit’s decision results in a remand of the cities’ claims to state court, the appeal of the district court’s
remand order took approximately 21 months from filing to decision—highlighting the concern that the
Supreme Court’s Baltimore decision will cause delays in adjudicating state-law climate liability claims.
An April 2021 decision in the U.S. Court of Appeals for the Second Circuit illustrates how the merits of
climate liability suits might fare in federal courts. In City of New York v. Chevron Corp., the Second
Circuit affirmed the dismissal of New York City’s lawsuit seeking climate change damages from fossil
fuel producers under state nuisance laws. Unlike the Oakland case in the Ninth Circuit, the City filed its
suit in federal district court and did not involve court venue issues present in the Oakland and Baltimore
cases. The Second Circuit held that federal common law displaced the City’s state-law claims against
fossil fuel producers because applying New York law would conflict with federal interests in creating a
uniform federal policy on regulating GHG emissions nationally. The court reasoned that a substantial
damage award under state law would regulate cross-border GHG emissions indirectly by compelling
fossil fuel producers to change or cease their production of fossil fuels. The Second Circuit then
concluded that the CAA displaced the City’s federal common law claims for injunctions and damages,
citing the rulings in AEP and Native Village of Kivalina. Rejecting the City’s argument that those rulings
should not apply, the court determined that the substance of the City’s claim regarding the production and
sale of fossil fuels was essentially the same as claims against GHG emitters because the injuries allegedly
resulted from GHG emissions.
Considerations for Congress
Stakeholders across the globe are turning increasingly to the judicial system to force governments, GHG
emitters, and fossil fuel producers to take action on climate change or to take responsibility for actions
contributing to climate change. For example, on May 26, 2021, a Dutch district court held that Royal
Dutch Shell PLC violated the standard of care under Dutch law and ordered the company to reduce its
GHG emissions by 45 percent by 2030, relative to 2019, including emissions from its own operations and
from end-users of its products. This decision follows judicial rulings this year in Germany and France that
held that their national governments failed to take sufficient action to address climate change.
In the United States, Baltimore and other climate liability suits represent part of domestic efforts to
address climate changes and its effects. In the United States, the Biden Administration, among other
initiatives, set new goals to reduce GHG emissions by 50-52 percent from 2005 levels by 2030 as part of

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rejoining the Paris Agreement. Meanwhile, Congress continues to debate varying legislative proposals to
balance economic and environmental interests across industrial sectors and geographic regions.
Without legislative clarification or direction on climate change concerns, state and local governments will
continue to seek relief for climate-change related injuries through the courts. As a result, the courts will
play a large role in defining the scope of appellate review, the appropriate venue for climate liability suits,
and the applicability of federal versus state law. The Supreme Court is considering petitions to review the
Ninth Circuit’s decision in City of Oakland v. BP to remand to state court. Congress could consider
legislation that specifies which state law claims are removable to federal court or clarify when federal law
would preempt the kinds of state law claims at issue in the climate liability suits. As an alternative to
litigation, Congress could devise a legislative scheme to provide financial assistance to state and local
governments to prevent or address injuries related to climate change impacts.

Author Information

Linda Tsang

Legislative Attorney

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