The People of the State of California v. BP P.L.C.

Background

The two related lawsuits were filed in state court and removed to federal court. Oakland and The People of the State of California alleged that six oil companies produced and promoted gasoline and other fossil-fuel products worldwide while concealing that burning those products would accelerate global warming, melt polar ice, and raise sea levels. The court noted that whether the complaints state a claim under California public-nuisance law would be decided by California courts. The issue in this order was whether federal jurisdiction supported removal.

The Ninth Circuit had previously held that the complaints asserted only a state-law public-nuisance claim and that the earlier federal-question theories did not support removal. It sent the cases back for consideration of other possible jurisdictional grounds. The court then considered the renewed remand motions in light of later Ninth Circuit decisions addressing similar global-warming lawsuits.

Reasons for remand

The court rejected federal jurisdiction under the Outer Continental Shelf Lands Act. Although the complaints emphasized fossil-fuel production and some production occurred on the outer Continental Shelf, the Ninth Circuit had held that the connection between offshore extraction and the alleged local injuries was too remote.

The court also rejected federal-enclave jurisdiction. The defendants pointed to operations and fuel sales connected to federal property, including the Elk Hills Naval Petroleum Reserve and military bases. Following Ninth Circuit precedent, the court held that the alleged injuries were not directly connected to conduct on federal enclaves. The complaints instead focused on the companies’ production, sale, and promotion of fossil fuels and the resulting injuries in local jurisdictions.

The defendants argued that the claims raised a substantial federal question under the rule recognized in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing. They contended that the First Amendment imposed constitutional requirements on claims involving commercial speech and lobbying. The court rejected this theory, following Ninth Circuit decisions holding that First Amendment limits on state-law claims involving speech do not create federal jurisdiction over those claims.

The court also rejected federal-officer jurisdiction. That jurisdiction can apply when a private party acted under the direction of a federal officer, asserted a colorable federal defense, and showed a causal connection between the federally directed conduct and the claims. The court held that the defendants had not shown the required close federal direction. It rejected theories based on the Second World War, military fuel contracts, leases, federal reserves, and the strategic petroleum reserve, relying on Ninth Circuit decisions holding that regulation, compliance with government requirements, and arm’s-length contracts to supply products do not establish that a private company acted under a federal officer.

The defendants did not renew their bankruptcy-jurisdiction argument, so the court treated that theory as waived and insufficient under the cited Ninth Circuit authority. After rejecting all the asserted grounds, the court concluded that remand was required.

Earlier personal-jurisdiction dismissal

The plaintiffs also asked the court to vacate its earlier order dismissing the complaints against BP, ConocoPhillips, Exxon Mobil, and Shell for lack of personal jurisdiction. Those defendants sought entry of a partial final judgment dismissing them from the case. The court concluded that considerations of fairness and respect between courts favored vacating the earlier dismissal so both sides would have a clean slate in state court. The court expressly stated that vacating the order did not change its view of the personal-jurisdiction issue.

Disposition

Judge William Alsup granted the motion to remand and vacated the personal-jurisdiction dismissal order. The effect of the order was stayed until all appeals were exhausted. The court set a further status conference for March 23, 2023.