Climate Lawfare Takes A Hit: States And Cities Can’t Sidestep Federal Courts

State and local governments have been trying to extract tens of billions of dollars from fossil-fuel producers for contributing to climate change.

But a 7-1 majority of the Supreme Court on Monday decided an important procedural question in BP v. Mayor and City Council of Baltimore that could put a lid on these suits.

Baltimore has sued some two dozen fossil-fuel companies for creating a “public nuisance.” It argues that the production, sale, and promotion of carbon energy has increased greenhouse gas emissions, thereby contributing to climate change that will cause “property damage, economic injuries, and impacts to public health.”

To describe its argument as a legal stretch is an understatement.

A similar effort by states to shake down fossil-fuel power generators already failed in federal court (AEP v. Connecticut) in 2011.

The Supreme Court ruled that corporations can’t be sued for their greenhouse emissions under federal common law since the Clean Air Act delegates the regulation of CO2 emissions to the Environmental Protection Agency.

Baltimore and other cities are now trying to sneak lawsuits through state courts where judges aren’t bound by AEP.

The Supreme Court on Monday made this end-run much harder by ruling on a complicated procedural question regarding federal appellate court review of federal judges’ remand orders to state courts.

BP and other fossil fuel companies have tried to move the state lawsuits to federal courts under federal laws, including one that promises a federal forum for any action against an “officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office.”

Fossil-fuel companies argued the Baltimore case belonged in federal court in part because they had federal drilling contracts. A federal judge disagreed and remanded the case to Maryland court.

Defendants usually can’t appeal federal remand orders, but Congress has created two exceptions: cases involving civil rights and federal officers.

BP tried to kick the suit back into federal court by appealing to the Fourth Circuit Court of Appeals under the federal officers exception.

The Fourth Circuit said the Baltimore case didn’t fall into this narrow exception and declined to consider BP’s other arguments for federal jurisdiction.

Now the Supreme Court has ruled that the Fourth Circuit interpreted its authority under the law to review remand orders too narrowly.

“The statute allows courts of appeals to examine the whole of a district court’s ‘order,’ not just some of its parts or pieces” and “without any further qualification,” Justice Neil Gorsuch writes for the majority.

His textual analysis calls to mind Justice Antonin Scalia, and it’s notable that Justices Elena Kagan and Stephen Breyer (who joined the AEP decision) agreed.

Justice Samuel Alito was recused from the case, and Justice Sonia Sotomayor dissented on grounds that the Court’s decision lets defendants “sidestep” restrictions on federal court review.

Au contraire. States and cities have purposefully tried to sidestep federal courts and Supreme Court precedent. Now they will have a harder time drilling for money in state courts.

Read rest at Wall Street Journal