Sierra Club, Inc. v. Exxon Mobil Corporation

Background

The order addresses two related lawsuits against Exxon Mobil Corporation. The People of the State of California, acting through the state attorney general, filed one action in California state court. Sierra Club, Inc., Surfrider Foundation, Inc., Heal the Bay, Inc., Baykeeper, Inc., and other nonprofit organizations filed the other action in the same state court. The complaints alleged that Exxon misled the public about whether recycling could solve the plastic-waste crisis and contributed to plastic pollution.

California asserted six state-law claims and sought nuisance abatement, injunctions concerning Exxon’s public statements about plastics recycling, other equitable relief, monetary penalties authorized by state statutes, and fees and costs. The nonprofit plaintiffs asserted two similar state-law claims and sought injunctive relief, damages, and fees and costs. Exxon removed both cases to federal court.

Exxon’s jurisdictional arguments

For the nonprofit plaintiffs’ case, Exxon relied on diversity jurisdiction and the Class Action Fairness Act. The nonprofit plaintiffs did not dispute that complete diversity and the required amount in controversy existed. Exxon argued that the complaint was effectively a class action because the plaintiffs sought relief on behalf of themselves and the California public.

For California’s case, Exxon asserted maritime jurisdiction, federal question jurisdiction based on the federal enclave doctrine, and federal officer jurisdiction. Federal enclave jurisdiction concerns claims connected to land under federal authority. Federal officer jurisdiction can permit removal when a defendant acted under the direction of a federal officer and can assert a legally supportable federal defense connected to that conduct.

California’s motion to remand

The court granted California’s motion to remand.

Federal enclave jurisdiction

The court held that federal enclave jurisdiction did not apply. California’s complaint expressly disclaimed injuries and relief arising on federal lands, including federal enclaves. The court also concluded that the alleged claims concerned Exxon’s messaging, corporate decisions, and promotion of plastics recycling—not injuries located in federal enclaves. The fact that plastic pollution might reach some areas that have been treated as federal enclaves did not establish that those enclaves were the locations of California’s claims.

Federal officer jurisdiction

The court rejected Exxon’s federal officer theory. Exxon relied on contracts between the federal government and Exxon’s predecessors to produce synthetic rubber for wartime military use. The court found that argument disconnected from California’s claims, which concerned alleged deception about plastic recycling rather than rubber production. It concluded that Exxon had not shown that the challenged conduct occurred because of federal directions or that it had a legally supportable federal-contractor-immunity defense tied to the claims.

Maritime jurisdiction

The court also concluded that maritime jurisdiction did not support removal. Under the “saving to suitors” rule, a state-court maritime claim against a person generally remains in state court unless another basis for federal jurisdiction exists. Because Exxon had not established another jurisdictional basis, maritime jurisdiction alone could not support removal.

The court further held that California’s claims were not maritime in nature. The alleged tort was deception about plastics recycling, not the act of depositing plastic into navigable waters, and the complaint did not involve vessels causing harm on land. The alleged deceptive conduct also lacked a substantial relationship to traditional maritime activity.

Nonprofit plaintiffs’ motion to remand

The court denied the nonprofit plaintiffs’ motion to remand. It found that diversity jurisdiction unquestionably applied to their case.

The nonprofit plaintiffs argued that the court should abstain—meaning decline to exercise its jurisdiction—under the Younger doctrine or the Colorado River doctrine because California’s related state case was ongoing. The court found that Younger abstention was not warranted because the nonprofit plaintiffs’ federal lawsuit did not seek to stop or interfere with the state proceeding. It also rejected the proposed use of the Colorado River doctrine, finding no controlling authority allowing a district court to remand a case properly removed under diversity jurisdiction and concluding that the precedent cited by the plaintiffs was distinguishable and possibly incorrect.

Disposition

The court granted California’s motion to remand and denied the nonprofit plaintiffs’ motion to remand. The court ordered that California’s case be remanded to state court. It granted a short administrative stay of that remand order until 42 days after the ruling. The parties were ordered to submit, within seven days, a stipulated schedule for briefing on whether a longer stay pending appeal was appropriate.