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Climate Change

Third Circuit Rejects Oil Company Efforts to Remove Climate Claims to Federal Court

Five Circuits have considered, and rejected, fossil fuel efforts to get state-law tort and nuisance claims removed to federal court. Will their luck change in the Supreme Court?


Today the U.S. Court of Appeals for the Third Circuit decided Hoboken v. Chevron, rejecting the oil company defendants' efforts to remove state-law-based climate change claims to federal court. The opinion by Judge Stephanos Bibas is short and to the point, and makes quick work of the oil company efforts to derail climate change-based tort claims filed in state court.

Judge Bibas' opinion begins:

Our federal system trusts state courts to hear most cases—even big, important ones that raise federal defenses. Plaintiffs choose which claims to file, in which court, and under which law. Defendants may prefer federal court, but they may not remove their cases to federal court unless federal laws let them. Here, they do not.

Oil companies ask us to hear two sweeping climate-change suits. But the plaintiffs filed those suits in state court based only on state tort law. And there is no federal hook that lets defendants remove them to federal court. So we will affirm the District Courts' orders sending them back.

In his opinion, Judge Bibas swiftly and soundly dispatches the oil companies' three arguments for removal: 1) that tort claims based upon climate change actually arise under federal law either because they are "inherently federal" or because they necessarily raise substantial federal issues justifying removal; 2) that the claims relate to oil production on the Outer Continental Shelf, and 3) that the oil companies were acting under federal officers.

There is a logic to the argument that issues like climate change should be handled at the federal level, as opposed to in state-law-based litigation in state courts. I am sympathetic to that argument. Yet that is a choice to be made by Congress, not the courts. As Judge Bibas concludes:

Climate change is an important problem with national and global implications. But federal courts cannot hear cases just because they are important. The Constitution restricts us to resolving claims that are about federal law or that Congress has expressly authorized us to hear. These claims check neither box. So we cannot hear them.

In reaching this conclusion, the Third Circuit joined the First, Fourth, Ninth and Tenth Circuits in rejecting the oil company removal claims. (Another case is pending in the U.S. Court of Appeals for the Eighth Circuit.)

The one case in which the oil companies have fared better was in the U.S. Court of Appeals for the Second Circuit, but in that case the question was not removal but straight preemption. New York filed its claim in federal court int eh first instance, and the oil companies sought to have the suit dismissed on preemption grounds. The Second Circuit accepted these arguments (quite wrongly, in my view), but they concerned a slightly different question. I critique the Second Circuit opinion and explain why state-law-based climate claims are neither displaced or preempted by federal law in this article just published as part of a symposium on nuisance litigation in the Journal of Law, Economics, and Policy.

Despite their poor record in the circuit courts, the oil company defendants are seeking Supreme Court review. Over the summer, they petitioned for certiorari in Suncor Energy (U.S.A.) v. Board of County Commissioners of Boulder County (the case from the Tenth Circuit). In the petition for certiorari, which is supported by multiple business groups, the oil companies attempt to argue that there is a circuit split between the Second Circuit and the various circuits to have rejected removal. This argument seems like a stretch to me. Five circuits have considered the arguments for removal, and all five have rejected the claims (in opinions joined by judges from across the political spectrum). This would thus seem to be a poor candidate for Supreme Court review. We will see this fall whether the justices agree.