In June 2020, Minnesota Attorney General Keith Ellison sued ExxonMobil, three Koch entities, and the American Petroleum Institute — (energy companies and affiliates that produce or sell fossil fuels around the world and an industry association) — on behalf of the State of Minnesota, alleging that the defendants knowingly engaged in a “decades-long campaign of deception about the fossil fuel industry’s actual contributions to, and true costs of, climate change.”  The lawsuit includes claims for fraud, failure to warn, and multiple separate violations of state laws that prohibit consumer fraud, deceptive trade practices, and false statements in advertising.

The defendants sought to have the case removed to the U.S. District Court for the District of Minnesota, with their principal argument being that the State of Minnesota’s claims seeking redress for injuries allegedly caused by interstate emissions necessarily arise under federal common law. The State of Minnesota moved in turn to remand the case to state court, arguing that the federal court lacked subject matter jurisdiction. The District Court of Minnesota “reluctantly” agreed with the State of Minnesota and applied the well-pleaded complaint rule. Specifically, the court determined that federal-question jurisdiction was not present because there was not a “federal question presented on the face of [Plaintiffs’] properly pleaded complaint” and that neither of the two limited exceptions to the well-pleaded complaint rule —namely, complete preemption and the substantial federal-question doctrine applied.  The Eighth Circuit affirmed.  

The petroleum-related entities sought review from the U.S. Supreme Court on the issue as to “whether a district court has removal jurisdiction over putative state law claims seeking redress for injuries allegedly caused by the effect of interstate greenhouse-gas emissions on the global climate.” The U.S. Supreme Court denied the petition for certiorari on January 8.  American Petroleum Institute v. Minnesota Docket No.: 23-168.

Now, three and a half years after the State of Minnesota first filed suit, the case will be able to proceed in the state court where it was originally filed.

Why the Denial Matters and What is Likely to Happen Next  

As noted in his dissent in the Circuit Court, Judge Stras found that plaintiffs’ complaint was an “obvious” example of “artful pleading,” because the State of Minnesota “purport(ed) to bring state-law consumer protection claims against a group of energy companies,” but was, in fact, “seek(ing) a global remedy for (the) global issue” of climate change.”  Noting further that, “(t)he problem, of course, is that (Minnesota’s) attempt to set national energy policy through its own consumer-protection laws would effectively override the policy choices made by the federal government and other states.” Judge Stras opined that, “for a uniquely federal interest like interstate pollution,” perhaps removal “should” be allowed.

The U.S. Supreme Court has previously denied petitions for certiorari in three similar cases [from the Ninth Circuit: City of Oakland v. BP p.l.c., 969 F.3d 895 (2020),cert. denied, 141 S. Ct. 2776 (2021), Tenth Circuit: In Board of County Commissioners of Boulder County v. Suncor Energy (U.S.A.) Inc., 25 F.4th 1238 (2022), cert. denied, 143 S. Ct. 1795 (2023) and Third Circuit: City of Hoboken v. Chevron Corp., 45 F.4th 699 (2022), cert. denied, 143 S. Ct. 2483 (2023). However, with dozens of state and local governments having filed similar claims in state courts across the country at the time of this posting, the likelihood for the U.S. Supreme Court’s review of these jurisdictional issues will become more likely in future terms, especially if a circuit split develops and one of the circuits allows for removal in any of these cases. Until then, we will continue to monitor these cases as they are litigated under various state’s consumer laws throughout the United States.

A copy of the underlying complaint can be found here.

The Petition for Writ of Certiorari can be found here.

Respondents’ Brief in Opposition to the Petition for Writ of Certiorari can be found here.