Fourth Circuit Says Climate Lawsuit Against Energy Companies Belongs in State Court

By Joseph Fawbush, Esq. on March 06, 2020 | Last updated on August 10, 2021

We've previously written about three separate but related lawsuits against energy companies alleging that they knowingly lied and engaged in misinformation campaigns about the risks of climate change. In all three, which were brought in state courts, venue has been a hotly contested issue. On Friday, March 6, the Fourth Circuit Court of Appeals became the first U.S. appeals court to weigh in on whether state courts can hear these cases.

Climate Change as a Public Nuisance

The case before the Fourth Circuit panel involved Maryland nuisance claims brought by the City of Baltimore. The city is seeking money and other damages for the role energy companies played in contributing to fossil fuel emissions, thereby causing harm to the city and the public. If the case does reach the merits, it will be the first to test whether public nuisance laws can apply to climate change.

The city brought the claims in Maryland state court. The defendant energy companies sought to remove the cases to federal court, where the lawsuits would face an uphill battle. On our Supreme Court blog, I noted that the Supreme Court justices recently rejected stays of those lawsuits without comment. Meanwhile, the First, Fourth and Tenth Circuits will all weigh in on venue.

4th Circuit: State Court Is Appropriate

The Fourth Circuit held that removal to federal court was inappropriate. While energy companies alleged eight reasons for removal, the Fourth Circuit noted that it was prohibited from reviewing a remand order except under very specific statutory circumstances. Here, the panel looked at whether federal courts have jurisdiction under the federal officer removal statute. The energy companies argued that they were acting as an agent of the federal government because of contractual relationships. For example, Citgo had a long-standing contract to supply fuel to the U.S. Navy, who would resell it at a discount to Navy servicemembers and veterans. The panel was unconvinced that energy companies were acting under a federal officer, however, as required by the statute. The panel similarly dismissed other related claims.

Will SCOTUS Think So?

The energy companies are almost certain to appeal. However, it is not clear that the Supreme Court will hear this case or the others. Meanwhile, the appeal's failure means that the litigation continues in state court. While the outcome of that case remains uncertain, Baltimore almost certainly has a better chance in state court than federal.

Should other circuits allow removal to federal courts, it would provide a greater incentive for the Supreme Court to take up the issue next term.

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