DC v. Exxon Mobil Corporation
Citation89 F.4th 144
Date Filed2023-12-19
Docket22-7163
Cited6 times
StatusPublished
Full Opinion (html_with_citations)
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 8, 2023 Decided December 19, 2023
No. 22-7163
DISTRICT OF COLUMBIA,
APPELLEE
v.
EXXON MOBIL CORPORATION, ET AL.,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 1:20-cv-01932)
Kannon K. Shanmugam argued the cause for appellants.
With him on the briefs were Theodore J. Boutrous, Jr., Thomas
G. Hungar, Justin Anderson, William T. Marks, Theodore V.
Wells, Jr., Daniel J. Toal, David C. Frederick, Grace W.
Knofczynski, Daniel S. Severson, James W. Cooper, Ethan
Shenkman, Nancy G. Milburn, Diana E. Reiter, John D.
Lombardo, and Jonathan W. Hughes.
Theodore E. Rokita, Attorney General, Office of the
Attorney General for the State of Indiana, Thomas M. Fisher,
Solicitor General, James A. Barta, Deputy Solicitor General,
Steve Marshall, Attorney General, Office of the Attorney
2
General for the State of Alabama, Treg Taylor, Attorney
General, Office of the Attorney General for the State of Alaska,
Tim Griffin, Attorney General, Office of the Attorney General
for the State of Arkansas, Christopher M. Carr, Attorney
General, Office of the Attorney General for the State of
Georgia, Kris Kobach, Attorney General, Office of the
Attorney General for the State of Kansas, Daniel Cameron,
Attorney General, Office of the Attorney General for the
Commonwealth of Kentucky, Lynn Fitch, Attorney General,
Office of the Attorney General for the State of Mississippi,
Austin Knudsen, Attorney General, Office of the Attorney
General for the State of Montana, Michael T. Hilgers, Attorney
General, Office of the Attorney General for the State of
Nebraska, Alan Wilson, Attorney General, Office of the
Attorney General for the State of South Carolina, Ken Paxton,
Attorney General, Office of the Attorney General for the State
of Texas, Sean D. Reyes, Attorney General, Office of the
Attorney General for the State of Utah, Bridget Hill, Attorney
General, Office of the Attorney General for the State of
Wyoming, were on the brief for amici curiae Indiana and 13
Other States in support of appellants.
Andrew R. Varcoe, Stephanie A. Maloney, William M. Jay,
and Andrew Kim, were on the brief for amicus curiae the
Chamber of Commerce of the United States of America in
support of appellants.
Ashwin P. Phatak, Principal Deputy Solicitor General,
Office of the Attorney General for the District of Columbia,
argued the cause for appellee. With him on the brief were
Hassan A. Zavareei, Anna C. Haac, Victor M. Sher, Brian L.
Schwalb, Attorney General, Office of the Attorney General for
the District of Columbia, Caroline S. Van Zile, Solicitor
General, Thais-Lyn Trayer, Deputy Solicitor General, and Lucy
E. Pittman, Senior Assistant Attorney General.
3
Deepak Gupta was on the brief for amici curiae Law
Professors in support of appellee.
Alison S. Gaffney and Daniel P. Mensher were on the brief
for amici curiae Robert Brulle, et al. in support of appellee.
Sathya S. Gosselin was on the brief for amici curiae the
National League of Cities, et al. in support of appellee.
Letitia James, Attorney General, Office of the Attorney
General for the State of New York, Barbara D. Underwood,
Solicitor General, Matthew W. Grieco, Senior Assistant
Solicitor General, Rob Bonta, Attorney General, Office of the
Attorney General for the State of California, William Tong,
Attorney General, Office of the Attorney General for the State
of Connecticut, Kathleen Jennings, Attorney General, Office
of the Attorney General for the State of Delaware, Anne E.
Lopez, Attorney General, Office of the Attorney General for
the State of Hawaiâi, Kwame Raoul, Attorney General, Office
of the Attorney General for the State of Illinois, Aaron M. Frey,
Attorney General, Office of the Attorney General for the State
of Maine, Anthony G. Brown, Attorney General, Office of the
Attorney General for the State of Maryland, Andrea Joy
Campbell, Attorney General, Office of the Attorney General
for the Commonwealth of Massachusetts, Dana Nessel,
Attorney General, Office of the Attorney General for the State
of Michigan, Keith Ellison, Attorney General, Office of the
Attorney General for the State of Minnesota, Matthew J.
Platkin, Attorney General, Office of the Attorney General for
the State of New Jersey, Raul Torrez, Attorney General, Office
of the Attorney General for the State of New Mexico, Ellen F.
Rosenblum, Attorney General, Office of the Attorney General
for the State of Oregon, Michelle A. Henry, Attorney General,
Office of the Attorney General for the Commonwealth of
4
Pennsylvania, Peter F. Neronha, Attorney General, Office of
the Attorney General for the State of Rhode Island, Robert W.
Ferguson, Attorney General, Office of the Attorney General
for the State of Washington, and Joshua L. Kaul, Attorney
General, Office of the Attorney General for the State of
Wisconsin, were on the brief for amici curiae State of New
York, et al. in support of appellee.
Before: KATSAS, RAO and PAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge RAO.
RAO, Circuit Judge: The District of Columbia sued several
energy companies in the Superior Court of the District of
Columbia, alleging the companies violated District law by
making material misstatements about their productsâ effects on
climate change. The defendants removed the case to the federal
district court, which determined it lacked jurisdiction and
remanded.
We agree that remand was proper. Under the time honored
well-pleaded complaint rule, it is the cause of action chosen by
the plaintiff that governs whether a lawsuit may be filed in
federal court. Here, the District did not invoke a federal cause
of action but relied instead on the District of Columbiaâs
consumer protection statute. The companies raise what amount
to federal defenses, but that is not enough to establish federal
jurisdiction over the Districtâs claims.
I.
The District of Columbia sued Exxon Mobil, Shell, BP,
and Chevron, as well as various subsidiary entities
(âCompaniesâ), in the Superior Court of the District of
Columbia. According to the District, the Companies deceived
5
consumers about the causal link between fossil fuel usage and
climate change. Specifically, the District alleges the
Companies inaccurately advertised their fossil fuel products as
âgreenâ and âcleanâ and failed to warn consumers about the
productsâ effects on the climate. These âgreenwashing
campaignsâ led District consumers to purchase more fossil
fuels, and thus contribute more to climate change, than they
otherwise would have. Relying exclusively on the District of
Columbia Consumer Protection Procedures Act (âCPPAâ), the
District maintains that the Companiesâ advertisements and
information campaigns about fossil fuels were âunfair or
deceptive trade practices.â D.C. CODE § 28-3904. The District
requested a permanent injunction barring the Companies from
violating the CPPA, as well as damages and civil penalties.
The Companies removed the case to the United States
District Court for the District of Columbia. They argued that
the consumer protection suit was in fact part of a coordinated
campaign to alter the nationâs energy policy, circumventing
federal environmental policy decisions by obtaining favorable
judgments in state courts. The Companies advanced several
grounds for federal jurisdiction, which the District Court
rejected, remanding the case to the Superior Court of the
District of Columbia.
The Companies appealed. Ordinarily we lack jurisdiction
over the appeal of a remand order, but Congress has provided
an exception for cases removed pursuant to the federal officer
removal statute. 28 U.S.C. § 1447(d). Because the Companies invoked the federal officer removal statute as one of their grounds for removal, the appeal is properly before us. Moreover, we may âconsider all of the defendantsâ grounds for removal,â not merely whether removal is appropriate under the federal officer removal statute. BP p.l.c. v. Mayor of Baltimore,141 S. Ct. 1532, 1543
(2021). The remand order goes to subject
6
matter jurisdiction, and so our review is de novo. Capitol Hill
Grp. v. Pillsbury, Winthrop, Shaw, Pittman, LLC, 569 F.3d
485, 489 (D.C. Cir. 2009).
II.
An action may be removed to federal court when it âcould
have been brought originally in federal court.â Home Depot
U.S.A., Inc. v. Jackson, 139 S. Ct. 1743, 1748(2019); see also28 U.S.C. § 1441
(a) (âExcept as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant.â);id.
§ 1451 (âThe term âState courtâ includes the Superior Court of the District of Columbia.â). The Companies maintain federal jurisdiction is appropriate because: (i) the Districtâs suit arises under federal common law; (ii) the Districtâs suit raises disputed and substantial federal questions, so it may be removed under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing,545 U.S. 308
(2005); (iii) the federal officer removal statute applies; and (iv) removal is proper pursuant to the Outer Continental Shelf Lands Act, Pub. L. No. 212,67 Stat. 462
(1953) (codified at43 U.S.C. §§ 1331
et seq.).
None of these grounds justifies removal of the Districtâs
suit, and we thus affirm the district courtâs order remanding the
case to the Superior Court. In reaching this conclusion, we are
in accord with the other courts of appeals, which have
unanimously found there is no federal jurisdiction where state
or local governments have brought state-law actions against
energy companies for conduct relating to climate change. 1
1
The Districtâs suit is similar to many that state governments have
brought in state courts, alleging that energy companies have
7
A.
The Companies first maintain that the Districtâs claim,
even if ostensibly brought under the CPPA, actually turns on
the federal common law of interstate air pollution and therefore
arises under federal law. 28 U.S.C. § 1331 (providing district
courts âoriginal jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United Statesâ). We
disagree.
For over a century, American courts have applied the well-
pleaded complaint rule, under which â[a] suit arises under the
law that creates the cause of action.â Am. Well Works Co. v.
Layne & Bowler Co., 241 U.S. 257, 260(1916). The fact that a lawsuit will likely turn on a federal question is generally insufficient to confer federal jurisdiction if the plaintiff proceeds under a state-law cause of action. Even if it is âvery likely, in the course of the litigation,â that a federal question will arise, that does ânot show that the suit ⌠arises underâ federal law. Louisville & Nashville R.R. Co. v. Mottley,211 U.S. 149, 152
(1908). Moreover, âit is ⌠settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiffâs complaint, and even if promoted fossil fuels while concealing their impacts on climate change. In each of these cases, the companies have removed to federal court, only to have the suits remanded to state court. See Connecticut v. Exxon Mobil Corp.,83 F.4th 122
(2d Cir. 2023); Minnesota v. Am. Petroleum Inst.,63 F.4th 703
(8th Cir. 2023); City of Hoboken v. Chevron Corp.,45 F.4th 699
(3d Cir. 2022); Rhode Island v. Shell Oil Prods. Co.,35 F.4th 44
(1st Cir. 2022); Mayor of Baltimore v. BP p.l.c.,31 F.4th 178
(4th Cir. 2022); Bd. of Cnty. Commârs of Boulder Cnty. v. Suncor Energy (U.S.A.) Inc.,25 F.4th 1238
(10th Cir. 2022); City of Oakland v. BP p.l.c.,969 F.3d 895
(9th Cir. 2020).
8
both parties concede that the federal defense is the only
question truly at issue.â Caterpillar Inc. v. Williams, 482 U.S.
386, 393 (1987).
It is undisputed that the Districtâs complaint pleads only
District law violations under the CPPA, which is part of the
D.C. Code and enacted pursuant to the District of Columbiaâs
legislative power over âall rightful subjects of legislation
within the District.â D.C. CODE § 1-203.02; District of
Columbia Self-Government and Governmental Reorganization
Act, Pub. L. No. 93-198, tit. III, § 302,87 Stat. 774
, 784 (1973). Congress has explicitly defined the âlaws of the United Statesâ not to include âlaws applicable exclusively to the District of Columbia.â28 U.S.C. § 1366
. It follows that the Districtâs suit, which arises under the CPPA, does not arise under the âlaws ⌠of the United States.â28 U.S.C. § 1331
.
Nonetheless, the Companies argue that removal is
appropriate under the âartful pleadingâ doctrine, which permits
removal in rare instances when âa cause of action in the
plaintiffâs complaint, if properly pled, would pose a federal
question and make the case removableâ but the plaintiff has
attempted to frustrate removal âby pleading [the] case without
reference to any federal law.â CHARLES ALAN WRIGHT ET AL.,
14C FEDERAL PRACTICE & PROCEDURE § 3722.1 (4th ed.
2018). Under this corollary to the well-pleaded complaint rule,
the Companies say the Districtâs CPPA claimsâthat the
Companies misled the public about climate change and that
their production and promotion of fossil fuels contributed to
climate changeâin fact rest on the federal common law of
interstate air pollution. If we conclude the District âhas âartfully
pleadedâ claims in this fashion, [we] may uphold removal even
though no federal question appears on the face of the
[Districtâs] complaint.â Rivet v. Regions Bank of La., 522 U.S.
470, 475 (1998).
9
The artful pleading doctrine paradigmatically allows
removal when a state-law cause of action is completely
preempted by a federal statute. In that circumstance, any âclaim
which comes within the scope of that cause of action, even if
pleaded in terms of state law, is in reality based on federal law.â
Beneficial Natâl Bank v. Anderson, 539 U.S. 1, 8(2003). The Supreme Court has found complete preemption in only three instances, and in each case a statute âclearly manifestedâ that federal law wholly displaced state law. See Avco Corp. v. Aero Lodge No. 735,390 U.S. 557
, 560â61 (1968) (section 301 of the Labor Management Relations Act); Metro. Life Ins. Co. v. Taylor,481 U.S. 58, 66
(1987) (section 502(a) of the Employee Retirement Income Security Act); Beneficial Natâl Bank, 539 U.S. at 10â11) (sections 85 and 86 of the National Bank Act); see also Empire HealthChoice Assurance, Inc. v. McVeigh,547 U.S. 677, 698
(2006) (âIf Congress intends a preemption
instruction completely to displace ordinarily applicable state
law, and to confer federal jurisdiction thereby, it may be
expected to make that atypical intention clear.â). The
Companies, however, do not argue that Congress has
completely preempted the Districtâs CPPA suit.
Instead, the Companies suggest the federal common law
of interstate air pollution might be âanalogous in some respects
to complete preemption,â such that the Districtâs claim, even if
brought under the CPPA, should be understood as grounded in
federal common law. They rely on Illinois v. City of Milwaukee
(âMilwaukee Iâ), which explained that nuisance actions
âdeal[ing] with air and water in their ambient or interstate
aspectsâ were traditionally governed by federal common law
in light of the âoverriding federal interest in the need for a
uniform rule of decision.â 406 U.S. 91, 103, 105 n.6 (1972). This federal common law thereby displaced âthe varying ⌠law of the individual States.âId.
at 107 n.9 (cleaned up).
10
The Companies admit their reliance on federal common
law is not an orthodox application of the doctrine of complete
preemption, which turns on whether Congress has clearly
provided for complete preemption in a federal statute.
Nonetheless they argue that when a state-law action is
necessarily governed by federal common law, the artful
pleading doctrine should allow for removal to federal court for
such claims. But federal common law does not support removal
here.
1.
To begin with, it is unclear whether federal common law
could serve as the basis for removal under the artful pleading
doctrine. The Supreme Court has suggested that artful pleading
may be limited to complete preemption. See Beneficial Natâl
Bank, 539 U.S. at 8(â[A] state claim may be removed to federal court in only two circumstancesâwhen Congress expressly so provides ⌠or when a federal statute wholly displaces the state- law cause of action through complete pre-emption.â); see also 14C FEDERAL PRACTICE & PROCEDURE § 3722.1 (âThe absence from [Rivet,522 U.S. at 475
] of any reference to a category of artful pleading that is conceptually distinct from the complete preemption doctrine hints that completely preempted claims may be the only claims to which the artful-pleading doctrine should apply.â). And the Court has rejected the idea that there might be some generic artful pleading basis for federal jurisdiction. See, e.g., Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning,578 U.S. 374
, 392â93 (2016) (âWe have
no idea how a court wouldâ âgo behind the face of a complaint
to determine whether it is the product of âartful pleading.ââ).
But even assuming federal common law could provide a basis
for removal under the artful pleading doctrine, the Companiesâ
argument fails as there is no longer any relevant federal
common law that might displace the Districtâs CPPA claim.
11
The Clean Air Act comprehensively regulates air pollution
at a national level, and the Supreme Court has held that the Act
displaces the federal common law and provides the relevant
body of federal law for nuisance actions involving interstate air
pollution. Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 424 (2011) (explaining âthe Clean Air Act and the EPA actions it authorizes displace any federal common-law rightâ to bring interstate air pollution actions). Federal common law, whereby the federal courts apply uniform, judicially crafted rules of decision, âplays a necessarily modest role under a Constitution that vests the federal governmentâs âlegislative Powersâ in Congress and reserves most other regulatory authority to the States.â Rodriguez v. FDIC,140 S. Ct. 713, 717
(2020); see U.S. CONST. art. I, § 1 (vesting â[a]ll legislative Powersâ in Congress). Only in the âabsence of an applicable Act of Congressâ may âthe federal courts ⌠fashion the governing rule of law according to their own standards.â Clearfield Tr. Co. v. United States,318 U.S. 363, 367
(1943). Once Congress has legislated in an area previously governed by federal common law, âthe need for such an unusual exercise of lawmaking by federal courts disappears.â City of Milwaukee v. Illinois (âMilwaukee IIâ),451 U.S. 304, 314
(1981).
Because there is no federal common law of interstate air
pollution after the Clean Air Act, the Districtâs CPPA suit
could not have been pleaded as a federal common law action.
2.
The Companies attempt to overcome this straightforward
conclusion. Although they recognize the Clean Air Act has
displaced the federal common law of interstate air pollution,
they maintain that this fact is irrelevant to the jurisdictional
question of whether removal is proper. They contend that state-
law suits about interstate emissions are barred by federal
12
common law as a jurisdictional matter, and therefore that the
Districtâs complaint must be understood as bringing a federal
common law action. The jurisdictional question, they insist, is
distinct from the merits determination of whether there is a
remedy under federal common law.
The Companiesâ argument is foreclosed by the doctrinal
underpinnings of federal common law and by numerous
Supreme Court decisions. We can find no support for the
suggestion that federal common law has the SchrĂśdinger
quality advanced by the Companiesâwhere one does not know
if it is alive or dead until the case is removed to federal court.
The Court has repeatedly emphasized that when Congress
âspeak[s] directly to a question,â that legislation displaces
federal common law. 2 Mobil Oil Corp. v. Higginbotham, 436
U.S. 618, 625(1978); see alsoid.
(âThere is a basic difference between filling a gap left by Congressâ silence and rewriting rules that Congress has affirmatively and specifical[ly] enacted.â). Legislative displacement of federal common law applies for both jurisdictional and merits purposes. 3 2 See also Am. Elec. Power Co., 564 U.S. at 423â24 (â[I]t is primarily the office of Congress, not the federal courts, to prescribe national policy in areas of special federal interest.â); TVA v. Hill,437 U.S. 153, 194
(1978) (âOnce Congress, exercising its delegated powers, has decided the order of priorities in a given area, it is for the Executive to administer the laws and for the courts to enforce them when enforcement is sought. ⌠Once the meaning of an enactment is discerned and its constitutionality determined, the judicial process comes to an end.â). 3 The cases cited by the Companies do not support their argument that federal common law may persist for jurisdictional purposes even when displaced with respect to the merits. In Oneida Indian Nation of New York v. County of Oneida, the cause of action was âclaimed to arise under federal law in the first instance.â414 U.S. 661
, 676
13
In the Clean Air Act, Congress displaced federal common
law through comprehensive regulation, but it did not
completely preempt state law, 4 nor did it provide an
independent basis for removal, as it has done in many other
statutes. See, e.g., 28 U.S.C. §§ 1442, 1452, 1453 (allowing
removal of suits against federal officers, claims related to
bankruptcy, and class-action suits). It would be inconsistent
with Congressâs directives and the Supreme Courtâs decision
in American Electric for this court to conclude that federal
common law persists solely for the purpose of removing the
Districtâs CPPA claims to federal court.
When Congress legislates to displace federal common law,
the statute governs the extent to which state law is preempted.
Milwaukee II, 451 U.S. at 312â13 (explaining â[t]he enactment
of a federal rule in an area of national concern, and the decision
whether to displace state law in doing so, is generally made not
by the federal judiciary, purposefully insulated from
democratic pressures, but by the people through their elected
(1974). The Court did not make a separate jurisdictional
determination of the kind advanced by the Companies because there
was no question of preemption. Possession of tribal lands is
exclusively the purview of federal law. Id.at 677â78. Similarly, in United States v. Standard Oil Co., the Court addressed cases where âCongress has not acted affirmatively about the specific question.â332 U.S. 301, 307
(1947). Unlike this case, there was no question of whether federal common law persisted after Congress had legislated. 4 Every court of appeals to consider the issue has concluded that the Clean Air Act does not completely preempt state-law causes of action. See Minnesota, 63 F.4th at 710 (âBecause Congress has not acted, the presence of federal common law here does not express Congressional intent of any kindâmuch less intent to completely displace any particular state-law claim.â); City of Hoboken,45 F.4th at 707
; County of San Mateo v. Chevron Corp.,32 F.4th 733, 748
(9th Cir. 2022); Bd. of Cnty. Commârs of Boulder,25 F.4th at 1265
.
14
representatives in Congressâ) (emphasis added). For example,
the Supreme Court concluded that the Clean Water Act
displaced the federal common law of interstate water pollution.
See id. at 317. The Court later considered whether state
common law pollution actions were preempted. In doing so, the
Court assessed the question of preemption entirely as a matter
of statutory interpretation, stating that the relevant question
was âwhether the [Clean Water] Act pre-empts [state] common
law to the extent that [common] law may impose liability.â
Intâl Paper Co. v. Ouellette, 479 U.S. 481, 491(1987). The Court repeatedly emphasized Congressâs directives in the statute, rather than the preemptive effect of (any residual) federal common law. Seeid.
at 491â500. And while the Court held the particular state-law claim at issue was preempted under the Clean Water Act, it held that other state-law claims were not.Id. at 497
.
Ouellette is directly analogous to the question before us,
and the Supreme Court has explicitly signaled that courts
should apply the Ouellette reasoning to state-law claims
involving interstate air pollution. In American Electric, after
holding the Clean Air Act displaces the federal common law of
interstate air pollution, the Court stated that âthe availability vel
non of a state lawsuit depends, inter alia, on the preemptive
effect of the federal Act.â 564 U.S. at 429 (citing Ouellette, 479
U.S. at 489, 491, 497). Whether the Districtâs suit may go
forward thus depends on the preemptive effect of the Clean Air
Act, not on the preemptive effect of federal common law.
The Companiesâ argumentâthat the Districtâs state-law
claims implicating interstate air pollution arise under federal
common law even following the Clean Air Actâsimply cannot
be squared with American Electric or Ouellette. 5 Under the
5
The cases the Companies cite for this argument are unavailing. For
instance, the Ninth Circuit in Native Village of Kivalina v.
15
Companiesâ view, all state-law claims dealing with interstate
pollution would remain barred by federal common law. Yet
Ouellette explicitly concluded that some state-law claims could
proceed despite the Clean Water Act, confirming that the
federal common law of interstate pollution was no longer a
jurisdictional bar to state-law pollution claims. Ouellette, 479
U.S. at 497; cf. Jonathan H. Adler, Displacement and Preemption of Climate Nuisance Claims, 17. J.L. ECON & POLâY 217, 255 (2022) (âUnder Ouellette, the displacement of federal common law does not mean that claims of an interstate or cross-boundary character are to be dismissed as beyond the ExxonMobil Corp. held that a cause of action grounded in federal common law was displaced by the Clean Air Actâprecisely the proposition that is fatal to the Companiesâ argument. See696 F.3d 849
, 856â58 (9th Cir. 2012). And in City of New York v. Chevron Corp., which held that a nuisance action brought by the City of New York could not go forward in light of federal common law and the Clean Air Act, the Second Circuit expressly did not decide âwhether the defendantsâ anticipated defenses could singlehandedly create federal-question jurisdiction under28 U.S.C. § 1331
in light of the well-pleaded complaint rule.â993 F.3d 81
, 94â98 (2d Cir. 2021).
Moreover, the courts of appeals have overwhelmingly rejected
the Companiesâ argument that even after the Clean Air Act the
federal common law of interstate pollution overrides all state-law
claims. See Rhode Island, 35 F.4th at 55 (âThe ⌠Clean Air Act âŚ
ha[s] statutorily displaced any federal common law that previously
existed. So we cannot rule that any federal common law controls
Rhode Islandâs claims.â) (cleaned up); Mayor of Baltimore, 31 F.4th
at 206(âDefendants believe that removal is proper based on federal common law even when the federal common law claim has been deemed displaced, extinguished, and rendered null by the Supreme Court. We believe that position defies logic.â); Bd. of Cnty. Commârs of Boulder,25 F.4th at 1260
(â[T]his case could not have been
removed to federal court on the basis of federal common law that no
longer exists.â) (cleaned up).
16
province of the courts. Rather, displacement means that federal
common law is unavailable, either to resolve or preempt the âŚ
plaintiffsâ claims.â). And in American Electric, the Court
similarly stated that the availability of a state-law suit turned
on the preemptive effect of the Clean Air Act, not federal
common law.
The Companies do not argue the Clean Air Act completely
preempts the Districtâs suit. Whether that statute bars the
Districtâs claim as a matter of ordinary preemption is a merits
defense to be resolved in the first instance by the Districtâs
courts. See Metro. Life Ins., 481 U.S. at 63 (âFederal pre-
emption is ordinarily a federal defense to the plaintiffâs suit. As
a defense, it does not appear on the face of a well-pleaded
complaint, and, therefore, does not authorize removal to federal
court.â).
***
The District brought claims exclusively under District of
Columbia law, which presumptively must be heard in the
Districtâs courts. The artful pleading doctrine does not support
removal. The Companies do not identify any statute that
completely preempts the Districtâs CPPA claims, and the
Companies cannot rely on federal common law governing air
pollution because, at the very least, it has been displaced by the
Clean Air Act. While the Companies may invoke Clean Air Act
preemption as a merits defense, this does not support removal
of the Districtâs CPPA claims to federal court.
B.
The Companies also argue that the federal question statute
provides jurisdiction under the Grable doctrine, which is a
limited exception to the well-pleaded complaint rule. The
doctrine applies when âa federal issue is: (1) necessarily raised,
17
(2) actually disputed, (3) substantial, and (4) capable of
resolution in federal court without disrupting the federal-state
balance approved by Congress.â Gunn v. Minton, 568 U.S. 251,
258 (2013). All factors must be met for a federal court to have
jurisdiction.
Grable is inapplicable because no federal issue is
ânecessarily raisedâ by the Districtâs suit. A federal question is
necessarily raised only if it is âan essential part of [the
plaintiffâs] affirmative claimâ rather than a âresponse to an
anticipated defense.â D.C. Assân of Chartered Pub. Schs. v.
District of Columbia, 930 F.3d 487, 491(D.C. Cir. 2019) (cleaned up). This requirement is critical given the âblack-letter law that an anticipated federal defense does not substantiate federal-question jurisdiction.âId.
The District has alleged only
that the Companies âengage[d] in an unfair or deceptive trade
practiceâ under District law. D.C. CODE § 28-3904. The
Districtâs claim is brought under the CPPA without reference
to any federal law at all.
The Districtâs lawsuit does not fit within the Supreme
Courtâs previous decisions applying the Grable doctrine. In
these cases, the state-law claimâas asserted by the plaintiffâ
required resolving a federal issue. In Smith v. Kansas City Title
& Trust Co., a shareholder sued under Missouri corporate law
to enjoin a company from investing funds in certain federally
issued bonds. 255 U.S. 180, 195(1921). The only argument advanced by the plaintiff was that the act of authorizing the bonds violated the federal Constitution.Id.
In Grable, the
plaintiff asserted a state-law quiet title action that turned on
whether the IRS had violated federal statutes in seizing its
property. 545 U.S. at 310â11. And in Gunn v. Minton, where
the Court found the federal issue was necessarily raised but not
substantial, the plaintiff asserted a legal malpractice claim
based on the allegation that he would have prevailed in a
18
federal patent suit absent his attorneyâs misconduct. See 568
U.S. at 255. In each case, the plaintiffâs theory of the state-law
claim explicitly turned on a predicate federal law question.
By contrast, nothing in the Districtâs complaint turns on
federal law. The District does not argue the CPPA violation
rests on the violation of a federal statute, nor does it otherwise
link its District law claim to federal law. Rather, the District
alleges the Companies have inaccurately advertised their fossil
fuel products and misrepresented the effects of those products
on climate change and thereby committed an unfair or
deceptive trade practice in contravention of District law.
The Companies argue the Districtâs claims are properly
resolved by federal law because âthe substance of the
allegations in the complaint require the application of federal
law and thus give rise to federal jurisdiction.â They maintain
the complaint effectively âseeks to establish liabilityâ for
alleged misrepresentations about the environmental effects of
fossil fuels âin contravention of federal law that âaffirmatively
promotes fossil fuel useââ through federal tax benefits,
subsidies, and leases. This appears to be a repackaging of the
Companiesâ artful pleading argument, which we have already
rejected.
Of course, resolving the Districtâs suit may well require
the application of federal law in the sense that it will require
resolving questions of federal preemption. But to reiterate, that
is simply an anticipated federal defense that cannot serve as the
basis for federal question jurisdiction.
C.
The Companies also argue that removal is appropriate
under the federal officer removal statute. See 28 U.S.C.
§ 1442(a)(1). The statute initially allowed defendants to
19
remove if they were âsued in an official or individual capacity
for any act under color of such office.â 28 U.S.C. § 1442(a)(1) (2006) (emphasis added). The Supreme Court interpreted that language to require a âcausal connection between the charged conduct and asserted official authority.â Jefferson County v. Acker,527 U.S. 423, 431
(1999) (cleaned up). But in 2011, Congress broadened the statute to allow removal of suits âfor or relating toâ any act under color of such office. Removal Clarification Act of 2011,Pub. L. No. 112-51, § 2
(b)(1)(A),125 Stat. 545
, 545 (emphasis added). Courts have generally interpreted that amendment to permit removal over âactions, not just causally connected, but alternatively connected or associated, with acts under color of federal office.â Latiolais v. Huntington Ingalls, Inc.,951 F.3d 286, 292
(5th Cir. 2020) (en banc); see also Sawyer v. Foster Wheeler LLC,860 F.3d 249, 258
(4th Cir. 2017) (same).
After the amendment, the statute does not require a causal
connection between acts taken under color of federal office and
the basis for the action. Rather, it is enough that acts taken
under color of federal office are âconnected or associatedâ with
the conduct at issue in the case. Latiolais, 951 F.3d at 296. We
need not resolve the exact bounds of that standard, however,
because under any reasonable interpretation, the Districtâs suit
is not âfor or relating toâ actions taken by the Companies under
color of federal office.
The Companies first point to conduct that occurred long
before the events relevant to this litigation. For instance, the
Companiesâ predecessors purportedly acted under federal
officers by assisting with the production of aviation fuel and
other essential military products during World War II and the
Korean War, and by complying with orders of the Petroleum
Administration for Defense during these periods and during the
1973 oil embargo. But the District does not allege the
20
Companies acted unlawfully until the late 1980s, and none of
the alleged misrepresentations bears any relationship to the sale
or production of military fuels in the mid-20th century. There
is simply no relationship between actions taken by the
Companiesâ predecessors in the 1940s and 1950s and the
allegedly deceptive statements made by the Companies about
climate change since 1980.
Next, the Companies contend the Districtâs suit is related
to commercial relationships between the Companies and the
federal government that persist to this date. The Companies
explain they have extracted gasoline on the Outer Continental
Shelf, an area subject to federal regulation, pursuant to leases
issued by the federal government. Similarly, Exxon and its
predecessor Standard Oil have contracted with the Navy to
coordinate extraction and operations at the Elk Hills Naval
Petroleum Reserve in California. Furthermore, affiliates of
Shell and Exxon have operated and leased Strategic Petroleum
Reserve pipelines and terminals subject to federal regulations.
Whether or not these commercial relationships are
sufficient to establish the Companies were âacting underâ
federal officers, they are not sufficiently ârelated toâ the
Districtâs suit. The District alleges the Companies engaged in
unlawful misrepresentations by making statements to the
general public through advertising campaigns in national
newspapers and magazines expressing uncertainty about the
effect of fossil fuels on anthropogenic climate change. But
none of these alleged misrepresentations references the Outer
Continental Shelf, the Elk Hills Reserve, or the Strategic
Petroleum Reserve. Nor is there any allegation the Companies
engaged in these misrepresentations at the behest of or in
coordination with federal officers. Rather, the complaint
exclusively references statements made by the Companies that
relate broadly to climate change, rather than to any specific
21
activities conducted by the Companies in concert with the
federal government. As the Eighth Circuit recently stated,
â[t]he Energy Companiesâ production of military-grade fuel,
operation of federal oil leases, and participation in strategic
energy infrastructure, even if done at federal direction, bears
little to no relationship with how they conducted their
marketing activities to the general public.â Minnesota v. Am.
Petroleum Inst., 63 F.4th 703, 715 (8th Cir. 2023).
The Companies also insist that the relevant question is not
the Districtâs theory of liability but the harm that gives rise to
the relevant damages. They argue the alleged injuries are
premised on harm caused by climate change, which is in turn
causally linked to the extraction of fossil fuel more generally,
including from federal leases, the Elk Hill Naval Reserve, and
the Strategic Petroleum Reserve. We disagree.
The District emphasized at oral argument that it âw[ould]
not seek damagesâ for the causal connection between the
âoveruseâ of fossil fuels and âglobal climate changeâ or âfor
the physical effects of climate change in the District.â Instead,
the District committed it would seek only those damages
associated with misrepresentations made by the Companies. It
follows that there is no link between the leasing activities
conducted by the Companies and the damages at issue in this
lawsuit. The Companies have failed to demonstrate that the
Districtâs suit fits within the federal officer removal statute.
D.
Finally, the Companies argue removal is appropriate under
the Outer Continental Shelf Lands Act (âOCSLAâ). That
statute provides the federal district courts with original
jurisdiction over âcases and controversies arising out of, or in
connection with ⌠any operation conducted on the outer
Continental Shelf which involves exploration, development, or
22
production of the minerals, of the subsoil and seabed of the
outer Continental Shelf, or which involves rights to such
minerals.â 43 U.S.C. § 1349(b)(1). The Companies argue that
they engage in âoperation[s] conducted on the outer
Continental Shelfâ by operating leases in the area and by
extracting oil and gas from the Shelf. They maintain the
Districtâs claims âaris[e] out ofâ or are âin connectionâ with
such operations because they target the advertising of products
extracted and produced from these operations.
The courts of appeals are not entirely in accord as to the
standard for removal under OCSLA. Although some courts
have required operations on the Shelf be a but-for cause of the
claims at issue, see Tenn. Gas Pipeline v. Hous. Cas. Ins. Co.,
87 F.3d 150, 155(5th Cir. 1996), other courts simply ask whether the suit is âlinked closely to production or development on the Shelf,â see City of Hoboken v. Chevron Corp.,45 F.4th 699, 710
(3d Cir. 2022), or whether the claims pertain to âactions or injuries occurring on the outer Continental Shelf,â County of San Mateo v. Chevron Corp.,32 F.4th 733, 753
(9th Cir. 2022). In practice, however, these different formulations often lead to similar results, as the cases finding OCSLA jurisdiction consistently involve âeither claims with a direct physical connectionâ to the Shelf, such as tort claims arising from accidents on the Shelf, or âcontract or property dispute[s] directly relatedâ to operations on the Shelf.Id. at 754
.
We need not resolve which standard governs removal.
Under any reasonable understanding, the Districtâs claims of
misrepresentations tied to the consumption of fossil fuels do
not âaris[e] out of,â nor are they âin connection with,â
operations âconducted onâ the Outer Continental Shelf. 43
U.S.C. § 1349(b)(1). The District alleges the Companies
violated the CPPA through general statements they made to the
23
public about the risks of climate change and the role their
products play in causing climate change. At most this suit
concerns statements made about products extracted from the
Shelf, which is a far cry from the tort or contract disputes that
have justified removal jurisdiction under OCSLA. Any
connection between the alleged misrepresentations and the
Companiesâ operations on the Shelf is incidental and tenuous
and therefore cannot support removal. 6
***
Under the well-pleaded complaint rule, the cause of action
chosen by the plaintiff usually determines the existence of
federal jurisdiction. This case is no exception. The District
brought suit exclusively under the D.C. Code, and the
Companies have provided no basis for federal jurisdiction. We
affirm the district courtâs order remanding this case to the
Superior Court of the District of Columbia.
So ordered.
6
Every circuit to consider the issue has concluded that removal is not
appropriate under OCSLA for similar state-law claims. See
Connecticut, 83 F.4th at 147(holding the suit did not arise in connection with defendantsâ operations on the Shelf); Minnesota, 63 F.4th at 713 (holding the claims were not an âoperationâ or âconducted onâ the Shelf); Mayor of Baltimore,31 F.4th at 232
(holding the âconnection ⌠is simply too remoteâ); City of Hoboken,45 F.4th at 712
(same); Bd. of Cnty. Commârs of Boulder,25 F.4th at 1274
(holding the claim has âno direct connectionâ to the Shelf); Rhode Island, 35 F.4th at 60 (same).