Yesterday, the United States Supreme Court heard oral arguments in the climate change lawsuit filed by the City of Baltimore in 2018 against energy companies. This case is one of a number of cases brought by states, cities, and other municipalities against energy companies alleging that the companies contributed to climate change. By granting certiorari and hearing oral arguments, the Supreme Court has agreed to review the Fourth Circuit Court of Appeals’ decision remanding the suit to state court after rejecting the energy companies’ contention that they were acting as federal officers pursuant to historical contracts with the federal government. Thus, the principle issue being reviewed centers on an appellate court’s scope of review pursuant to 28 U.S.C. § 1447(d). The Fourth Circuit, agreeing with the City of Baltimore, previously held that Section 1447(d) limits an appellate court’s review of a district court’s remand order to only those grounds which were based on the energy companies acting under the authority of a federal officer. Importantly, the Court, in reviewing the Fourth Circuit’s decision, will likely determine whether an appellate court is limited in its review of remand orders to federal officer removal grounds, or whether the court can properly review any grounds for removal contained in a trial court’s remand order. Additional procedural history pertaining to this case, and information related to other similar, climate-change cases, can be found in our related blog posts titled (1) U.S. Climate Change Litigation: 2020 Update, January 15, 2020; (2) Climate Change Jurisdiction: U.S. Court of Appeals for the Ninth Circuit Kicks Climate Change Case Back to State Court, June 2, 2020; and (3) U.S. Supreme Court To Review Scope of Appellate Review for Federal Officer Removal in Climate Change Litigation, October 2, 2020.
In support of the energy companies’ argument, the Court recognized, at least to some extent, that the plain language of Section 1447(d) supports a finding that the appellate review of a remand order is not limited to strictly federal officer jurisdiction or jurisdiction based on claims of civil rights violations. Justice Gorsuch indicated that the City of Baltimore’s reading of Section 1447(d) requires a bifurcated interpretation of the word “order”: the first use of the word “order” in the provision to mean the entire order, but the use of the same word in the second clause to mean a portion of the order. Principles of statutory interpretation generally provide that a word or phrase is presumed to bear the same meaning throughout a text. This, of course, assumes a level of perfection in drafting that is not often achieved. Meanwhile, Justice Kavanaugh identified the most significant obstacles for the City of Baltimore to overcome, which are the plain text of the statute and a 1996 U.S. Supreme Court decision, Yamaha Motor Corp. USA v. Calhoun, 516 U.S. 199 (1996). In Yamaha, the Court held that courts of appeals could exercise jurisdiction over any question that is included within an interlocutory order, regardless of whether the district court identified that portion of the order as a controlling question of law.
The Court also expressed two primary concerns with the energy companies’ argument for expansion of appellate review. First, if the Court were to agree with the Appellants and find that the entire remand order was reviewable on appeal under Section 1447(d), then the Court’s ruling could provide an incentive to include frivolous grounds of federal officer removal in future litigation as a vehicle to access appellate review of an entire remand order. Justices Thomas and Breyer seemed especially concerned about this possibility. Justice Thomas described it as giving rise to the potential for “smuggling in” appellate review of multiple grounds for removal. Additionally, Justice Kagan asked counsel for the Federal Government (arguing in support of the energy companies’ position) whether an appellate court can review a remand order if the removing party abandons its federal officer removal in favor of focusing on its other grounds for removal. Counsel for Appellants argued there is no indication in the Seventh Circuit that civil defendants are including frivolous grounds of federal officer jurisdiction in removal notices. Recall that the Seventh Circuit has already held that the entire remand order is reviewable if it contains federal officer removal grounds. Counsel for the Appellants also pointed out that federal officer removal requires a very limited set of circumstances, and not every civil defendant will be able to allege these circumstances in a notice of removal.
Second, the Court questioned counsel for the oil companies and the Federal Government about the ratification doctrine. This cannon of statutory interpretation provides that if the legislature amends or reenacts a provision with a significant change in language, it is presumed to entail a change in meaning. Members of the Court applied the inverse of this principle to the jurisdictional question at issue in this case. According to some of the Justices, there was a majority rule by the Circuit Courts regarding the scope of appellate review under Section 1447(d) prior to Congress’s amendment of the statute in 2011 in favor of limiting the review to only civil rights grounds. In 2011, Congress amended Section 1447(d) to include federal officer removal grounds as a second exception to the general prohibition on appealing remand orders. Congress, however, did not make any other substantive changes to the statute. The Court asked counsel for the energy companies and the Federal Government whether Congress ratified the majority rule of the Circuit Courts in 2011 by not making other substantive changes. In response, the Appellants argued that the law was not settled in 2011, and therefore, Congress could not have ratified that position.
As more than 20 climate change cases remain pending in various stages in both state and federal courts, the Court’s decision in this case will undoubtedly have major implications for all of the pending cases. To date, the energy companies have been unsuccessful in their removal efforts, but they are hoping that by expanding appellate review to include all federal grounds for removal, they will have a better chance at sustaining federal court jurisdiction.
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