Chevron can keep environmental case in fed court, SCOTUS rules

The Blueprint

• Supreme Court ruled 8-0 that Chevron could remove Louisiana coastal lawsuits to federal court, overturning a remand to state court
• Case centers on federal officer removal statute under 28 U.S.C. §1442(a)(1)
• Court found Chevron’s WWII oil production tied to federal wartime duties
• Decision overturns 5th U.S. Circuit Court of Appeals and district court rulings

Chevron USA Inc. can invoke the federal officer removal statute to defeat an effort to remand to state court 42 environmental suits brought by a Louisiana parish alleging the oil and gas company violated a state law prohibiting oil production in coastal areas without a permit, the U.S. Supreme Court has ruled in an 8-0 decision.

Under 28 U.S.C. §1442(a)(1), federal officers or persons “acting under” them “for or relating to any act under color of such office” may remove actions against them to federal court.

The case before the U.S. Supreme Court addressed a suit originally filed in state court in 2013 by Plaquemines Parish. The plaintiff alleged the Chevron violated the State & Local Coastal Resources Management Act enacted by Louisiana in 1978. Among a number of restrictions, the law prohibits oil production without a permit in the state’s coastal zone.

On the other hand, the statute exempts uses legally commenced before 1980.

An expert report filed by Plaquemines Parish in the course of the litigation revealed that the lawsuit would include a challenge to Chevron’s crude-oil production during the Second World War. According to the plaintiff’s expert, Chevron caused unnecessary environmental harm by using earthen storage pits instead of steel tanks, employing  vertical-drilling methods and transporting crude oil using canals rather than building sufficient road networks to access their oil fields.

Chevron removed the case to federal court under 28 U.S.C. §1442(a)(1), asserting the suit “related to” its contractual duties to refine crude oil into aviation gas for the military during the war.

A U.S. District Court judge granted the parish’s motion to remand to state court, concluding the federal officer removal statute did not apply. A panel of the 5th U.S. Circuit Court of Appeals affirmed.

The U.S. Supreme Court reversed, concluding Chevron satisfied the “relating to” requirement of the federal officer removal statute by plausibly alleging a close relationship between its challenged crude-oil production and the performance of its federal aviation refining duties.

Click here to read the full text of the Supreme Court’s April 17 decision in Chevron USA, Inc. v. Plaquemines Parish.

• “Chevron’s case fits comfortably within the ordinary meaning of a suit ‘relating to’ the performance of federal duties. Chevron has plausibly alleged a close relationship between its challenged conduct and the performance of its federal duties—not a tenuous, remote, or peripheral one. This suit implicates Chevron’s wartime efforts to produce and supply avgas’ essential feedstock, so it is closely connected to Chevron’s wartime avgas refining for the military. Much of the crude oil that Chevron produced in the Delta Duck Club field was ultimately used for its own avgas refining. And, as the Fifth Circuit assumed and no party disputes, this suit will challenge Chevron’s actions that allowed it to increase its production of crude oil in the Delta Duck Club field during wartime. The parish’s report alleged that Chevron’s use of the coastal zone had been illegally commenced because of its reliance on vertical-drilling methods, canals, and earthen pits. But, using vertical-drilling methods ‘maximize[d] production’ of crude oil. Using canals instead of building roads saved ‘time, materials, and manpower,’ resulting in more ‘timely oil production.’ And, using earthen pits complied with the [the federal Petroleum Administration for War’s] directive to preserve steel. If Chevron had refrained from these actions and produced less crude oil as a result, its avgas refining for the military may have suffered.
  “Moreover, the Government emphasized the importance of increasing Chevron’s crude-oil production to support avgas refining as part of the war effort. The P.A.W. identified Delta Duck Club as a ‘Critical Fiel[d] Essential to the War Program’ because it produced a ‘preferential’ kind of crude oil for refining avgas. Under Chevron’s refining contract, the Government paid more for avgas when the price of obtaining crude oil increased. Meanwhile, the P.A.W. required the development of plans ‘to increase to a maximum the production of all grades of aviation gasoline … in the shortest possible time,’ including by addressing the need for components such as crude oil. And, the P. A. W.’s regulations required the vertical-drilling methods challenged by the parish as part of its effort to ‘provide adequate supplies of petroleum for military and other essential purposes.’ In this all-hands-on-deck, wartime context, Chevron needed to produce more crude oil as quickly as possible to facilitate more avgas refining, including its own.”
  — Justice Clarence Thomas, joined by Chief Justice John G. Roberts Jr., and Justices Sonia Sotomayor, Elena Kagan, Neil M. Gorsuch, Brett M. Kavanaugh and Amy Coney Barrett, opinion of the court (Justice Samuel A. Alito Jr. took no part in the decision)

• “The Court correctly holds that the underlying lawsuit is ‘for or relating to’ Chevron’s acts done ‘under color of [federal] office.’ But I disagree with the majority’s conclusion that the federal officer removal statute’s ‘for or relating to’ language requires only an indirect relationship between the conduct targeted by the lawsuit and the asserted federal duties. In my view, the statute demands more.
  “Understood in the context of its statutory and legislative history, §1442(a)(1) requires a causal nexus between the targeted conduct and the federal duties …. Chevron satisfies the causal-nexus requirement on the facts presented here, so I agree that the Fifth Circuit’s ruling must be vacated. I therefore respectfully concur only in the majority’s judgment.”
  —Justice Ketanji Brown Jackson, concurring in judgment