Court revives federal appeal for oil and gas companies in climate-change case

Court revives federal appeal for oil and gas companies in climate-change case

Opinion analysis

By Amy Howe

at 5:21 pm

The Supreme Court on Monday gave a major boost to a group of oil and gas companies trying to stay out of state court and instead defending a lawsuit in federal court. In a 7-1 vote (which Samuel Alito failed to attend), the judges agreed with companies – including BP, Chevron, and Exxon Mobil – that a federal appeals court had the power to review an entire order that the case is being returned to State Court, and not just one of the reasons companies relied on moving the case to federal court.

The BP PLC v. Baltimore Mayor and City Council originated three years ago as a lawsuit brought by the City of Baltimore to blame companies for their role in climate change. The city claims that the companies knew that using fossil fuels would lead to global warming, but continued to produce and sell fossil fuels.

The Supreme Court failed to weigh the merits of the city’s case. Instead, the battle in court was over the trial. The city filed its case in a Maryland court. But defendants, especially non-state corporations, sometimes try to bring lawsuits to federal courts, especially if they believe the judge or jury there will be more beneficial to them or if they want to take advantage of federal rules. That’s exactly what Chevron did in this case: the lawsuit was brought to federal court in Maryland – a process known as “removal.” The city then asked the federal district court to refer the case back to the regional court, and the district court agreed – a process known as “pre-trial detention”. The companies appealed this decision to the U.S. 4th Circuit Court of Appeals.

Typically, most of the orders sent back a case to a state court cannot be appealed. However, federal law provides two narrow exceptions if the defendant relies on a law known as the Federal Civil Service Removal Act that allows lawsuits against federal civil servants to be transferred to a federal court or a separate law that provides for the elimination of civil rights cases. The companies had relied on the Federal Officials Act as one of eight reasons to refer the case to federal court, arguing that the city was trying to hold them accountable for the work they had done on orders from federal officials.

The 4th court ruled that it could only check whether the removal was appropriate under the Federal Civil Service Act – which it was not. The 4th Circuit declined to hear the companies’ attempt to appeal the district court’s rejection of the other seven alleged reasons for removal. The Supreme Court ruled Monday that the 4th circuit was wrong. In a ruling by Judge Neil Gorsuch, the court clarified that a federal appeals court can review the entire district court’s pre-trial detention if any of the grounds for the removal can be challenged.

The court rejected the city’s claim that allowing appeals against investigative warrants would delay the case. Congress has already created the option for a delay by allowing appeals in cases that have been removed under the Federal Officials Act and Civil Rights Act, Gorsuch noted. In any case, Gorsuch continued: “Even the most terrible political arguments cannot” overcome “a clear legal guideline.” And if that is not the result that Congress wants, Gorsuch added, it is free to change the law.

The court didn’t give the companies everything they hoped for. The court declined to consider the other reasons put forward by the companies for the removal and instead sent the case back to the 4th Circuit for a first review.

Justice Sonia Sotomayor disagreed. She complained that the exception would “swallow the rule” based on the court’s decision. The defendants, she alleged, could “circumvent” the general barring of lawyers for reviewing the appeal of pre-trial detention orders by “immersing” an argument under the Federal Civil Service Act or the Civil Rights Act “in their deportation case.”

Alito, who has disclosed investments in two of the energy companies involved in the lawsuit, has been expelled from the case.

This article was originally published by Howe on the Court.