State of Minnesota v. American Petroleum Institute

Background

Minnesota sued American Petroleum Institute, Exxon Mobil Corporation, ExxonMobil Oil Corporation, Koch Industries, Inc., Flint Hills Resources, LP, and Flint Hills Resources Pine Bend in state court. The complaint asserted five causes of action under Minnesota law: violations of the Minnesota Consumer Fraud Act; failure to warn under strict-liability and negligence theories against all defendants except American Petroleum Institute; common-law fraud and misrepresentation; violations of the Minnesota Deceptive Trade Practices Act; and violations of the Minnesota False Statement in Advertising Act.

The State alleged that the defendants had perpetrated and directed a misinformation campaign over several decades that misled the public about the dangers of fossil fuels and their connection to climate change. The defendants removed the case to federal court, asserting seven possible grounds for federal jurisdiction. The court previously concluded that it lacked jurisdiction and granted Minnesota’s motion to remand, meaning that the case was to return to state court. The defendants appealed that remand order and sought a stay, which would pause execution of the remand while the appeal was pending. Minnesota separately requested attorney fees and costs related to the removal.

Motion to Stay

The court applied the factors governing a stay pending appeal: the applicant’s likelihood of success, the likelihood of irreparable harm without a stay, the harm to the opposing party, and the public interest. The court found that the likelihood-of-success factor was a close question. It said that decisions from the Second Circuit and the Supreme Court had increased the possibility that the defendants could succeed on appeal, although those decisions did not resolve the merits of the jurisdictional questions in this case. The court concluded that the defendants had shown more than a mere possibility of relief.

The court rejected the defendants’ argument that litigation expenses alone constituted irreparable harm. It nevertheless found a sufficient risk of irreparable harm because the state court might decide the merits of the claims or issue dispositive rulings before the federal appeal was completed. Such rulings could make a later appellate victory effectively meaningless.

The court also found that staying the case would conserve judicial resources and avoid duplicative litigation in state and federal courts. Although Minnesota and the public had an interest in promptly pursuing the claims, the court concluded that the public also had an interest in allowing the Eighth Circuit to address the significant jurisdictional questions before state-court litigation began. The court noted that the balance could change over time and that it might reassess the stay if the appeal remained unresolved twelve months after the order.

Attorney Fees

Under 28 U.S.C. § 1447(c), a court may award fees and costs incurred because of removal when the removing party lacked an objectively reasonable basis for removal. The court found that the defendants had an arguable basis for asserting federal jurisdiction. It emphasized that the jurisdictional issues were complex, involved evolving areas of law, and had not yet been addressed by the Eighth Circuit. The court therefore concluded that an award of fees and costs was unwarranted.

Disposition

Judge John R. Tunheim granted the defendants’ Motion to Stay Execution of the Remand Order. He denied Minnesota’s Motion for Attorney Fees. The order did not decide the underlying state-law claims.