CITY OF OAKLAND, а Municipal Corporation, and The People of the State of California, acting by and through the Oakland City Attorney; CITY AND COUNTY OF SAN FRANCISCO, a Municipal Corporation, and The People of the State of California, acting by and through the San Francisco City Attorney Dennis J. Herrera, Plaintiffs-Appellants, v. BP PLC, a public limited company of England and Wales; CHEVRON CORPORATION, a Delaware corporation; CONOCOPHILLIPS, a Delaware corporation; EXXON MOBIL CORPORATION, a New Jersey corporation; ROYAL DUTCH SHELL PLC, a public limited company of England and Wales; DOES, 1 through 10, Defendants-Appellees.
No. 18-16663
D.C. Nos. 3:17-cv-06011-WHA, 3:17-cv-06012-WHA
United States Court of Appeals for the Ninth Circuit
May 26, 2020
OPINION
Argued and Submitted February 5, 2020 Pasadena, California
Filed May 26, 2020
Before: Sandra S. Ikuta, Morgan Christen, and Kenneth K. Lee, Circuit Judges.
Opinion by Judge Ikuta
SUMMARY*
Removal/Subject-Matter Jurisdiction
The panel vacated the district court‘s judgment and order denying defendants’ motion to remand cases to the state court from which thеy had been removed on the ground that plaintiffs’ claim arose under federal law, and remanded for the district court to consider whether there was an alternative basis for subject-matter jurisdiction.
The City of Oakland and the City and County of San Francisco filed complaints in California state court asserting a California public-nuisance claim against five energy companies arising from the role of fossil fuel products in global warming. The complaints sought an order of abatement requiring the energy companies to fund a climate change adaptation program for the cities. The energy companies removed the complaints to federal court, identifying seven grounds for subject-matter jurisdiction, including that the cities’ public-nuisance claim was governed by federal common law. The district court dеnied the cities’ motion to remand the cases to state court, holding that it had federal-question jurisdiction under
Considering the pleadings filed at the time of removal, the panel held that the state-law public-nuisance claim did not arise under federal law for purposes of
The panel further held that the cities cured any subject-matter jurisdiction defect by amending their comрlaints to assert a claim under federal common law. Thus, at the time the district court dismissed the cities’ complaints, there was subject-matter jurisdiction. Nonetheless, the panel held that it could not affirm the district court‘s dismissals if there was not subject-matter jurisdiction at the time of removal. The panel concluded that the cities did not waive their argument in favor of remand by amending their complaints. The panel also rejected the energy companies’ argument that any impropriety with respect to removal could be excused by considerations of finality, efficiency, and economy. The panel agreed with the Fifth Circuit that a dismissal for failure to state a claim, unlike a grant of summary judgment or judgment after trial, is generally insufficient to forestall an otherwise proper remand.
The panel remanded thе cases to the district court to determine if there was an alternative basis for jurisdiction.
COUNSEL
Michael Rubin (argued), Barbara J. Chisholm, Rebecca Moryl Lee, and Corinne F. Johnson, Altshuler Berzon LLP, San Francisco, California; Victor M. Sher and Matthew K. Edling, Sher Edling LLP, San Francisco, California; Barbara J. Parker, City Attorney; Maria Bee, Special Counsel; Erin Bernstein, Supervising Attorney; Malia McPherson, Deputy; Office of the City Attorney, Oakland, California; Dennis J. Herrera, City Attorney; Ronald P. Flynn, Chief Deputy; Yvonne R. Meré, Chief, Complex Litigation; Matthew D. Goldberg and Robb W. Kapla, Deputies; City Attorney‘s Office, San Francisco, California; for Plaintiffs-Appellants.
Theodore J. Boutrous, Jr. (argued), Andrea E. Neuman, and William E. Thomson, Gibson Dunn & Crutcher LLP, Los Angeles, California; Joshua S. Lipshutz, Gibson Dunn & Crutcher LLP, San Francisco, California; Neal S. Manne, Johnny W. Carter, Erica Harris, and Steven Shepard, Susman Godfrey LLP, Houston, Texas; Herbert J. Stern and Joel M. Silverstein, Stern & Kilcullen LLC, Florham Park, New Jersey; for Defendant-Appellee Chevron Corporation.
Kannon K. Shanmugam (argued), Paul Weiss Rifkind Wharton & Garrison LLP, Washington, D.C.; Theodore V. Wells Jr., Daniel J. Toal, and Jaren Janghorbani, Paul Weiss Rifkind Wharton & Garrison LLP, New York, New York; Jonathan W. Hughes, Arnold & Porter Kaye Scholer LLP, San Francisco, California; Matthew T. Heartney and John D. Lombardo, Arnold & Porter Kaye Scholer LLP, Los Angeles, California; Jameson R. Jones and Sean C. Grimsley, Bartlit Beck Herman Palenchar & Scott LLP, Denver, Colorado; Tracie J. Renfroe and Carol M. Wood, King & Spalding LLP, Houston, Texas; M. Randall Oppenheimer and Dawn Sestito, O‘Melveny & Myers LLP, Los Angeles, California; Daniel B. Levin, Munger Tolles & Olson LLP, Los Angeles, California; Jerome C. Roth and Elizabeth A. Kim, Munger Tolles & Olson LLP, San Francisco, California; David C. Frederick and Brendan J. Crimmins, Kellogg Hansen Todd Figel & Frеderick P.L.L.C., Washington, D.C.; for Defendants-Appellees BP PLC, ConocoPhillips, Exxon Mobil Corporation, and Royal Dutch Shell PLC.
Michael Burger, Morningside Heights Legal Services, Inc., New York, New York, for Amici Curiae National League of Cities, U.S. Conference of Mayors, and International Municipal Lawyers Association.
Michael R. Lozeau and Richard T. Drury, Lozeau Drury LLP, Oakland, California, for Amici Curiae Conflict of Laws and Foreign Relations Law Scholars.
Gerson H. Smoger, Smoger & Associates P.C., Dallas, Texas; Robert S. Peck, Center for Constitutional Litigation P.C., Washington, D.C.; for Amici Curiae Senators Sheldon Whitehouse, Dianne Feinstein, Richard Blumenthal, Mazie K. Hirono, Edward J. Markey, and Kamala D. Harris.
Seth Davis, Berkeley, California; Ruthanne M. Deutsch and Hyland Hunt, Deutsch Hunt PLLC, Washington, D.C.; for Amici Curiae Legal Scholars.
John W. Keker, Matthew Werdegar, and Dan Jackson, Keker Van Nest & Peters LLP, San Francisco, California; Harold Hongju Koh and Conor Dwyer Reynolds, Rule of Law Clinic, Yale Law School, New Haven, Connecticut; for Amici Curiae Former U.S. Government Officials.
James R. Williams, County Counsel; Greta S. Hansen, Chief Assistant County Counsel; Laura S. Trice, Lead Deputy County Counsel; Tony LoPresti, Deputy County Counsel; Office of County Counsel, County of Santa Clara, San José, California; for Amicus Curiae California State Association of Counties.
Daniel P. Mensher and Alison S. Gaffney, Keller Rohrback L.L.P., Seattle, Washington, for Amici Curiae Robert Brulle, Center for Climate Integrity, Justin Farrell, Benjamin Franta, Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran, and Union of Concerned Scientists.
Kenneth L. Adams, Adams Holcomb LLP, Washington, D.C.; William A. Rossbach, Rossbach Law PC, Missoula, Montana; for Amici Curiae Mario J. Molina, Michael Oppenheimer, Bob Kopp, Friederike Otto, Susanne C. Moser, Donald J. Wuebbles, Gary Griggs, Peter C. Frumhoff, and Kristina Dahl.
Ian Fein, Natural Resources Defense Council, San Francisco, California; Peter Huffman, Natural Resources Defense Council, Washington, D.C.; for Amicus Curiae Natural Resources Defense Council.
Xavier Becerra, Attorney General; Sally Magnani, Senior Assistant Attorney General; David A. Zonana, Supervising Deputy Attorney General; Erin Ganahl and Heather Leslie, Deputy Attorneys General; Attorney General‘s Office, Sacramento, California; William Tong, Brian E. Frosh, Keith Ellison, Gurbir S. Grewal, Letitia James, Ellen F. Rosenblum; Peter F. Neronha, Thomas J. Donovan Jr., Robert W. Ferguson, and Karl A. Racine, Attorneys General; for Amici Curiаe States of California, Connecticut, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington, and the District of Columbia.
Steven P. Lehotsky, Michael B. Schon, and Jonathan D. Urick, U.S. Chamber Litigation Center, Washington, D.C.; Peter D. Keisler, C. Frederick Beckner III, Ryan C. Morris, and Tobias S. Loss-Eaton, Sidley Austin LLP, Washington, D.C.; for Amicus Curiae Chamber of Commerce of the United States of America.
Philip S. Goldberg and Christopher E. Appel, Shook Hardy & Bacon LLP, Washington, D.C.; Linda E. Kelly and Peter C. Tolsdorf, Manufacturers’ Center for Legal Action, Washington, D.C.; for Amicus Curiae National Association of Manufacturers.
Curtis T. Hill, Jr., Attorney General; Thomas M. Fisher, Solicitor General; Kian J. Hudson, Deputy Solicitor General; Julia C. Payne and Robert Rowlett, Deputy Attorneys General; Office of the Attorney General, Indianapolis, Indiana; Steve Marshall, Kevin G. Clarkson, Leslie Rutledge, Christopher M. Carr, Derek Schmidt, Jeff Landry, Eric Schmitt, Tim Fox, Doug Peterson, Wayne Stenehjem, Dave Yost, Mike Hunter, Alan Wilson, Ken Paxton, Sean Reyes, Patrick Morrissey, and Bridget Hill, Attorneys General; for Amici Curiae States of Indiana, Alabama, Alaska, Arkansas, Georgia, Kansas, Louisiana, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, Texas, Utah, West Virginia, and Wyoming.
Raymond A. Cardozo and David J. de Jesus, Reed Smith LLP, San Francisco, California; Richard A. Epstein, Chicago, Illinois; for Amici Curiae Professors Richard A. Epstein, Jason Scott Johnston, and Henry N. Butler.
OPINION
IKUTA, Circuit Judge:
Two California cities brought actions in state court alleging that the defendants’ production and promotion of fossil fuels is a public nuisance under California law, and the defendants removed the complaints to federal court. We hold that the state-law claim for public nuisance does not arise under federal law for purposes of
I
In September 2017, the city attorneys for the City of Oakland and the City and County of San Francisco filed complaints in California state court asserting a California public-nuisance claim against five of the world‘s largest energy companies: BP p.l.c., Chevron Corporation, ConocoPhillips, Exxon Mobil Corporation, and Royal Dutch Shell plc.1 The complaints claim that the defendants are liable for causing or contributing to a public nuisance under California law. See
Aсcording to the complaints, the Energy Companies’ “production and promotion of massive quantities of fossil fuels” caused or contributed to “global warming-induced sea level rise,” leading to coastal flooding of low-lying shorelines, increased shoreline erosion, salt-water impacts on the Cities’ wastewater treatment systems, and interference with stormwater infrastructure,
In October 2017, the Energy Companies removed the Cities’ complaints to federal court. The Energy Companies identified seven different grounds for subject-matter jurisdiction in their notices of removal, including that the Cities’ public-nuisance claim was governed by federal common law because the claim implicates “uniquely federal interests.”2 After removal, the cases were assigned to the same district judge, Judge William H. Alsup.3
The Cities moved to remand the cases to state court on the ground that the district court lacked subject-matter jurisdiction. The district court denied the motion, concluding that it had federal-question jurisdiction under
In response to the district court‘s ruling, the Cities amended their complaints to include a public-nuisance claim
under federal common law.4 The amended complaints stated that the federal claim was added “to conform to the [district court‘s] ruling” and that the Cities “reserve[d] all rights with respect to whether jurisdiction [is] proper in federal court.” The Energy Companies moved to dismiss the amended complaints.
In June 2018, the district court held that the amended complaints failed “to state a claim upon which relief can be granted.”
The Cities appeal the denial of their motions to remand, the dismissal of their complaints for failure to state a claim, and the district court‘s personal-jurisdiction ruling. We have jurisdiction under
II
We first consider the Cities’ argument that the district court erred in determining that it had federal-question jurisdiction under
A
Federal-question jurisdiction stems from a congressional enactment,
There are a few exceptions to the well-pleaded-complaint rule, however.
1
First, in a line of cases, beginning with Northern Pacific Railway Co. v. Soderberg, 188 U.S. 526 (1903), and extending most recently to Grable & Sons Metal Products,
Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005), the Supreme Court has recognized a “special and small category” of state-law claims that arise under federal law for purposes of
required remedies “contemplated by a federal statute,” Empire Healthchoice, 547 U.S. at 690, or required the interpretation and application of a federal statute in a hypothetical case underlying a legal malpractice claim, see Gunn v. Minton, 568 U.S. 251, 259 (2013).
The Court has articulated a test for deciding when this exception to the well-pleaded-complaint rule applies. As explained in Grable and later in Gunn, federal jurisdiction over a state-law claim will lie if a federal issue is “(1) necessarily raised, (2) actually disputed, (3) substantiаl, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” Gunn, 568 U.S. at 258 (citing Grable, 545 U.S. at 314). All four requirements must be met for federal jurisdiction to be proper. Id.
it is a “pure issue of law,” Empire Healthchoice, 547 U.S. at 700 (citation omitted), that directly draws into question “the constitutional validity of an act of Congress,” Smith, 255 U.S. at 201, or challenges the actions of a federal agency, see Grable, 545 U.S. at 310, and a ruling on the issue is “both dispositive of the case and would be controlling in numerous other cases,” Empire Healthchoice, 547 U.S. at 700 (citing Grable, 545 U.S. at 313). By contrast, a federal issue is not substantial if it is “fact-bound and situation-specific,” see id. at 701, or raises only a hypothetical question unlikely to affect interpretations of federal law in the future, see Gunn, 568 U.S. at 261. A federal issue is not substantial merely because of its novelty, see id. at 262, or because it will further a uniform interpretation of a federal statute, see Merrell Dow Pharm., 478 U.S. at 815–16.
2
A second exception to the well-pleaded-complaint rule is referred to as the “artful-pleading doctrine.” This doctrine “allows removal whеre federal law completely preempts a plaintiff‘s state-law claim,” Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998), meaning that “the pre-emptive force of the statute is so ‘extraordinary’ that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule,‘” Caterpillar, 482 U.S. at 393 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)). To have this effect, a federal statute must “provide[] the exclusive cause of action for the claim asserted and also set forth procedures and remedies governing that cause of action.” Beneficial Nat‘l Bank v. Anderson, 539 U.S. 1, 8 (2003).
The Supreme Court has identified only three statutes that meet this criteria: (1)
B
We now consider whether the district court erred in concluding it had jurisdiction over the Cities’ complaints under
1
We first consider whether the Cities’ state-law claim for public nuisance falls within the “special and small category” of state-law claims that arise under federal law. Empire Healthchoice, 547 U.S. at 699. The gist of the Cities’ claim is that the Energy Companies’ production and promotion of fossil fuels has resulted in rising sea levels, causing harm to the Cities. Under the Court‘s test, we must determine whether, by virtue of this claim, a federal issue is “(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” Gunn, 568 U.S. at 258 (citing Grable, 545 U.S. at 314).
Even assuming that the Cities’ allegations could give rise to a cognizable claim for public nuisance under federal common law, cf. Am. Elec. Power Co. v. Connecticut (“AEP“), 564 U.S. 410, 423 (2011), the district court did not have jurisdiction under
564 U.S. at 423, and we have held that federal public-nuisance claims aimed at imposing liability on energy producers for “acting in concert to create, contribute to, and maintain global warming” and “conspiring to mislead the public about the science of global warming,” Native Vill. of Kivalina v. ExxonMobil Corp., 696 F.3d 849, 854 (9th Cir. 2012), are displaced by the Clean Air Act, id. at 858.
Rather than identify a legal issue, the Energy Companies suggest that the Cities’ state-law claim implicates a variety
case required “a fact-specific application of rules that come from both federal and state law rather than a context-free inquiry into the meaning of a federal law“).
Given that the Cities’ state-law claim does not raise a substantial federal issue, the claim does not fit within the “slim category Grable exemplifies,” Empire Healthchoice, 547 U.S. at 701, аnd we need not consider the remaining requirements articulated in Grable.
2
The Energy Companies also argue that the Cities’ state-law claim for public nuisance arises under federal law because it is completely preempted by the Clean Air Act. This argument also fails.
The Clean Air Act is not one of the three statutes that the Supreme Court has determined has extraordinary preemptive force. See Ansley v. Ameriquest Mortg. Co., 340 F.3d 858, 862 (9th Cir. 2003). Rather, the Supreme Court has left open the question whether the Clean Air Act preempts a state-law nuisance claim under ordinary preemption principles. AEP, 564 U.S. at 429 (“In light of our holding that the Clean Air Act displaces federal common law, the availability vel non of a state [nuisance] lawsuit depends, inter alia, on the preemptive effect of the federal Act.“). Nor does the Clean Air Act meet either of the two requirements for complete preemption. See, e.g., Hansen, 902 F.3d at 1057.
First, the statutory language does not indicate that Congress intended to preempt “every state law cause of action within the scope” of the Clean Air Act. In re NOS Commc‘ns, MDL No. 1357, 495 F.3d 1052, 1058 (9th Cir. 2007); see also Beneficial Nat‘l Bank, 539 U.S. at 11 (holding that federal law provides the exclusive cause of action for usury claims against national banks such that there is “no such thing as a state-law claim of usury against a national bank“). Rather, the statute indicates that Congress intended to preserve state-law causes of action pursuant to a saving clause,
Second, the Clean Air Act does not provide the Cities with a “substitute[]” cause of action, Hansen, 902 F.3d at 1057, that is, a cause of action that would allow the Cities to “remedy the wrong [they] assert[] [they] suffered,” Hunter,
746 F.2d at 643. While the Clean Air Act allows a plaintiff to file a petition to seek judicial review of certain actions taken by the Environmental Protection Agency,
***
In sum, because neither exception to the well-pleaded complaint rule applies to the Cities’ original complaints, the district court erred in holding that it had jurisdiction under
III
Although the district court lacked jurisdiction under
First, the Energy Companies argue that the Cities waived the argument that the district court erred in refusing to remand the cases to state court because the Cities amended their complaints to assert a claim under federal common law. We disagree. The Cities moved for remand and stated, in their amended complaints, that they included a federal claim “to conform to the [district court‘s] ruling” and that they “reserve[d] all rights with respect to whether jurisdiction is proper in federal court.” This was sufficient to preserve the argument that removal was improper. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 73–74 (1996); Singh, 925 F.3d at 1066.
Second, the Energy Companies argue that any impropriety with respect to removal can be excused because “considerations of finality, efficiency, and economy,” Lewis, 519 U.S. at 75, weigh in favor of affirming the district court‘s dismissal of the Cities’ complaints. Again, we disagree.
at 73.9 Because a party violates
There is, however, a narrow exception to this rule that takes into account “considerations of finality, efficiency, and economy.” Singh, 925 F.3d at 1065 (quoting Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 574 (2004)). Specifically, when a jurisdictional defect has been cured after removal and the case has been tried in federal court, a violation of
The decision to excuse a violation of
efficiency, and economy become overwhelming,” Lewis, 519 U.S. at 75, and in those circumstances, the Supreme Court has refused to “wipe out the adjudication postjudgment” so long as the there was jurisdiction when the district court entered judgment, id. at 77; see also Grubbs v. Gen. Elec. Credit Corp., 405 U.S. 699, 702 (1972). For instance, in Lewis, the Court excused a violation of
This reasoning, however, generally will not apply when a district court dismisses a complaint for failure to state a claim under
In light of these differences, we agree with the Fifth Circuit that a dismissal under
In this case, “considerations of finality, efficiency, and economy” are far from “overwhelming.” Lewis, 519 U.S. at 75. When the district court entered judgments, the cases had been on its docket for less than a year—just over eight months. The parties engaged in motion practice under
resources as compared to, for example, three years of litigation, culminating in a six-day jury trial. See id. at 66–67. Because the district court dismissed these cases at the pleading stage, after they were pending for less than a year and before the parties engaged in discovery, we conclude that “considerations of finality, efficiency, and economy” are not “overwhelming.” Id. at 75; see Camsoft Data Sys., 756 F.3d at 338; Waste Control Specialists, 199 F.3d at 786; Dyer, 766 F.2d at 401; Chivas Prods., 864 F.2d at 1286–87. Accordingly, if there was not subject-matter jurisdiction at the time of removal, the cases must proceed in state court.
IV
The district court did not address the alternative bases for removal asserted in the Energy Companies’ notices of removal. And we generally do not consider issues “not passed upon below.” Am. President Lines, Ltd. v. Int‘l Longshore & Warehouse Union, Alaska Longshore Div., Unit 60, 721 F.3d 1147, 1157 (9th Cir. 2013) (quoting Singleton v. Wulff, 428 U.S. 106, 120 (1976)). Accordingly, we remand these cases to the district court to determine whether there was an alternative basis for jurisdiction.12 If there was not,
the cases should be remanded to state court.13 This panel will
VACATED AND REMANDED.14
Notes
[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.