Supreme Court Sides With Energy Companies On Technical Grounds In Climate Liability Case

Lori Kalani, Bernard Nash
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  • The U.S. Supreme Court issued a 7-1 opinion in BP PLC v. Mayor and City Council of Baltimore, Case No. 19-1189, ruling that the Fourth Circuit erred in failing to consider all jurisdictional arguments from defendants BP and other energy companies when determining whether the case was rightly remanded from federal court back to state court.
  • The underlying case was originally brought by the City of Baltimore in Maryland state court under the tort theory of public nuisance with the aim of forcing fossil-fuel companies to pay for the local impacts of climate change. It was removed by the defendant energy companies to federal court, which then remanded the case back to state court. On appeal of the remand, the Fourth Circuit only considered one of the purported eight grounds for removal.
  • The Supreme Court declined, however, to hold that all climate liability cases should automatically be heard in federal court, as defendants had argued. The Court may rule on this issue if it takes up a pending petition filed by energy companies in Chevron vs. City of Oakland, where petitioners ask the Court to provide clarity on the issue of state versus federal jurisdiction in climate liability cases.
  • While not dispositive on the merits, the decision marks a milestone in clarifying the proper forum—federal or state courts—that should hear cases brought by governments that are increasingly asserting claims again private defendants traditionally brought by State AGs, such as those involving climate change, opioids, and data breaches.
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