969 F.3d 895
9th Cir.2020Background
- Oakland and San Francisco sued BP, Chevron, ConocoPhillips, ExxonMobil, and Shell in California state court alleging California public-nuisance claims based on defendants’ production and promotion of fossil fuels and seeking abatement relief to fund coastal adaptation.
- Defendants removed to federal court, asserting multiple grounds for federal jurisdiction, principally that the Cities’ nuisance claim was governed by federal common law (federal-question jurisdiction under 28 U.S.C. § 1331).
- The district court denied the Cities’ motion to remand, concluding the state-law nuisance claim was necessarily governed by federal common law; the Cities then amended to add a federal common-law nuisance claim “to conform” to that ruling.
- The district court dismissed the amended complaints under Rule 12(b)(6) for failure to state a federal common-law claim and dismissed four defendants for lack of personal jurisdiction; the Cities appealed the remand denial, dismissal, and personal-jurisdiction ruling.
- The Ninth Circuit held that, based on the pleadings at the time of removal, the state-law public-nuisance claims did not arise under federal law and the Grable exception did not apply; the Clean Air Act did not completely preempt the state claims.
- Because the federal jurisdictional defect existed at removal, and the case was dismissed at the pleading stage (Rule 12(b)(6)) after limited proceedings, the panel vacated the district court’s judgment and remanded for the district court to decide whether any alternative basis for federal jurisdiction (previously asserted in the notices of removal) existed; if not, the case must be remanded to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Cities’ California public-nuisance claims "arise under" federal law for § 1331 purposes (Grable test). | The claims are state-law nuisance claims; federal jurisdiction is improper. | The claims necessarily raise federal issues (interstate/foreign relations, national energy policy) and thus fall into the Grable "slim category." | Denied — the claims did not raise a "substantial" federal question; Grable factors were not satisfied. |
| Whether the Clean Air Act completely preempts the Cities’ state-law nuisance claims (artful-pleading/complete preemption). | No complete preemption; Cities assert preserved state-law remedies. | The Clean Air Act displaces state causes of action and thus converts the claims into federal ones. | Denied — the Clean Air Act does not have the extraordinary preemptive force required for complete preemption and contains a saving clause preserving state remedies. |
| Whether amendment to add a federal common-law claim waived the Cities’ remand argument or cures the jurisdictional defect retroactively. | Amendment was made to conform to the court’s ruling and preserved the remand challenge; plaintiffs did not waive remand. | Amendment cured jurisdiction and plaintiffs waived challenge by invoking federal claim. | Cities did not waive; amendment created federal-question jurisdiction going forward but cannot cure a removal defect that existed at the time of removal for purposes of mandatory remand, absent powerful finality interests. |
| Whether considerations of finality, efficiency, and economy permit affirming dismissal despite defective removal. | Remand is required because the case was not properly removable at time of removal. | The court should excuse the removal defect because the district court reached the merits and dismissed the case. | Denied — those equitable considerations rarely outweigh § 1441(a) when the case was dismissed at the pleading stage without significant discovery or trial; remand is appropriate unless an alternative federal jurisdictional basis exists. |
Key Cases Cited
- Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (U.S. 2005) (established narrow test for when a state-law claim "arises under" federal law: necessarily raised, actually disputed, substantial, and capable of resolution in federal court without disturbing federal-state balance)
- Gunn v. Minton, 568 U.S. 251 (U.S. 2013) (applied and clarified Grable's four-factor test)
- Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (explained the "special and small category" of state-law claims that arise under federal law)
- Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804 (U.S. 1986) (constrained scope of § 1331 and declined to find federal jurisdiction where federal issue was not sufficiently substantial)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (U.S. 1987) (articulated well-pleaded complaint rule: federal-question jurisdiction depends on plaintiff’s well-pleaded complaint, not anticipated defenses)
- Am. Elec. Power Co. v. Connecticut, 564 U.S. 410 (U.S. 2011) (held federal common law of nuisance displaced by Clean Air Act and addressed scope of federal common law for interstate pollution claims)
- Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (U.S. 2003) (defined complete preemption doctrine and identified statutes with extraordinary preemptive force)
- Pegram v. Herdrich, 530 U.S. 211 (U.S. 2000) (recognized that an amended complaint asserting federal claims can establish federal jurisdiction at the time of adjudication)
- Caterpillar Inc. v. Lewis, 519 U.S. 61 (U.S. 1996) (discussed when removal defects may be excused by considerations of finality after full federal adjudication)
- Camsoft Data Sys., Inc. v. S. Elecs. Supply, Inc., 756 F.3d 327 (5th Cir. 2014) (held that a Rule 12(b)(6) dismissal generally does not justify excusing an improper removal)
- Native Vill. of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012) (held federal public-nuisance claims against energy producers are displaced by the Clean Air Act)