More U.S. climate-change lawsuits against Big Oil head back to state court

Two lawsuits targeting major oil companies over climate-change mitigation costs belong in state courts, a federal appeals court panel said Wednesday, further thwarting efforts by major oil companies to transfer the cases to the federal system.

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The decision by the 3rd U.S. Circuit Court of Appeals marks the latest loss for the oil industry, which has argued in similar suits across the country the federal court system is the appropriate place to address whether the companies should pitch in on the bill for infrastructure projects to help fortify cities and states against the impacts of climate change.

The 2020 lawsuits brought by the state of Delaware and the city of Hoboken, New Jersey were filed in state court, which is generally considered a more plaintiff-friendly venue.

“Climate change is an important problem with national and global implications,” Judge Stephanos Bibas wrote for the three-judge panel. “But federal courts cannot hear cases just because they are important.”

The lawsuits claim 19 oil companies and the American Petroleum Institute, the country's biggest oil and gas lobby group, knowingly contributed to the damaging effects of climate change and misled the public about the risks.

A spokesperson for Chevron Corp, one of the oil companies targeted in the suits, said in a statement about Wednesday's ruling that the company believes the cases belong in federal court due to their "sweeping implications for national energy policy, national security, foreign policy and other uniquely federal interests."

BP America Inc declined to comment. Spokespeople for other oil companies sued including Exxon Mobil Corp and Shell PLC didn’t immediately respond to requests for comment Wednesday.

The 3rd Circuit’s decision is in line with four other appellate courts that have already rejected arguments made by the oil companies that the cases are governed by or preempted by federal law. The oil companies in June appealed a 10th Circuit ruling, asking the U.S. Supreme Court to weigh in on the issue.

Mat Marshall, a spokesman for the Delaware Attorney General's Office, said of Wednesday's ruling: "We agree with the 3rd Circuit panel’s clear and unanimous opinion."

“Defendants’ delay tactics have failed,” Hoboken's attorney Matthew Brinckerhoff said. “Hoboken will now prove its claims in state court.”

The cases are City of Hoboken v. Chevron Corp and State of Delaware v. BP America Inc, 3rd U.S. Circuit Court of Appeals, No. 21-2728 and No. 22-1096.

For Hoboken: Jonathan Abady and Matthew Brinckerhoff of Emery Celli Brinckerhoff Abady Ward & Maazel

For Delaware: Stephanie Biehl, Matt Edling and Vic Sher of Sher Edling

For Shell: David Frederick of Kellogg Hansen Todd Figel & Frederick

For BP: Nancy Milburn and Diana Reiter of Arnold & Porter Kaye Scholer

For Exxon: Kannon Shanmugam, Daniel Toal and Ted Wells of Paul, Weiss, Rifkind, Wharton & Garrison

For Chevron: Joshua Dick, Andrea Neuman and William Thomson of Gibson Dunn & Crutcher

By Reuters / August 18, 2022 4:12 AM