*2 Before GREGORY, Chief Judge, THACKER, Circuit Judge, and FLOYD, Senior Circuit Judge.
Affirmed by published opinion. Senior Judge Floyd wrote the opinion in which Chief Judge Gregory and Judge Thacker joined.
ARGUED: Kannon K. Shanmugam, PAUL, WEISS, RIFKIND, WHARTON, GARRISON, LLP, Washington, D.C., for Appellants. Victor Marc Sher, SHER EDLING LLP, San Francisco, California, for Appellees. ON BRIEF: Theodore J. Boutrous, Jr., Los Angeles, California, Anne Champion, New York, New York, Joshua S. Lipshutz, Thomas G. Hungar, GIBSON, DUNN & CRUTCHER LLP, Washington, D.C.; Ty Kelly, Jonathan Biran, BAKER DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C., Baltimore, Maryland, for Appellants Chevron Corporation and Chevron U.S.A., Inc. John B. Isbister, Jaime W. Luse, TYDINGS & ROSENBERG LLP, Baltimore, Maryland; Philip H. Curtis, Nancy G. Milburn, New York, New York, Matthew T. Heartney, John D. Lombardo, ARNOLD & PORTER KAYE SCHOLER LLP, Los Angeles, California, for Appellants BP Products North America Inc., BP P.L.C., and BP America Inc. Craig A. Thompson, VENABLE LLP, Baltimore, Maryland; Theodore V. Wells, Jr., Daniel J. Toal, Jaren Janghorbani, PAUL, WEISS, RIFKIN, WHARTON, GARRISON LLP, New York, New York, for Exxon Mobil Corporation and ExxonMobil Oil Corporation. David C. Frederick, James M. Webster, III, Brendan J. Crimmins, Grace W. Knofczynski, Daniel S. Severson, KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C., Washington, D.C.; Daniel B. Levin, Los Angeles, California, Jerome C. Roth, Elizabeth A. Kim, MUNGER, TOLLES & OLSON LLP, San Francisco, California, for Appellants Shell USA, Inc. and Shell plc. Warren N. Weaver, Peter Sheehan, WHITEFORD TAYLOR AND PRESTON LLP, Baltimore, Maryland; Nathan P. Eimer, Pamela R. Hanebutt, Ryan Walsh, Raphael Janove, EIMER STAHL LLP, Chicago, Illinois, for Appellant Citgo Petroleum Corporation. Michael A. Brown, NELSON MULLINS RILEY & SCARBOROUGH LLP, Baltimore, Maryland; David B. Hamilton, Hillary V. Colonna, Sarah E. Meyer, WOMBLE BOND DICKINSON LLP, Baltimore, Maryland; Sean C. Grimsley, Jameson R. Jones, Daniel R. Brody, BARTLIT BECK LLP, Denver, Colorado, for Appellants ConocoPhillips and ConocoPhillips Company. Steven M. Bauer, Margaret A. Tough, LATHAM & WATKINS LLP, San Francisco, California, for Appellants ConocoPhillips, ConocoPhillips Company, and Phillips 66. Jonathan Chunwei Su, LATHAM & WATKINS LLP, Washington, D.C., for Appellant Phillips 66. Shannon S. Broome, San Francisco, California, Shawn Patrick Regan, New York, New York, Ann Marie Mortimer, HUNTON ANDREWS KURTH LLP, Los Angeles, California, for Appellants Marathon Petroleum Corp. and Speedway, LLC. Scott Janoe, Houston, Texas, Martha Thomsen, Megan Berge, Emily Wilson, BAKER BOTTS L.L.P., Washington, D.C., for Appellant Hess Corp. Michelle N. Lipkowitz, Thomas K. Prevas, SAUL EWING ARNSTEIN & LEHR LLP, Baltimore, Maryland, for Appellants Crown Central LLC and Crown Central New Holdings LLC. Kathleen Taylor Sooy, Tracy Ann Roman, Washington, D.C., Honor R. Costello, CROWELL & MORING LLP, New York, New York, for Appellants CNX Resources Corporation, Consol Energy Inc., and Consol Marine Terminals LLC. Noel J. Francisco, David M. Morrell, J. Benjamin Aguiñaga, Washington, D.C., David C. Kiernan, JONES DAY, San Francisco, California, for Appellant CNX Resources Corporation. Mark S. Saudek, GALLAGHER EVELIUS & JONES LLP, Baltimore, Maryland; James Stengel, New York, New York, Robert Reznick, ORRICK, HERRINGTON & SUTCLIFFE, LLP, Washington, D.C., for Appellants Marathon Oil Corporation and Marathon Oil Company. Andre M. Davis, Suzanne Sangree, Sara Gross, BALTIMORE CITY LAW DEPARTMENT, Baltimore, Maryland; Matthew K. Edling, SHER EDLING LLP, San Francisco, California, for Appellee. Steven P. Lehotsky, Michael B. Schon, Andrew R. Varcoe, Stephanie A. Maloney, U.S. CHAMBER LITIGATION CENTER, Washington, D.C.; Peter D. Keisler, C. Frederick Beckner III, Ryan C. Morris, Tobias S. Loss-Eaton, SIDLEY AUSTIN LLP, Washington, D.C.; William M. Jay, Andrew Kim, GOODWIN PROCTER LLP, Washington, D.C., for Amicus The Chamber of Commerce of the United States of America. Michael Burger, Susan Kraham, MORNINGSIDE HEIGHTS LEGAL SERVICES, INC., New York, New York, for Amici The National League of Cities, the U.S. Conference of Mayors, and the International Municipal Lawyers Association. Scott L. Nelson, Allison M. Zieve, PUBLIC CITIZEN LITIGATION GROUP, Washington, D.C., for Amicus Public Citizen, Inc. Gerson H. Smoger, SMOGER & ASSOCIATES, P.C., Dallas, Texas; Robert S. Peck, CENTER FOR CONSTITUTIONAL LITIGATION, P.C., Washington, D.C., for Amici Senators Sheldon Whitehouse and Edward J. Markey. Brian E. Frosh, Attorney General, Joshua M. Segal, Special Assistant Attorney General, Steven J. Goldstein, Special Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Amicus State of Maryland. Rob Bonta, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF CALIFORNIA, Sacramento, California, for Amicus State of California. Kathleen Jennings, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF DELAWARE, Wilmington, Delaware, for Amicus State of Delaware. William Tong, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF CONNECTICUT, Hartford, Connecticut, for Amicus State of Connecticut. Karl A. Racine, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF THE DISTRICT OF COLUMBIA, Washington, D.C., for Amicus District of Columbia. Clare E. Connors, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF HAWAII, Honolulu, Hawaii, for Amicus State of Hawaii. Maura Healey, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MASSACHUSETTS, Boston, Massachusetts, for Amicus Commonwealth of Massachusetts. Andrew J. Bruck, Acting Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEW JERSEY, Trenton, New Jersey, for Amicus State of New Jersey. Ellen F. Rosenblum, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF OREGON, Salem, Oregon, for Amicus State of Oregon. Thomas J. Donovan, Jr., Attorney General, OFFICE OF THE ATTORNEY GENERAL OF VERMONT, Montpelier, Vermont, for Amicus State of Vermont. Letitia James, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEW YORK, Albany, New York, for Amicus State of New York. Aaron M. Frey, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MAINE, Augusta, Maine, for Amicus State of Maine. Keith Ellison, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MINNESOTA, Saint Paul, Minnesota, for Amicus State of Minnesota. Hector Balderas, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEW MEXICO, Santa Fe, New Mexico, for Amicus State of New Mexico. Peter F. Neronha, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF RHODE ISLAND, Providence, Rhode Island, for Amicus State of Rhode Island. Robert W. Ferguson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WASHINGTON, Olympia, Washington, for Amicus State of Washington. William A. Rossbach, ROSSBACH LAW, PC, Missoula, Montana, for Amici Mario J. Molina, Michael Oppenheimer, Bob Kopp, Friederike Otto, Susanne C. Moser, Donald J. Wuebbles, Gary Griggs, Peter C. Frumhoff, and Kristina Dahl. Peter Huffman, NATURAL RESOURCES DEFENSE COUNCIL, Washington, D.C., for Amicus Natural Resources Defense Council. Mark A. Griffin, Amy Williams- Derry, Daniel P. Mensher, Alison S. Gaffney, KELLER ROHRBACK L.L.P., Seattle, Washington, for Amici Robert Brulle, Center for Climate Integrity, The Chesapeake Climate Action Network, Justin Farrell, Benjamin Franta, Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran, and the Union of Concerned Scientists. Theodore E. Roitka, Attorney General, Thomas M. Fisher, Solicitor General, Kian J. Hudson, Deputy Solicitor General, Julia C. Payne, Deputy Attorney General, OFFICE OF THE ATTORNEY GENERAL OF INDIANA, Indianapolis, Indiana, for Amicus State of Indiana. Steve Marshall, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ALABAMA, Montgomery, Alabama, for Amicus State of Alabama. Treg R. Taylor, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ALASKA, Anchorage, Alaska, for Amicus State of Alaska. Leslie Rutledge, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ARKANSAS, Little Rock, Arkansas, for Amicus State of Arkansas. Christopher Carr, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF GEORGIA, Atlanta, Georgia, for Amicus State of Georgia. Derek Schmidt, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF KANSAS, Topeka, Kansas, for Amicus State of Kansas. Daniel Cameron, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF KENTUCKY, Frankfort, Kentucky, for Amicus Commonwealth of Kentucky. Lynn Fitch, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MISSISSIPPI, Jackson, Mississippi, for Amicus State of Mississippi. Austin Knudsen, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MONTANA, Helena, Montana, for Amicus State of Montana. Doug Peterson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEBRASKA, Lincoln, Nebraska, for Amicus State of Nebraska. Alan Wilson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF SOUTH CAROLINA, Columbia, South Carolina, for Amicus State of South Carolina. Ken Paxton, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF TEXAS, Austin, Texas, for Amicus State of Texas. Sean D. Reyes, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF UTAH, Salt Lake City, Utah, for Amicus State of Utah. Bridget Hill, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WYOMING, Cheyenne, Wyoming, for Amicus State of Wyoming. Linda E. Kelly, Patrick Hedren, Erica Klenicki, MANUFACTURERS’ CENTER FOR LEGAL ACTION, Washington, D.C., for Amicus National Association of Manufacturers. Philip S. Goldberg, Christopher E. Appel, SHOOK HARDY & BACON L.L.P., Washington, D.C., for Amici National Association of Manufacturers, National Association of Convenience Stores, Society of Independent Gasoline Marketers of America, and Energy Marketers of America. Matthew D. Hardin, HARDIN LAW OFFICE, Washington, D.C., for Amicus Energy Policy Advocates. Anna C. Haac, Hassan A. Zavareei, TYCKO & ZAVAREEI LLP, Washington, D.C., for Amici Scholars of Foreign Relations and Federal Courts.
FLOYD, Senior Circuit Judge:
This appeal returns to us on remand from the Supreme Court, and we are now
tasked with examining the entirety of the district court’s remand order to determine if the
climate-change lawsuit in question was properly removed to federal court.
BP P.L.C. v.
Mayor & City Council of Balt.
,
I.
A. In July 2018, Baltimore filed suit in the Circuit Court for Baltimore City against Defendants. According to Baltimore, Defendants substantially contributed to greenhouse- gas pollution, global warming, and climate change by extracting, producing, promoting, refining, marketing, distributing, and selling fossil-fuel products (i.e., coal, oil, and natural gas). Baltimore asserts that Defendants deceived consumers and the public about the dangers associated with their fossil-fuel products when they knew, for nearly fifty years, of a direct link between their products and climate-change threats. With that knowledge, as Baltimore alleges, Defendants (1) employed a “coordinated, multi-front effort to conceal and deny their own knowledge of those threats”; (2) discredited “publicly available scientific evidence”; and (3) created persistent doubt within the public sphere about the “reality and consequences of the impacts of their fossil[-]fuel pollution.” J.A. 43. But that is not all. Baltimore’s Complaint emphasizes that Defendants’ other actions also contributed to climate change and Baltimore’s own harms: “Defendants individually and collectively manufactured, promoted, marketed, and sold a substantial percentage of all fossil[-]fuel products ultimately used and combusted.” J.A. 139 (emphasis added).
Resulting from Defendants’ collective conduct, Baltimore avers it has suffered “climate[-]change-related injuries,” including “sea level rise and associated impacts, increased frequency and severity of extreme precipitation events, increased frequency and severity of drought, increased frequency and severity of heat waves and extreme temperatures, and consequent social and economic injuries associated with those physical and environmental changes . . . .” J.A. 92, 140–41 (emphasis added). Within Baltimore’s boundaries, these environmental events have purportedly caused, among other things, infrastructure damage during floods, automobile accidents and power outages when winter storms hit, and public-health illnesses amid heat waves.
Essentially, Baltimore’s Complaint seeks to shift the burden of its climate-change costs onto Defendants: “[Baltimore] seeks to ensure that the parties who have profited from externalizing the responsibility for sea level rise, extreme precipitation events, heatwaves, other results of the changing hydrologic regime caused by increasing temperatures, and associated consequences of those physical and environmental changes, bear the costs of those impacts on . . . [Baltimore] . . . .” J.A. 47. Baltimore, however, “does not seek to impose liability on Defendants for their direct emissions of greenhouse gases and does not seek to restrain Defendants from engaging in their business operations.” J.A. 47.
Baltimore brings eight causes of action against Defendants, all under Maryland law: (1) public nuisance; (2) private nuisance; (3) strict liability for failure to warn; (4) strict liability for design defect; (5) negligent design defect; (6) negligent failure to warn; (7) trespass; and (8) violations of the Maryland Consumer Protection Act (MCPA), Md. Code Ann., Com. Law §§ 13-101 to -501. Each of Baltimore’s claims are factually premised on Defendants’ “superior knowledge” of the negative, climate-change impacts attributable to their fossil-fuel products. J.A. 150. And that “superior knowledge” stems from Defendants’ control over the “extraction, refining, development, marketing, and sale of [their] fossil[-]fuel products.” J.A. 150 (public nuisance); see also J.A. 156 (alleging, for private nuisance, Defendants possessed “extensive knowledge” of their fossil-fuel products’ hazards); J.A. 157, 166 (maintaining, for strict liability for failure to warn and negligent failure to warn, Defendants breached a duty of care by failing to adequately warn about the “climate effects that inevitably flow from the intended use of their fossil[-]fuel products” when they had “information passed to them from their internal research divisions”); J.A. 160 (asserting, for strict liability for design defect, “Defendants had control over . . . the manufacturing and distribution processes”); J.A. 163 (contending, for negligent design defect, Defendants allowed their fossil-fuel products to enter the stream of commerce “despite knowing them to be defective”); J.A. 168 (asserting, for trespass, flood waters entered Baltimore’s real property because of Defendants’ fossil-fuel products and their knowledge of those products); J.A. 171 (alleging Defendants violated the MCPA by making (1) false and misleading statements, and (2) false representations and misleading omissions about their fossil-fuel products).
To remedy its harms, Baltimore seeks compensatory and punitive damages, disgorgement of profits, civil penalties under the MCPA, and equitable relief, including the abatement of the alleged nuisances and an injunction against future nuisances.
B. After Baltimore’s suit was filed in state court in July 2018, Defendants Chevron Corp. and Chevron U.S.A. timely removed Baltimore’s Complaint to the United States District Court for the District of Maryland. Chevron asserted eight different grounds for removal under statutory grants of federal jurisdiction and various legal theories, including: (1) federal common law; (2) substantial issues of federal law, as well as foreign affairs, under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing , 545 U.S. 308 (2005); (3) complete preemption under the Clean Air Act (CAA), 42 U.S.C. §§ 7401–7671q; (4) federal enclaves; (5) the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1349(b)(1); (6) the bankruptcy removal statute, 28 U.S.C. § 1452(a); (7) the admiralty jurisdiction statute, 28 U.S.C. § 1333(1); and (8) the federal officer removal statute, 28 U.S.C. § 1442(a)(1).
Responding to Chevron’s removal, Baltimore filed a motion to remand its
Complaint back to state court. After considering the parties’ filings, on June 10, 2019, the
district court granted Baltimore’s Motion to Remand in a forty-five-page order and opinion,
rejecting each of Defendants’ eight grounds for removal.
Mayor & City Council of Balt.
v. BP P.L.C.
,
Defendants appealed to the Supreme Court. The Supreme Court held that,
under § 1447(d), this Court is not divested of appellate jurisdiction over Defendants’ other
theories of removal and may consider all the bases for removal included within the district
court’s remand order.
BP P.L.C.
,
Following the Court’s holding and mandate, we now evaluate the remaining theories
of removal Defendants proffer. Since Defendants relied upon the federal officer removal
statute as a path to federal court, we possess appellate jurisdiction to review the entirety of
the district court’s remand order under § 1447(d).
BP P.L.C.
,
II.
Under the general removal statute, “any 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.” 28 U.S.C. § 1441(a). In turn,
federal district courts typically have original jurisdiction over cases involving federal
questions “arising under the Constitution, laws, or treaties of the United States.”
Id.
§ 1331. We refer to jurisdiction under § 1331 as federal-question jurisdiction.
See
McCormick v. Am. Online, Inc.
,
“We review de novo issues of subject matter jurisdiction, including removal.”
Common Cause v. Lewis
,
III.
Before considering the merits of Defendants’ grounds for removal, we must look to
two legal doctrines that inform any removal inquiry before a federal court: (1) the well-
pleaded complaint rule, and (2) complete preemption.
See Rivet v. Regions Bank of La.
,
First, “[t]he well-pleaded complaint rule applies to the original jurisdiction of the
district courts as well as to their removal jurisdiction.”
Franchise Tax Bd. of Cal. v. Constr.
Laborers Vacation Tr. for S. Cal.
,
Using this well-known principle in practice, federal courts must first decide whether
federal or state law creates the cause of action by viewing the face of a plaintiff’s complaint.
Pinney
,
Second, the doctrine of complete preemption, unlike ordinary preemption, is a
recognized exception to the well-pleaded complaint rule.
See Aetna Health
, 542 U.S. at
207–08. Complete preemption is an “independent corollary” to the well-pleaded complaint
rule.
Franchise Tax Bd.
,
As we have explained, “[c]omplete preemption applies only when ‘Congress has
clearly manifested an intent to make causes action . . . removable to federal court.’”
Johnson
,
IV. With those legal principles informing our removal inquiry, we now examine, in turn, Defendants’ eight grounds for removal: (1) federal common law; (2) substantial issues of federal law, including foreign affairs, under Grable ; (3) complete preemption under the CAA, 42 U.S.C. §§ 7401–7671q; (4) federal enclaves; (5) the OCSLA, 43 U.S.C. § 1349(b)(1); (6) the bankruptcy removal statute, 28 U.S.C. § 1452(a); (7) the admiralty jurisdiction statute, 28 U.S.C. § 1333(1); and (8) the federal officer removal statute, 28 U.S.C. § 1442(a)(1).
A. As their primary vehicle for federal jurisdiction, Defendants insist that Baltimore’s Complaint is “necessarily and exclusively governed by federal common law.” Defs.’ Suppl. Br. 3; see also Defs.’ Opening Br. 15–22. According to Defendants, even though the Complaint never says anything about federal common law, Baltimore’s claims are “inherently federal and necessarily arise under federal law because they seek to impose liability based on the production and sale of oil and gas abroad.” Defs.’ Suppl. Br. at 8. They specifically characterize Baltimore’s claims as “interstate-pollution claims” that arise under federal common law. Id. at 16; see also id. at 3, 7–8, 19 (likening Baltimore’s causes of action to interstate and/or international pollution). Defendants never point to the specific cause of action under federal common law. Unsurprisingly, Baltimore stresses its suit has “nothing to do with any body of federal common law.” Baltimore’s Suppl. Br. 7. For the reasons set forth below, we resoundingly agree with Baltimore and reject Defendants’ attempts to invoke federal common law.
1. At the outset, we note that Baltimore’s Complaint never expressly asserts any claim
under federal common law. And Defendants do not contest otherwise. Because
Baltimore’s Complaint does not propose a new federal cause of action, never alleges an
existing federal common law claim, and only brings claims originating under Maryland
law, the district court never had subject-matter jurisdiction under the well-pleaded
complaint rule.
See Columbia Gas Transmission v. Singh
,
2. We begin with a well-known principle: “There is no federal general common law.”
Erie R. Co. v. Tompkins
,
Federal courts should be reluctant to displace state law through federal common law
because displacement is typically a legislative decision for Congress.
Atherton
, 519 U.S.
218. Regardless, before a federal court can promulgate a federal rule of decision, a dispute
must satisfy two strict conditions: (1) there must be “uniquely federal interests” at play,
and (2) a party must show “a ‘significant conflict’ . . . between an identifiable ‘federal
policy or interest and the [operation] of state law . . . or the application of state law would
‘frustrate specific objectives’ of federal legislation.”
Boyle v. United Techs. Corp.
, 487
U.S. 500, 504, 507 (1988) (second alteration in original) (citations omitted);
see also
Rodriguez
,
Generally, if these requirements for expanding federal common law are satisfied,
then a federal district court possesses original jurisdiction over a well-pled federal common
law claim under § 1331, making removal jurisdiction proper.
Nat’l Farmers Union Ins.
Cos. v. Crow Tribe of Indians
,
3. At the outset, although Baltimore argued that Defendants failed to show a
“significant conflict” with any federal interest, we note that neither Defendants nor the
district court truly grappled with the federal common law inquiry using the cited precedents
from the Supreme Court.
[4]
Compare
Baltimore’s Resp. Br. 27 n.4,
and
Baltimore’s Suppl.
Br. 7–9,
with BP P.L.C.
,
Defendants identify three “uniquely federal interests” at play: (1) the control of
interstate pollution; (2) energy independence; and (3) multilateral treaties. Defs.’ Opening
Br. 15. Assuming these qualify as “uniquely federal interests,” Defendants’ request for
federal common law still fails because they do not satisfy the necessary “precondition” of
creating federal common law—the recognition of a significant conflict between a federal
interest and state law’s application.
Atherton
,
From what we can discern, Defendants seem to rely upon
City of New York v.
Chevron Corp.
,
First and foremost,
City of New York
was in a completely different procedural
posture.
Id.
at 93–94. As the decision itself concedes, the court was not required to
consider a “heightened standard unique to the removability inquiry” because New York
City initially filed suit in federal court as opposed to state court.
Id.
at 94. Indeed, the
Second Circuit confined itself to Rule 12(b)(6) and never addressed its own subject-matter
jurisdiction.
Id.
at 89. The suit before us was initiated in state court, so we are bound by
the well-pleaded complaint rule or “heightened standard” that did not apply in
City of New
York
.
Id.
at 94. And under the well-pleaded complaint rule, we find Baltimore’s suit
centers on Defendants’ fossil-fuel products and misinformation campaign, not any federal
common law.
See
J.A. 150–71 (setting out allegations about Defendants’ fossil-fuel
products). Second,
City of New York
suffers from the same legal flaw as Defendants’
arguments: It fails to explain a significant conflict between the state-law claims before it
and the federal interests at stake
before
arriving at its conclusions.
See id.
at 90–93. For
instance, after recognizing federalism and the need for a uniform rule of decision as federal
interests,
City of New York
confusingly concludes that federal common law is “most needed
in this area” because New York’s state-law claims touch upon the federal government’s
relations with foreign nations.
[6]
Id.
at 91–92. But it never details what those foreign
relations are and how they conflict with New York’s state-law claims.
See id.
at 92. The
same is true when
City of New York
declares that state law would “upset[] the careful
balance” between global warming’s prevention and energy production, economic growth,
foreign policy, and national security.
Id.
at 93. Besides referencing statutes acknowledging
policy goals, the decision does not mention any obligatory statutes or regulations
explaining the specifics of energy production, economic growth, foreign policy, or national
security, and how New York law conflicts therewith.
See id.
It also does not detail how
those statutory goals conflict with New York law.
See id. City of New York
essentially
evades the careful analysis that the Supreme Court requires during a significant-conflict
analysis.
Cf. Atherton
,
In short, we decline to create a federal rule of decision that would apply to
Baltimore’s claims since Defendants do not point to any significant conflict existing
between Maryland law and their purported federal interests, which is a complete abdication
of their removal burden.
Prince
,
4. Rather than grappling with the threshold inquiry above, Defendants invoke the Supreme Court’s older authorities that once (or possibly) recognized federal common law in the context of interstate pollution and greenhouse-gas emissions. Defendants present a perplexing argument that Baltimore’s claims must be resolved by federal common law because it is the source of the underlying claims. [7] Defs.’ Opening Br. 16–19; Defs.’ Suppl. Br. 17–18. Baltimore responds that any federal common law in this area is nonexistent because the CAA statutorily displaced federal common law claims. Baltimore’s Resp. Br. 24–28. We cannot conclude that any federal common law controls Baltimore’s state-law claims because federal common law in this area ceases to exist due to statutory displacement, Baltimore has not invoked the federal statute displacing federal common law, and, as we later find, the CAA does not completely preempt Baltimore’s claims.
We begin with the precedents available to us. In 1972, the Supreme Court famously
stated that “[w]hen we deal with air and water in their ambient or interstate aspects, there
is a federal common law . . . .”
City of Milwaukee
,
In
American Electric Power Co., Inc. v. Connecticut
,
There are a few things we learn from these cases that the parties rely upon. First,
although the terms have been used interchangeably by federal courts, there is a significant
distinction between the statutory displacement of federal common law and the ordinary
preemption of a state law.
[8]
City of Milwaukee
,
Defendants seek removal through an extraordinary means in their attempt to use
federal common law. Essentially, Defendants believe that removal is proper based on
federal common law even when the federal common law claim has been deemed displaced,
extinguished, and rendered null by the Supreme Court. We believe that position defies
logic. The Court has previously emphasized that “federal courts are without power to
entertain claims otherwise within their jurisdiction if they are so attenuated and
unsubstantial as to be absolutely devoid of merit; wholly insubstantial; obviously frivolous;
plainly unsubstantial; or no longer open to discussion.”
Hagans v. Lavine
,
In sum, we do not accept the governance of federal common law when the CWA
and CAA have statutorily displaced any federal common law that previously existed, and
Baltimore’s Complaint does not desire relief under either of those federal statutes.
See
Pinney
,
5. And finally, Defendants insist that we are bound to follow Caudill v. Blue Cross & Blue Shield of North Carolina , 999 F.2d 74 (4th Cir. 1993), and North Carolina Department of Administration v. Alcoa Power Generating, Inc. , 853 F.3d 140 (4th Cir. 2017). Both of those decisions are readily distinguishable from the circumstances before us.
In
Caudill
, a federal employee brought a breach-of-contract action against her
insurer concerning her coverage under a contract between the insurer and federal
government.
In Alcoa Power , North Carolina sought a declaration against a power company concerning its ownership of a forty-five-mile segment of the Yadkin River. 853 F.3d at 143–45. According to North Carolina, the power company acquired the segment by deed and, on the segment, constructed four hydroelectric dams to power its smelting plant. Id. North Carolina maintained that the power company was only using the riverbed segment of the Yadkin River with its permission and that permission was withdrawn after the company decided to permanently close its smelting plant and layoff its employees. Id. North Carolina originally sought its declaration in state court as a state-law claim to quiet title, but the power company removed the suit to federal court, contending that the issue of navigability for title was a federal question. Id. at 145–46. On appeal, we held that the district court possessed federal-question jurisdiction, warranting removal, because state ownership of the beds of navigable waters relies on the Constitution. Id. at 147–50. When the Supreme Court emphatically declared that “questions of navigability for determining state riverbed title are governed by federal law,” we reasoned that the Court was “reaffirming the federal nature of the issue of navigability for title” and recognizing its precedents from over 150 years. Id. at 148 (quoting PPL Mont., LLC v. Montana , 565 U.S. 576, 591 (2012)). Alcoa Power is inapplicable here. Unlike Alcoa Power , Defendants do not rely on any constitutional provision suggesting federal law applies to or governs Baltimore’s claims. And particularly given American Electric Power ’s holding, Defendants certainly cannot point this Court to over 150 years of precedent recognizing the federal character of Baltimore’s claims. Even more, Baltimore’s Complaint is not concerned with a declaration of title to any navigable water owned or occupied by Defendants. Alcoa Power provides little in the way of principle that governs here.
6. Compared to state common law, federal common law is extremely limited.
Radcliff
Materials
,
B. Defendants next seek to establish federal jurisdiction under Grable and its progeny, arguing “[s]everal aspects of [Baltimore]’s claims” present substantial and disputed federal issues. Defs.’ Opening Br. 33. Here, Defendants argue those federal issues include national security, foreign affairs, energy policy, and environmental regulation. Baltimore, however, posits that Defendants “dramatically overread[]” Grable ’s scope. Baltimore’s Resp. Br. 33. We agree with Baltimore and find Defendants’ invocation of Grable jurisdiction and the foreign-affairs doctrine fails to pass legal muster.
1.
There is a “‘slim category’ of cases . . . in which state law supplies the cause of
action but federal courts have jurisdiction under § 1331 because ‘the plaintiff’s right to
relief necessarily depends on resolution of a substantial question of federal law.’”
Burrell
,
To ensure complaints alleging only state-law claims are not in federal court when
they merely implicate federal issues, the Supreme Court established a four-prong test for
determining the existence of federal-question jurisdiction.
See Grable
,
2. Looking at the face of Baltimore’s Complaint, Grable jurisdiction cannot lie because a federal issue is not “necessarily raised.” Id. at 258. Grable jurisdiction thus fails on the very first prong. [9]
Again, a federal issue is “necessarily raised” only when a federal question is a
“necessary element” of one of the pleaded state-law claims within a plaintiff’s complaint.
Burrell
, 918 F.3d at 381 (quoting
Franchise Tax Bd.
, 463 U.S. at 13). The Court’s
precedents indicate when this requirement is satisfied. For instance, in
Grable
, the
Supreme Court held that a quiet-title action under Michigan law “necessarily raised”
federal issues because the plaintiff premised its state-law claim on the Internal Revenue
Service’s failure to comply with notification requirements established by federal law. 545
U.S. at 310, 314–15. Similarly, the
Gunn
Court held that a legal-malpractice claim under
Texas law “necessarily require[d] application of [federal] patent law to the facts of [the]
case” since the state-law claim required a showing of prevailing in a federal patent
infringement action.
We have adhered to the Court’s guidance by looking for federal ingredients that are
“necessary” for the state-law claim’s success. For example, in
Pinney
, we examined seven
state-law claims, all under the laws of different States, to conclude that federal law
was not
a “necessary element” for any of the state-law claims and they only required the “resolution
of questions of state law.” 402 F.3d at 442–46. Most recently, in
West Virginia State
University Board of Governors v. Dow Chemical Co.
, a historically black college sued a
chemical company for contaminating the groundwater beneath the land it owned. 23 F.4th
288, 292–94 (4th Cir. 2022). The university’s claims were brought exclusively under West
Virginia common law.
Id.
at 296. We held that federal issues were not “necessarily raised”
or even “substantially raised” because the college did not challenge a “cleanup” order under
the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
§ 9613(b), (h), and its state-law claims were not preempted by the Resource Conservation
and Recovery Act’s savings clause,
id.
§ 6972. 23 F.4th at 307–12. These cases
demonstrate that state-law claims must “hinge on the determination of a federal issue” to
fulfill
Grable
’s first prong.
Vlaming v. W. Point Sch. Bd.
,
Defendants never identify what federal question is a “necessary element” for any of Baltimore’s state-law claims. [10] See Defs.’ Opening Br. 33–40. All of Baltimore’s claims are brought under Maryland law, and none of them invoke federal law as a necessary requirement for imposing liability upon Defendants. See J.A. 149–72. Thus, Defendants’ liability does not turn or “hinge” upon interpreting federal law. Cf. Bauer v. Elrich , 8 F.4th 291, 297 (4h Cir. 2021) (holding that plaintiffs “necessarily raised” a federal issue because they sought to enforce a federal statute and did not advance a state-law right). Failing to carry their removal burden, Defendants provide us with no federal question Baltimore has alleged that is “essential to resolving” its claims under Maryland law. Burrell , 918 F.3d at 383 (citation omitted).
Read most generously, Defendants’ Opening Brief maintains that federal agencies typically weigh the costs and benefits of fossil-fuel extraction, so Baltimore’s nuisance claims “invite a state court factfinder [to] adjudicate the reasonableness of . . . federal agencies’ balancing of harms and benefits.” Defs.’ Opening Br. 34–35. But this argument first rests on a misunderstanding of Baltimore’s Complaint. Baltimore essentially challenges the efficacy and safety of Defendants’ fossil-fuel products and sales practices promoting them. See J.A. 150–71. The Complaint is not solely about the initial act of fossil-fuel extraction, nor is it concerned with setting and regulating greenhouse-gas emissions. See J.A. 47.
Defendants’ argument then misapprehends the elements of public and private
nuisance under Maryland law. “A public nuisance is an injury to the public at large or to
all persons who come in contact with it,” while “[a] private nuisance is injury to an
individual or a limited number of individuals only.”
Adams v. Comm’rs of Trappe
, 102
A.2d 830, 834 (Md. 1954). Typically, “[a p]rivate nuisance is ‘a nontrespassory invasion
of another’s interest in the private use and enjoyment of land.’”
Exxon Mobil Corp. v.
Albright
,
Adopting the Second Restatement of Torts, Maryland courts require a public
nuisance to involve an “unreasonable interference” with the public’s rights.
Tadjer v.
Montgomery Cnty.
,
It is true that the Second Restatement of Torts indicates that the “unreasonable-
interference” question may be fulfilled by showing the conduct at issue is proscribed by “
a
statute, ordinance or administrative regulation.”
Id.
(emphasis added). So claimants
may
invoke a federal law or regulation to show that there is an “unreasonable interference” with
the public’s rights. But that is discretionary and not a “necessary element.” Without
resorting to any federal law, Plaintiffs can also utilize a state law or regulation when
showing an “unreasonable interference” with the public’s rights. Maryland courts agree.
See Raynor v. Md. Dep’t of Health & Mental Hygiene
,
A private nuisance also requires a claimant to establish an “unreasonable and
substantial interference” with the use of his or her private property.
Exxon Mobil
, 71 A.3d
at 94. Like public nuisances, that element of a private-nuisance claim may also be proven
by exclusively using state statutes or regulations.
[11]
See Wietzke
,
Defendants also assert that Baltimore’s “promotion claims
implicate
federal duties
to disclose . . . .” Defs.’ Opening Br. 37 (emphasis added). We must reject this argument.
Despite possessing the removal burden, Defendants do not tell us which of Baltimore’s
causes of action under Maryland law is a “promotion claim.”
See id.
But even if we assume
Defendants are referring to Baltimore’s claims involving strict liability for failure to warn,
negligent failure to warn, and the MCPA, they have not identified how any of those claims
require federal law as a “necessary element” for their resolution.
[12]
See id.
And we have
not found any federal law or issue that is raised by the elements of those state-law claims.
See Pinney
,
We cannot find that Baltimore’s Complaint “necessarily raises” any question of
federal law as envisioned by the Supreme Court. It is a far cry from what the Court has
deemed sufficient to satisfy the “necessarily raised” prong.
Cf. Gunn
,
3. Defendants wrongly rely on the foreign-affairs doctrine in the Grable context for federal jurisdiction. [13] Stating that “[t]he question of how to address climate change has long been and remains the subject of international negotiations[,]” Defendants assert that Baltimore wants to “replace . . . international negotiations and congressional and executive decisions with Maryland common law and private litigation in state court.” Defs.’ Opening Br. 38–39. According to Defendants, Maryland law must yield to the federal government’s international policies. We are not persuaded.
Under our
Grable
inquiry, there is nothing in Baltimore’s Complaint indicating that
foreign affairs are “necessarily raised” by its state-law claims.
See City of Oakland
, 969
F.3d at 906–07 (concluding Defendants’ argument about foreign policy did not raise a
substantial question of federal law for
Grable
jurisdiction). While the Complaint contains
historical references to international treaties in a brief section,
see
J.A. 114, 123, there is
no indication that Baltimore’s state-law claims either rise or fall based on any foreign
policies, international treaties, or relationships with foreign nations. “The most one can
say is that a question of [foreign affairs] is lurking in the background . . . .”
Gully v. First
Nat’l Bank
,
In any case, Defendants suggest that the foreign-affairs doctrine preempts
Baltimore’s Complaint. “Under the foreign[-]affairs doctrine, state laws that intrude on
this exclusively federal power are [constitutionally] preempted.”
Movsesian v. Victoria
Versicherung AG
,
Taking up conflict preemption, Defendants do not identify any express foreign
policy from the federal government that conflicts with Baltimore’s state-law claims.
See
Defs.’ Opening Br. 38–39. At best, Defendants reference the Kyoto Protocol, signed in
1997 by President Clinton but never ratified by the United States Senate. Nathan
Richardson,
The Rise and Fall of Clean Air Act Climate Policy
, 10 Mich. J. Env’t & Admin.
L. 69, 75 (2020);
see also Massachusetts v. Env’t Prot. Agency
, 549 U.S 497, 509 (2007).
At worst, they point us to a slew of
remarks
from Presidents Ford, Carter, Reagan, H.W.
Bush, Clinton, W. Bush, Obama, and Trump.
See
Defs.’ Opening Br. 39 (citing J.A. 265–
69). In and of themselves, those remarks are not explicit foreign policies that may create
a conflict.
See Garamendi
, 539 U.S. at 401, 413–24 (considering the preemption of
California’s Holocaust Victim Insurance Relief Act of 1999, Cal. Ins. Code §§ 13800–07,
when the Executive Branch signed agreements with foreign nations). And those statements
do not establish that Maryland common law, or even the common law of States generally,
is an obstacle to the federal government’s dealings with foreign nations.
See Crosby v.
Nat’l Foreign Trade Council
,
As to field preemption, we do not believe that Baltimore’s claims are precluded on
this basis either. Defendants have not articulated how Baltimore’s common law claims
serve as Baltimore’s assertion of its own foreign policy.
See
Defs.’ Opening Br. 38–39.
In
Zschernig
, an Oregon statute permitted escheat
[14]
when “nonresident alien[s] claim[ed]
real or personal property” and three conditions were satisfied.
Despite bearing the removal burden, Defendants have not provided us with even one decision from Maryland courts showing how any of Baltimore’s state-law claims entail foreign relations. Even more importantly for field preemption, Defendants have not at all explained how common law claims under state law meaningfully “disturb foreign relations,” nor have they delineated how Baltimore’s claims are an attempt to “establish its own foreign policy.” Id. at 441. Baltimore’s Complaint does not contain any allegations that develop foreign policies with other countries, and nor does it undermine the federal government in the international arena. At best, it involves an intersection between Maryland law and private, international companies. See Md. Code Ann., Corps. & Ass’ns § 7-105 (“By doing intrastate, interstate, or foreign business in this State, a foreign corporation assents to the laws of this State .” (emphasis added)). Thus, we find no persuasive reason to apply field preemption.
At bottom, we decline to apply the foreign-affairs doctrine as either a constitutional
bar to Baltimore’s Complaint or a valid means for removal under
Grable
jurisdiction. Our
conclusion neatly aligns with our sister circuits’ approach of applying the foreign-affairs
doctrine to disputes only with direct impacts on foreign relations.
Cf. City of Glendale
,
831 F.3d at 1229–31 (holding the foreign-affairs doctrine does not preclude a local
government’s expression, in the form of a monument, about foreign affairs);
Movsesian
,
C. Next is Defendants’ argument that Baltimore’s Complaint is completely preempted by the CAA. This argument fails as well.
As we have already stated, complete preemption requires “the congressional intent
that state law be entirely displaced . . . be clear in the text of the statute.”
Lontz
, 413 F.3d
at 441 (citing
Metro. Life
,
We turn to the history and text of the CAA as required by our complete-preemption
inquiry. The CAA was enacted in 1963, and Congress declared that its express purpose
was to “protect the Nation’s air resources so as to promote the public health and welfare
and the productive capacity of its population . . . .” Clean Air Act, Pub. L. No. 88-206, § 1,
77 Stat. 392, 393 (1963) (codified as amended at 42 U.S.C. § 7401(b)(1)). In 1990,
Congress further recognized that “air pollution prevention (that is, the reduction or
elimination, through any measures, of the amount of pollutants produced or created at the
source) and air pollution control at its source is the
primary responsibility of the States and
local governments
. . . .”
[15]
Clean Air Act Amendments, Pub. L. No. 101-549, § 108, 104
Stat. 2399, 2468 (1990) (emphasis added) (codified at 42 U.S.C. § 7401(a)(3)). The CAA
regulates air pollution from stationary sources, emission standards for moving sources,
noise pollution, acid raid, and stratospheric ozone protection. 42 U.S.C. §§ 7401–7515,
7521–7590, 7641–7642, 7651–7651o, 7671–7671q. It also provides a means for citizen
suits and outlines a permitting process for emission standards.
Id.
§§ 7604, 7661–7661f.
The Supreme Court has suggested that the CAA has force under ordinary preemption
principles and not under complete preemption principles.
See Am. Elec. Power Co.
, 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 law depends,
inter alia
, on the preemptive effect of the
federal Act.” (citing
Int’l Paper Co. v. Ouellette
,
Second, “[t]he presence of a savings clause counsels against a finding that Congress
intended to sweep aside all state claims in a particular area.”
Pinney
,
[N]othing in this chapter shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution ; except that if an emission standard or limitation is in effect under an applicable implementation plan . . . , such State or political subdivision may not adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation under such plan or section.
§ 7416 (emphases added). Under §§ 7604(e) and 7416, except to the extent a state law
falls below a federal requirement under a limitation plan, the plain language of the CAA’s
savings clauses evidence no congressional intent for the CAA to be the exclusive cause of
action for air pollution claims. Section 7604(e) permits parties to resort to state statutes
and state common law to enforce emission standards or “to seek any other relief.” Section
7416 permits States and political subdivisions to “adopt or enforce . . . any” standard,
limitation, or requirement about air pollution that are more demanding than federal
provisions, and this broad language encompasses state-law claims that may be used to rein
in air pollution.
See City of Oakland
,
In the face of the CAA’s savings clauses, Defendants posit that the CAA “authorizes
states to impose additional restrictions only on in-state emissions[] and . . . provide[s]
remedies only for localized injuries stemming from
in-state
air pollution.” Defs.’ Opening
Br. 50. But Defendants’ argument continues to rest on a fundamental confusion of
Baltimore’s claims. None of Baltimore’s claims concern emission standards, federal
regulations about those standards, or pollution permits. Their Complaint is about
Defendants’ fossil-fuel products and extravagant misinformation campaign that
contributed to its injuries. Indeed, since we are operating under the well-pleaded complaint
rule,
Aetna Health
,
In sum, there is simply nothing within the “text of the statute” suggesting that state-
law claims are completely displaced by the CAA.
See Lontz
,
D. Relying upon a federal-enclaves theory, Defendants assert that federal jurisdiction is appropriate because a “substantial portion” of their operations occurred on federal land, including the Elk Hills Naval Petroleum Reserve in Kern County, California, and multiple naval installations. Defs.’ Opening Br. 46–47. Defendants are correct that naval installations are generally considered federal enclaves. See Allison v. Boeing Laser Tech. Servs. , 689 F.3d 1234, 1235 (10th Cir. 2012) (observing that federal enclaves include “military bases, federal facilities, and even some national forests and parks”). However, federal-question jurisdiction is not conferred merely because some of Defendants’ activities occurred on military installations. We decline to endorse Defendants’ overreaching approach to federal-question jurisdiction premised on federal enclaves.
Congress possesses the power to “exercise exclusive Legislation in all Cases
whatsoever, over such District (not exceeding ten Miles square) as may, . . . become the
Seat of the Government of the United States, and . . . exercise like Authority over all Places
purchased by the Consent of the Legislature of the State in which the Same shall be, for
the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings[.]”
U.S. Const. art. I, § 8, cl. 17. The federal government thus possesses “sole jurisdiction”
over its enclaves.
Surplus Trading Co. v. Cook
,
When deciding if a federal enclave confers jurisdiction, this Court has considered
whether the injury itself was sustained within the federal enclave.
See Stokes v. Adair
, 265
F.2d 662, 663, 665–66 (4th Cir. 1959). In
Stokes
, we were tasked with deciding whether a
district court possessed federal-question jurisdiction over an automobile accident that
caused a plaintiff to sustain injuries “on the United States Military Reservation of Fort
Leavenworth in the State of Kansas . . . .”
Id.
at 663. We held that the district court had
federal-question jurisdiction because Kansas ceded Fort Leavenworth to the federal
government, and we specifically noted that personal-injury actions occurring “on a federal
reservation” were not precluded from trial in state courts.
Id.
at 665–66. Other federal
courts have similarly reasoned that federal-question jurisdiction only lies over federal
enclaves when personal injuries are sustained
within
an enclave’s boundaries.
See Akin
,
On the Complaint’s face, Baltimore specifically states that “‘Baltimore’ refers to
Baltimore City’s geographic area, and specifically to non-federal lands within its
boundaries, unless otherwise stated.” J.A. 43. Baltimore therefore excludes federal
enclaves from its Complaint “unless otherwise stated.” J.A. 43. As to where Baltimore’s
climate-change injuries have occurred, the Complaint emphasizes they have taken place
within Baltimore’s borders and not on a federal enclave. For instance, the Complaint
maintains that climate change, resulting from Defendants’ fossil-fuel products and
marketing campaign, has damaged Baltimore’s internal infrastructure, including its
railways and roads, and increased the costs of maintaining, repairing, and replacing
infrastructure within Baltimore.
See
J.A. 144–45. It also describes the adverse impacts
that climate change will have on the health of Baltimore’s citizens as opposed to those
living on federal enclaves.
See
J.A. 146–47. None of these allegations suggest that
Baltimore’s injuries occurred or will occur on federal enclaves. All of Baltimore’s harms
are pleaded within the confines and boundaries of Baltimore City.
See
J.A. 139–48. So
given Baltimore’s alleged injuries have not occurred on a federal enclave, it seeks relief
for harms sustained on non-federal land, which precludes the exercise of federal-question
jurisdiction.
See Bd. of Cnty. Comm’rs of Boulder Cnty.
,
Again, federal-question jurisdiction tied to federal enclaves “generally requires ‘that
all
pertinent events t[ake] place on a federal enclave.’”
Id.
at 1271 (quoting
Rosseter v.
Indus. Light & Magic
, No. C 08-04545 WHA,
E. Continuing on their quest for federal jurisdiction, Defendants invoke the OCSLA’s jurisdictional grant to reach federal court. They believe “[Baltimore]’s claims as alleged encompass all of Defendants ‘exploration and production’ of fossil fuels on the OCS . . . .” Defs.’ Opening Br. 43. Rejecting Defendants jurisdictional invocation of the OCSLA, the district court held that Defendants failed to show a but-for connection between Baltimore’s causes of action and the Outer Continental Shelf (OCS). BP P.L.C. , 388 F. Supp. 3d at 566–67. Defendants do not believe a but-for connection is a requirement under the OCSLA’s jurisdictional grant, and, even if it is, they maintain it is satisfied. We disagree with Defendants on both fronts.
1. We first consider whether the OCSLA’s jurisdictional grant requires a but-for connection between a cause of action and the OCS. In full, the OCSLA provides federal district courts with original jurisdiction to hear cases involving the OCS [17] :
[T]he district courts of the United States shall have jurisdiction of cases and controversies arising out of , or in connection with (A) any operation conducted on the outer Continental Shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals, or (B) the cancellation, suspension, or termination of a lease or permit under this subchapter.
43 U.S.C. § 1349(b)(1) (emphasis added). Section 1349(b)(1) is a “broad” grant of federal
jurisdiction.
Texaco Expl. & Prod., Inc. v. AmClyde Engineered Prods. Co., Inc.
, 448 F.3d
760, 768 (5th Cir. 2006). When assessing jurisdiction under this provision, we consider
whether “(1) the activities that caused the injury constituted an ‘operation’ ‘conducted on
the outer Continental Shelf’ that involved the exploration and production of minerals, and
(2) the case ‘arises out of, or in connection with’ the operation.”
In re Deepwater Horizon
,
Examining the text alongside relevant case law resolves this matter. To “arise”
means “[t]o originate; to stem (from)” or “[t]o result (from).”
Arise
, B LACK ’ S L AW
D ICTIONARY (11th ed. 2019). “Connection” denotes a “contextual relation or association”
or “relationship in fact.”
Connection
, M ERRIAM -W EBSTER , https://www.merriam-
webster.com/dictionary/connection (last visited Feb. 27, 2022). Under their plain
meanings, “arising out of” and “in connection with” both require a causal relationship to
determine if a given controversy actually “result[s] (from)” or possesses a “relationship in
fact [with]” activities conducted on the OCS.
See Burrage v. United States
,
Accordingly, we join our sister circuits and find that invoking jurisdiction
under § 1349(b)(1) requires a but-for connection between a claimant’s cause of action and
operations on the OCS.
See Bd. of Cnty. Comm’rs of Boulder Cnty.
,
2.
When applying a but-for test, we must ask if Baltimore’s injuries “would not have
occurred” but for Defendants’ conduct on the OCS.
See Wright v. Lassiter
,
Here, Baltimore’s allegations and injuries are not confined to Defendants’ fossil-
fuel activities on the OCS. Defendants are also being sued for unlawfully marketing,
promoting, and ultimately selling their fossil-fuel products, which includes their collective
failure to warn the public of the known dangers associated with their fossil-fuel products.
See
J.A. 43, 150–71. Defendants’ marketing practices, which led to increased consumption
of their fossil-fuel products and then climate change, are far removed from their OCS
activities and their tort liability. In other words, irrespective of Defendants’ activities on
the OCS, Baltimore’s injuries still exist as a result of that distinct marketing conduct.
Regardless, Defendants concede that some of their fossil-fuel production occurred outside
of the OCS. Defs.’ Opening Br. 41, 46–47; J.A. 41 (Defendants’ noting that their oil and
gas activities occurred within the National Wildlife Refuge System). And Baltimore’s
Complaint contains examples of Defendants’ land-based activities that contributed to its
injuries and are hundreds of miles away from the OCS.
See
J.A. 66 (mentioning
CONSOL’s coal mines in Appalachia). Because Baltimore’s injuries remain even after we
disregard “whatever slice” of Defendants’ fossil-fuel production occurred on the OCS, we
cannot find a but-for connection satisfying the OCSLA’s jurisdictional grant.
See Bd. of
Cnty. Comm’rs of Boulder Cnty.
,
Case law supports this finding since Baltimore’s Complaint only has a “mere
connection” to the OCS. In
Tennessee Gas Pipeline
, a barge physically “allided” with a
fixed platform on the OCS, and the Fifth Circuit found a but-for connection, concluding
“there would not have been an accident had Tennessee Gas not built its platform to extract
minerals from the OCS
.
”
Ignoring the OCSLA’s text and judicial decisions applying it, Defendants argue that
the OCSLA’s policy aims will be frustrated and a parade of horrible outcomes will ensue
if we decline federal jurisdiction. To them, if Baltimore is ultimately granted relief, “[s]uch
relief would substantially discourage OCS production and jeopardize the
future viability
of
the federal OCS leasing program,
potentially
costing the federal government hundreds of
millions of dollars in revenues.” Defs.’ Opening Br. 45. Maybe so. But under our laws,
“a defendant cannot establish removal jurisdiction by mere speculation and conjecture,
with unreasonable assumptions.”
Ibarra v. Manheim Invs., Inc.
,
For the foregoing reasons, we affirm the district court’s thoughtful rejection of the OCSLA’s jurisdictional grant as a basis for federal jurisdiction over Baltimore’s claims.
F. Defendants next press removal jurisdiction under the bankruptcy removal statute.
The bankruptcy removal statute provides:
A party may remove any claim or cause of action in a civil action other than . . . a civil action brought by a governmental unit’s police or regulatory power, to the district court where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title.
28 U.S.C. § 1452(a). In turn, § 1334(b) states that federal district courts shall have “original
but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or
related to a case under title 11.” Defendants do not argue that Baltimore’s Complaint
involves a bankruptcy proceeding under Title 11. Instead, they maintain that Baltimore’s
Complaint is “related to” bankruptcy cases because it primarily seeks to hold them liable
for the “pre-bankruptcy conduct” of a Chevron subsidiary, Texaco, Inc. Defs.’ Opening
Br. 52. Defendants describe Texaco’s bankruptcy plan, along with those of Defendants’
other predecessors, subsidiaries, and affiliates, as confirmed.
Id.
But as with Defendants’
reliance upon the OCSLA, Baltimore’s suit is too remote for bankruptcy removal to lie.
Generally, at the pre-confirmation stage of a reorganization plan, we first stated that
the “related to” test addressed “whether
the outcome of [a civil] proceeding could
conceivably have any effect on the estate being administered in bankruptcy.
”
In re Celotex
Corp.
,
1.
Defendants explicitly rely upon a 1988 confirmed plan from Chevron’s subsidiary,
Texaco, to contend we possess bankruptcy jurisdiction.
[18]
First, we find it hard to fathom
how Baltimore’s suit, filed thirty years later, has any “close nexus” to Texaco’s confirmed
planned because it is so far removed from the initial bankruptcy confirmation.
See Nuveen
Mun. Tr. ex rel. Nuveen High Yield Mun. Bond Fund v. Withumsmith Brown, P.C.
, 692
F.3d 283, 294 (3d Cir. 2012) (noting that bankruptcy jurisdiction “wanes” after the
confirmation of a case). Secondly, Baltimore’s claims are completely independent and
distinct from Texaco’s bankruptcy plan, there is no indication that the bankruptcy plan
involved climate change, and Defendants do not explain how a judgment more than thirty
years later could impact Texaco’s estate.
See Valley Historic
,
Citing to a powerpoint presentation they filed in the district court, Defendants
speculate that other corporate entities related to Defendants “may also be operating under
confirmed bankruptcy cases.” Defs.’ Opening Br. 52 (citing Ex. 20 to Decl. of Joshua S.
Lipshutz,
Mayor & City Council of Balt. v. BP P.L.C.
,
Accordingly, we dispense with Defendants’ primary arguments because they have failed to show that Baltimore’s suit has a “close nexus” or is “related” to any bankruptcy plan involving any of its predecessors, subsidiaries, or affiliates under § 1452(a).
2. Even were we to find bankruptcy jurisdiction is proper, removal is still inappropriate if the proceeding is a civil action by a “governmental unit to enforce such governmental unit’s police or regulatory power . . . .” § 1452(a). Baltimore’s suit is such an action, and we note that Defendants only advance one sentence concerning whether this “police or regulatory power” exception is inapplicable to their bankruptcy removal invocation. See Defs.’ Opening Br. 52–53.
Baltimore clearly qualifies as a “governmental unit” since it is a municipality under
Title 11 and, thus, for the purposes of § 1452(a) as well.
See
11 U.S.C. § 101(27) (defining
a “governmental unit” as a “municipality”). This Court has not yet interpreted a
governmental unit’s “police or regulatory power” under § 1452(a). But we have interpreted
“police and regulatory power” under § 362(b)(4) of the bankruptcy code, which is an
exception to the automatic stay of actions brought by creditors against debtors after
bankruptcy petitions are filed.
See Safety-Kleen, Inc. (Pinewood) v. Wyche
,
As noted above, Baltimore brings eight different claims against Defendants, and all
of those claims seek to shift the costs of climate-change injuries onto Defendants as
opposed to burdening “local taxpayers, residents, or broader segments of the public.” J.A.
47. In its public nuisance claim, for example, Baltimore asserts that Defendants’
interference with its property, infrastructure, and public resources will be “borne by
[Baltimore’s] citizens” because they will purportedly suffer economic losses and negative,
public-health consequences. J.A. 151. This is easily said for Baltimore’s other claims as
well. Baltimore thus seeks to protect its citizens, property, and resources by suing
Defendants, all of whom are private parties, for the detrimental impacts of their fossil-fuel
products.
See
J.A. 150–71. We have no doubt this suit is a valid exercise of Baltimore’s
police power.
See Crutcher v. Kentucky
,
Thus, we find no federal jurisdiction under the bankruptcy removal statute and affirm the district court in this regard.
G. With few theories remaining, Defendants attempt to reach federal court by appealing to our admiralty jurisdiction under the Constitution and 28 U.S.C. § 1333(1). They believe that admiralty jurisdiction is conferred merely because “fossil-fuel extraction occurs on vessels engaged in maritime commerce[.]” Defs.’ Opening Br. 53. We reject Defendants’ far-reaching view of admiralty jurisdiction.
1.
The Constitution extends our judicial power to “all Cases of admiralty and maritime
Jurisdiction.” U.S. Const. art. III, § 2. Congress provides that “[t]he district courts shall
have original jurisdiction, exclusive of the courts of the States, of: . . . Any civil case of
admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which
they are otherwise entitled.” 28 U.S.C. § 1333(1). The saving-to-suitors clause
of § 1333(1) “preserves remedies and the concurrent jurisdiction of state courts over some
admiralty and maritime claims.”
Lewis v. Lewis & Clark Marine, Inc.
,
Adhering to those precedents, Baltimore argues that its state-law claims are not
removable under § 1441, the general removal statute, if they sound in admiralty unless
there is “some independent jurisdictional basis, such as diversity or federal question
jurisdiction.” Baltimore’s Resp. Br. 52–53. Defendants aptly point out that the Venue
Clarification Act of 2011 eliminated a portion of § 1441(b) that federal courts previously
believed blocked the removal of admiralty claims without another jurisdictional basis. Pub.
L. No. 112-63, § 103, 125 Stat. 758, 759 (2011);
see also Lu Junhong v. Boeing Co.
, 792
F.3d 805, 817–18 (7th Cir. 2015) (holding that § 1441 permits removal when there is an
admiralty case under § 1333(1)). The parties, however, only devote one paragraph each to
this admittedly complicated issue that has divided federal courts. Thomas J. Schoenbaum,
Admiralty and Maritime Law
§ 4.3, Westlaw (database updated Dec. 2021) (“After 2011,
courts split on whether the working of the amended statute changes the rule for removal of
maritime claims.”). Because of their inadequate briefing, we decline to formally decide
whether § 1441 permits removal based on the admiralty jurisdiction grant under § 1333(1).
United States v. Banks
, 884 F.3d 998, 1011 n.3 (10th Cir. 2018) (“Given the unsettled
nature of this question and the parties’ inadequate briefing, we decline to decide this
question here.”);
see also Covey v. Assessor of Ohio Cnty.
,
2.
To invoke admiralty jurisdiction, a party must satisfy “conditions both of location
and of connection with maritime activity.”
Jerome B. Grubart, Inc. v. Great Lakes Dredge
& Dock Co.
, 513 U.S. 527, 534 (1995). To satisfy the location test, a tort must either
“occur on navigable waters, or, if suffered on land, at least be caused by a vessel on
navigable water.”
White v. United States
,
3. To begin, Baltimore pleads that its injuries involve damage to its “highways, rail lines, emergency response facilities, waste water facilities, and power plants . . . .” J.A. 143. And, according to Baltimore, those land-based injuries stem from “ sea level rise and associated impacts , increased frequency and severity of extreme precipitation events, increased frequency and severity of draught, [and the] increased frequency and severity of heat waves and extreme temperatures . . . .” J.A. 140 (emphasis added). While Baltimore alleges “sea level rise” as one of the many sources of its injuries, the actual torts involving Baltimore’s property have occurred on land as opposed to navigable waters. Grubart , 513 U.S. at 533. Baltimore’s Complaint never mentions any tort that occurred on navigable waters, and Defendants do not identify one.
Still, the location test may be satisfied when a land-based tort is caused by a vessel
on navigable waters.
Grubart
,
Even if we credit Defendants with having vessels, Baltimore never alleges that any
vessel on navigable waters caused any of its land-based injuries. Instead, Baltimore
repeatedly references “flood-associated damages” and “heavy rains” that have destroyed
its infrastructure and exacerbated the health and environmental risks of its citizens. J.A.
145. There are no allegations that its injuries were either “caused by the vessel itself or its
appurtenances.”
Egorov, Puchinsky, Afanasiev & Juring v. Terriberry, Carroll & Yancey
,
Accordingly, Defendants have failed to carry their removal burden of showing how
their floating rigs and platforms qualify as vessels for the location test. We conclude that
they are not, as a matter of law, especially since Baltimore’s Complaint never invokes them
as the cause of its land-based torts.
Cf. Grubart
,
H.
At this juncture, the only remaining path to federal court is Defendants’ theory of
federal officer removal. In their Supplemental Brief, which was filed after their litigation
in the Supreme Court, Defendants reiterate that Baltimore’s case is removable on the
grounds that it originally raised on appeal, including federal officer removal. Defs.’ Suppl.
Br. 2 n.1. Defendants do not present any new arguments or shortcomings concerning our
previous holding that rejected the propriety of federal officer removal. The Supreme Court
only required us to consider Defendants’ other removal grounds on remand and never
addressed our holding concerning federal officer removal.
Compare BP P.L.C.
, 141 S. Ct.
at 1543,
with BP P.L.C.
,
The federal officer removal statute authorizes the removal of state-court actions
filed against “any 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.” 28 U.S.C. § 1442(a)(1). Its “basic purpose” is to protect against the
interference with federal operations that would ensue if a state were able to arrest federal
officers and agents acting within the scope of their authority and bring them to trial in a
state court for an alleged state-law offense.
Watson v. Philip Morris Co.
,
Thus, to remove a case under § 1442(a)(1), a private defendant must show: “(1) that it ‘act[ed] under’ a federal officer, (2) that it has ‘a colorable federal defense,’ and (3) that the charged conduct was carried out for [or] in relation to the asserted official authority.” Sawyer v. Foster Wheeler LLC , 860 F.3d 249, 254 (4th Cir. 2017) (first alteration in original) (citations omitted). Here, Defendants assert that Baltimore’s state-court action is removable under the federal officer removal statute “because the City ‘bases liability on activities undertaken at the direction of the federal government.’” BP P.L.C. , 388 F. Supp. 3d at 567 (citation omitted). It is the first and third prongs that are therefore in dispute. See Baltimore’s Resp. Br. 14–21. We begin with the first, though the acting-under and causal-nexus prongs often “collapse into a single requirement.” In re MTBE , 488 F.3d at 124; see also 28 U.S.C. § 1442(a)(1) (targeting for removal state-court actions “for or relating to any act under color of [federal] office”).
1. The statutory phrase “acting under” describes “the triggering relationship between a private entity and a federal officer.” Watson , 551 U.S. at 149. Although the words “acting under” are “broad,” the Supreme Court has emphasized that they are not “limitless.” Id. at 147. In cases involving a private entity, the “acting under” relationship requires that there at least be some exertion of “subjection, guidance, or control” on the part of the federal government. See id. at 151 (quoting Webster’s New International Dictionary 2765 (2d ed. 1953)). Additionally, “precedent and statutory purpose” make clear that “‘acting under’ must involve an effort to assist , or to help carry out , the duties or tasks of the federal superior.” Id. at 152.
In
Watson
, the Supreme Court held that “simply
complying
with the law” does not
constitute the type of “help or assistance necessary to bring a private [entity] within the
scope of the statute,”
id.
, no matter how detailed the government regulation or how
intensely the entity’s activities are supervised and monitored,
see id.
at 153. In doing so,
the Court distinguished several decisions cited by the defendant there in which lower courts
had held that private
contractors
fell within the terms of § 1442(a)(1), at least where the
relationship was “an unusually close one involving detailed regulation, monitoring, or
supervision.”
Id.
at 153 (citing
Winters v. Diamond Shamrock Chem. Co.
,
The answer to this question lies in the fact that the private contractor in such cases is helping the Government to produce an item that it needs. The assistance that private contractors provide federal officers goes beyond simple compliance with the law and helps officers fulfill other basic governmental tasks. In the context of Winters , for example, Dow Chemical fulfilled the terms of a contractual agreement by providing the Government with a product that it used to help conduct a war. Moreover, at least arguably, Dow performed a job that, in the absence of a contract with a private firm, the Government itself would have had to perform.
Id. at 153–54.
The Supreme Court found these circumstances sufficient to distinguish Dow
Chemical (the contractor in
Winters
) from the regulated tobacco companies who sought
removal in
Watson
, and so it did not address “whether and when particular circumstances
may enable private contractors to invoke the statute.”
Id.
at 154. Nevertheless, in light of
the Court’s reasoning, we have relied on
Watson
to hold that certain private contractors
“act under” federal officials.
See Sawyer
,
2. Here, Defendants collectively seek removal under § 1442 based on three contractual relationships between certain Defendants and the federal government: (1) fuel supply agreements between one Defendant (Citgo) and the Navy Exchange Service Command (“NEXCOM”) from 1988 to 2012; (2) oil and gas leases administered by the Secretary of the Interior under the OCSLA; and (3) a 1944 unit agreement between the predecessor of another Defendant (Chevron) and the U.S. Navy for the joint operation of a strategic petroleum reserve in California known as the Elk Hills Reserve. For the reasons that follow, we agree with Baltimore that none of these relationships are sufficient to justify removal under the federal officer removal statute in this case, either because they fail to satisfy the acting-under prong or because they are insufficiently related to Baltimore’s claims for purposes of the nexus prong.
a. First, we have little trouble concluding that the NEXCOM fuel supply agreements do not satisfy the “acting under” requirement. These agreements required Defendant Citgo to advertise, supply, and distribute gasoline and diesel to NEXCOM, which NEXCOM resold at a discount to “active duty military, retirees, reservists, and their families” at “service stations operated by NEXCOM on Navy bases located in a number of states across the country.” J.A. 216. Although Defendants contend that Citgo helped “the Government to produce an item that it needs” by selling NEXCOM fuel for resale on Navy bases, see Watson , 551 U.S. at 153, such logic would bring every seller of contracted goods and services within the ambit of § 1442 when the government is a customer.
We refuse to adopt such a sweeping interpretation of
Watson
. In our view, the key
lesson from
Watson
is that closely supervised government contractors are distinguishable
from intensely regulated private firms because the former assist the government in carrying
out basic governmental functions.
See
To be sure, other circuits have applied the
Watson
dictum beyond the military-
procurement-contract context, and we do not suggest that only defense contractors may
invoke the federal officer removal statute.
[20]
Yet none of those cases have confronted a
contract like the one we have here, which involves the sale of a standardized consumer
product. Indeed, the Ninth Circuit has held, albeit in an unpublished decision, that the fact
that the federal government purchases “off-the-shelf” products from a manufacturer “does
not show that the federal government [has] supervised [the] manufacture of [such products]
or directed [that they be] produce[d] in a particular manner, so as to come within the
meaning of ‘act[ed] under.’”
Washington v. Monsanto Co.
,
Although Defendants strongly resist the off-the-shelf-products analogy by pointing
to particular provisions in the fuel supply agreements, we find those provisions unavailing.
Defendants emphasize that the agreements: (1) “set forth detailed ‘fuel specifications’ that
required compliance with specified American Society for Testing and Materials standards,
and compelled NEXCOM to ‘have a qualified independent source analyze the products’
for compliance with those specifications”; (2) “authorized the Contracting Officer to
inspect delivery, site, and operations”; and (3) “established detailed branding and
advertising requirements.” Defs.’ Reply Br. 19–20 (footnotes omitted). But we have
reviewed the contractual provisions cited by Defendants, and they are a far cry from the
type of close supervision that existed in both
Sawyer
and
Winters
.
See Sawyer
, 860 F.3d
at 253 (noting that the Navy provided “highly detailed ship [and military] specifications”
that boilers were required to match and exercised “intense direction and control . . . over
all written documentation to be delivered with its naval boilers,” including warnings);
Winters
, 149 F.3d at 398–99 (noting that the Department of Defense required Dow
Chemical to provide Agent Orange under threat of criminal sanctions, maintained strict
control over the chemical’s development, and required that it be produced according to its
specifications);
cf. Isaacson v. Dow Chem. Co.
,
b.
Next up are the oil and gas leases. Defendants allege that Chevron and “other
Defendants” have extracted oil and gas on the federal OCS pursuant to a leasing program
administered by the Secretary of the Interior under the OCSLA. J.A. 212;
see, e.g.
, J.A.
233–39 (boilerplate lease);
see also Ctr. for Sustainable Econ. v. Jewell
,
The leases grant lessees “the exclusive right and privilege to drill for, develop, and
produce oil and gas resources” in the submerged lands of the OCS in exchange for certain
royalties on production,
see
J.A. 233–34, and requires them to exercise diligence in the
development of the leased area by engaging in exploration, development, and production
activities in accordance with government-approved plans,
see
J.A. 234;
see also
30 C.F.R.
§§ 550.200–.299 (expounding plans referenced in lease). The leases also place certain
conditions on the disposition of oil and gas that is produced. Defendants highlight two
such conditions. The first mandates that twenty percent of production be offered to “small
or independent refiners.” J.A. 235. The second gives the government a right of first refusal
address whether and when the government will market a branded product under a
contractor’s brand or trade name.
See
Exs. F and G to Decl. of Arnold Walton,
Mayor &
City Council of Balt. v. BP P.L.C.
,
to purchase all production “[i]n time of war or when the President of the United States shall so prescribe.” J.A. 235.
Defendants argue that the foregoing provisions demonstrate that the Defendant lessees were “acting under” the Secretary of the Interior in extracting, producing, and selling fossil-fuel products on the OCS. We disagree.
For starters, we note that many of lease terms are mere iterations of the OCSLA’s
regulatory requirements. Though OCS resource development is highly regulated,
“differences in the degree of regulatory detail or supervision cannot by themselves
transform . . . regulatory
compliance
into the kind of assistance” that triggers the “acting
under” relationship.
See Watson
,
Moreover, we need not decide whether the OCSLA leases are distinguishable from
other more run-of-the-mill natural-resources leases because they implicate national energy
needs. Either way, we are not convinced that the supervision and control to which OCSLA
lessees are subject connote the sort of “unusually close” relationship that courts have
previously recognized as supporting federal officer removal.
See Watson
,
Finally, even to the extent that the OCSLA leases toe the “acting under” line, we still agree with the district court’s analysis as to § 1442’s third prong. Any connection between fossil-fuel production on the OCS and the conduct alleged in the Complaint is simply too remote.
To satisfy the third prong, the conduct charged in the Complaint need only “relate
to” the asserted official authority.
See Sawyer
,
In this case, the district court held that even if the “acting under” and “colorable
federal defense” requirements were satisfied, Defendants did not plausibly assert that the
charged conduct was carried out “for or relating to” the alleged official authority, given the
“wide array of conduct” for which they were sued.
See BP P.L.C.
,
On appeal, Defendants take issue with primarily two aspects of the district court’s analysis. First, they argue that the lack of direction as to concealment or warnings is irrelevant to some of Baltimore’s claims, namely, strict liability for design defect. Second, they contend that a lack of control as to total production and sales is not dispositive under Sawyer ’s relaxed reading of the third “nexus” prong.
We disagree with Defendants on both fronts. When read as a whole, the Complaint clearly seeks to challenge the promotion and sale of fossil-fuel products without warning and abetted by a sophisticated disinformation campaign. Of course, there are many references to fossil-fuel production in the Complaint, which spans 132 pages. But, by and large, these references only serve to tell a broader story about how the unrestrained production and use of Defendants’ fossil-fuel products contribute to greenhouse gas pollution. Although this story is necessary to establish the avenue of Baltimore’s climate- change-related injuries, it is not the source of tort liability. Put differently, Baltimore does not merely allege that Defendants contributed to climate change and its attendant harms by producing and selling fossil-fuel products; it is the concealment and misrepresentation of the products’ known dangers—and the simultaneous promotion of their unrestrained use— that allegedly drove consumption, and thus greenhouse gas pollution, and thus climate change. [23]
For this reason, the lack of federal control over the production and sale of all fossil- fuel products is relevant to the nexus analysis, and the district court did not err in relying upon that fact when finding that any connection between the charged conduct and the asserted official authority was even further diminished. If production and sales went to the heart of Baltimore’s claims, we might be inclined to think otherwise. After all, the alleged government-directed conduct (here, the production and sale of fossil fuels extracted on the OCS) need only “relate to” the conduct charged in the Complaint. But given the foregoing allegations, we agree with the district court’s conclusion that the relationship between Baltimore’s claims and any federal authority over a portion of certain Defendants’ production and sale of fossil-fuel products is too tenuous to support removal under § 1442.
In sum, we hold that the Defendants who participated in the OCSLA leasing program were not “acting under” federal officials in extracting and producing fossil fuels on the OCS, and any connection between such activity and Baltimore’s claims is too attenuated in any event.
c. That leaves the 1944 unit agreement governing the operation of the Elk Hills Reserve. Because the agreement has a complicated history, we begin with its origin and purpose, followed by a general overview of its terms (or at least those in dispute). In the end, however, we decline to pass on the question of whether it satisfies the “acting under” prong. Like the OCSLA leases, we hold that the agreement fails to meet the third prong.
i. The Elk Hills Reserve is located in Kern County, California, and originated from a 1912 Executive Order.
At the turn of the [twentieth] century, Government lands in the West were rapidly being turned over to private ownership. At the same time, there was a growing realization of the importance of oil for the Navy, which was then changing its ships from coal to oil burning. In response to arguments that the Government should preserve oil for Naval purposes, President Taft withdrew large portions of land in California and Wyoming from eligibility for private ownership, and in 1912 set aside [the Elk Hills Reserve] by an Executive Order. . . .
The establishment of the Reserve was expressly made subject to pre-existing private ownership. There are approximately 46,000 acres within the Reserve, approximately one-fifth [was] owned by [the Standard Oil Company of California] and the remainder, approximately four-fifths by Navy. The Standard lands [were] not in one block, but [were] checker-boarded throughout the Reserve. The Executive Order establishing the Reserve affected the Government lands in the field as far as future use and disposition were concerned, but it had no effect on the privately owned lands, and the owners of those lands were free to use and dispose of them as they saw fit.
United States v. Standard Oil Co.
,
Because production from one part of the Elk Hills Reserve could have reduced the amount of oil underlying another part of the Reserve, the Navy and Standard Oil (a Chevron predecessor) initially “had an understanding to the effect that neither would drill wells . . . without six months’ notice to the other.” Id. at 627; see also id. (explaining that underlying both parties’ lands were “separate accumulations of hydrocarbons,” which, “unlike solid minerals, do not remain in place but move because of changes in underground pressure and [thus] move toward producing wells”). But the tension between Standard’s legitimate goal of producing oil on its land and the Navy’s duty to conserve its hydrocarbons in the ground until needed in an emergency became untenable on the brink of World War II. So the parties began negotiations over “an exchange, purchase or condemnation of Standard’s land in the Reserve on the one hand, or their operation as a unit with the Navy land,” on the other. Id.
These negotiations ultimately resulted in the 1944 Unit Plan Contract (“UPC”). [25] A
“unit agreement” is “a common arrangement in the petroleum industry where two or more owners have interests in a common pool,” which is operated as a “unit.” Id. The parties share production and costs in agreed-upon proportions, and, ordinarily, the objective is “to produce currently, at minimum expense and pursuant to good engineering practices.” Id. The UPC involved here, however, was unique in that “its purpose was not to produce currently, and its effect was to conserve as much of the hydrocarbons in place as was feasible until needed for an emergency.” Id. “This required curtailing production of Standard’s hydrocarbons along with that of Navy, for which Standard would have to receive compensation.” Id. Accordingly, “in consideration for Standard curtailing its production plus giving up certain other rights,” id. at 627–28, the UPC gave Standard the right to take specified volumes of oil from certain zones in the pool—namely, an average of 15,000 barrels per day, or a lesser amount fixed by the Secretary of the Navy, with (1) a ceiling of 25,000,000 barrels or one-third of Standard’s total share, whichever was less, and (2) a floor of an amount sufficient to cover Standard’s out-of-pocket expenses in maintaining the Reserve in good oil-field condition, see id. at 628; J.A. 245–46, 250–52. ii.
With this background in mind, we turn to the specific UPC provisions relied upon by Defendants to establish that one of their predecessors (Standard) “acted under” the Navy when it engaged in fossil-fuel production during the twentieth century.
In the main, Defendants stress that the UPC gave the Navy “ exclusive control over the exploration, prospecting, development, and operation of the [Elk Hills] Reserve,” and the “ full and absolute power to determine . . . the quantity and rate of production from[] the Reserve.” Defs.’ Reply Br. 18 (second alteration in original) (citation omitted); accord J.A. 249–50. In particular, they note that the UPC “obligated” Standard “to operate the Reserve in such manner as to produce ‘not less than 15,000 barrels of oil per day,’” and allowed the Navy to suspend or increase the rate of production in its “discretion.” Defs.’ Reply Br. 18–19 (quoting J.A. 250) (citing J.A. 250–51).
Baltimore counters that these provisions do not establish that Standard was producing oil at the direction of a federal officer. According to Baltimore, these provisions merely required that the pool be maintained in a manner that would have made it capable of producing at least 15,000 barrels per day until Standard received its share under the contract. See J.A. 250 (“Until Standard shall have received . . . its share of production . . . , the Reserve shall be developed and operated in such manner and to such extent as will, so far as practicable, permit production . . . to be maintained at a rate sufficient to produce therefrom not less than 15,000 barrels of oil per day . . . .”). As a result, Baltimore argues that Standard could have complied with the contract by producing no oil at all, unless and until the Navy elected to increase the rate of production via congressional authorization. [26] And even then, Baltimore says, the contract did not necessarily make Standard responsible for production on the Navy’s behalf. See generally J.A. 249 (“Navy shall, subject to the provisions hereof, have the exclusive control over the exploration, prospecting, development, and operation of the Reserve, and Navy may, in its discretion, explore, prospect, develop, and/or operate the Reserve directly with its own personnel or it may contract for all or any part of such [activities] with competent and responsible parties[, including] . . . Standard . . . .” (emphasis added)).
At our first oral argument, Defendants shifted their focus away from whether the 15,000-barrels-per-day provision actually required Standard to produce any oil, as they argued in their briefs. Instead, Defendants pointed to the Naval Petroleum Reserves Production Act of 1976 (“1976 Act”), which “authorized and directed” the Secretary of the Navy to produce the Elk Hills Reserve “at the maximum efficient rate consistent with sound engineering practices for a period not to exceed six years . . . .” Naval Petroleum Reserves Production Act, Pub. L. No. 94-258, § 201(3), 90 Stat. 303, 308 (1976); see also supra note 26 (discussing UPC’s congressional-authorization requirement). Congress [26] See generally J.A. 246 (“[The UPC] does not and cannot, in and of itself, authorize the production of any of Navy’s share of the oil, . . . as distinct from that portion of Standard’s share hereinafter permitted to be produced and received by Standard under the terms of [the above-cited provisions]. The production of the remainder of Standard’s share and of all of Navy’s share must, except for the purpose of protecting, conserving, maintaining, or testing the Reserve, be preceded by and based upon [congressional] authorization . . .; and references hereinafter to an authorization or election by Navy to order the production of any such oil are intended to be limited to action by the Navy within the terms of any such [authorization].”).
authorized this increase in production after determining that “the Navy’s intent to maintain
a petroleum reserve, in case of national emergency in 1944, was no longer relevant,”
Chevron U.S.A., Inc. v. United States
,
Shortly thereafter, in 1977, Congress transferred authority over the Elk Hills
Reserve to the Department of Energy and assigned to it the Navy’s interest in the Reserve
as well as the UPC.
Chevron
,
iii. The parties’ dispute about the UPC and its significance for purposes of federal officer removal thus can be distilled to two main issues. First, was any oil ever produced from the Elk Hills Reserve at the Navy’s direction? And second, if so, was it Standard who carried out those orders?
In light of the 1976 Act, we think the answer to the first question is yes. But as to the second, we simply have no idea whether production authorized by Congress was carried out by Standard. At our first oral argument, counsel for Chevron merely stated that it was his “understanding” that Standard extracted oil on the Navy’s behalf under the unit agreement, and, more generally, that the government relies upon private companies because it does not have its own oil and gas engineers or drilling equipment. And although counsel later submitted a Rule 28(j) letter stating that the government had final authority over all production, “which was carried out by Standard, and later Chevron,” Defs.’ Letter of Suppl. Authorities 1, ECF No. 133, the letter merely cites the UPC as a whole in support of this assertion. In other words, it does not explain why Baltimore’s reliance on the operational-control provision cited above is misplaced, see J.A. 249, nor does it point to any other provision or provisions that support a different reading. [27] Thus, we are left wanting for pertinent details about Standard’s role in operating the Elk Hills Reserve and producing oil therefrom on behalf of the Navy, which might bear directly upon the “acting under” analysis. Indeed, if Standard was not responsible for producing the oil authorized by Congress in 1976, the upshot is that any extensive government control contemplated by the UPC only affected the parties’ relative shares and the development of the Reserve, not Standard’s duties with respect to any production carried out for the Navy’s benefit. Nevertheless, even if we were to conclude that Standard was responsible for such production under the UPC—and that this responsibility transformed Standard into a person “acting under” the Navy for purposes of § 1442—the production of oil from the Elk Hills Reserve by the predecessor of one of the twenty-six Defendants, like the production of fossil fuels on the OCS, is not sufficiently “related” to Baltimore’s claims. See supra Part IV.H.2.b. Accordingly, the district court was correct in concluding that the UPC cannot support federal officer removal in this case.
V. The impacts of climate change undoubtably have local, national, and international ramifications. See Massachusetts , 549 U.S at 521–53 (noting that the harms associated with climate change are “serious and well recognized”). But those consequences do not necessarily confer jurisdiction upon federal courts carte blanche. In this case, a municipality has decided to exclusively rely upon state-law claims to remedy its own climate-change injuries, which it perceives were caused, at least in part, by Defendants’ fossil-fuel products and strategic misinformation campaign. These claims do not belong in federal court. Given the jurisdictional inquiry before us, we take no view on whether Baltimore will ultimately fail or succeed in proving its claims under Maryland law. We cannot decide those questions. But we are confident that Maryland courts can capably adjudicate claims arising under their own laws that fail to otherwise provide any federal jurisdiction. Because we do not discern a proper basis for removal that permits a federal court to entertain Baltimore’s action, the district court’s order granting Baltimore’s Motion to Remand is
AFFIRMED.
Notes
[1] Defendants consist of BP entities (BP P.L.C.; BP America, Inc.; and BP Products North America Inc.); Crown Central entities (Crown Central Petroleum Corporation; Crown Central LLC; and Crown Central New Holdings LLC); Chevron entities (Chevron Corp. and Chevron U.S.A. Inc.); Exxon Mobil entities (Exxon Mobil Corp. and ExxonMobil Oil Corporation); Shell entities (Shell PLC and Shell USA, Inc.); Citgo Petroleum Corp.; ConocoPhillips entities (ConocoPhillips; ConocoPhillips Company; Louisiana Land & Exploration Co.; Phillips 66; and Phillips 66 Company); Marathon entities (Marathon Oil Company; Marathon Oil Corporation; Marathon Petroleum Corporation; and Speedway LLC); Hess Corp.; and CONSOL entities (CNX Resources Corporation; CONSOL Energy Inc.; and CONSOL Marine Terminals LLC).
[2] Under the Supremacy Clause, federal law is the “supreme Law of the Land.” U.S. Const.
art. VI, cl. 2. There are three types of ordinary preemption: (1) express preemption; (2)
conflict preemption; and (3) field preemption.
See Murphy v. Nat’l Collegiate Athletic
Ass’n
,
[3] We use the term “federal rule of decision” synonymously with “federal common law.”
See Baker, Watts & Co. v. Miles & Stockbridge
,
[4] Baltimore’s Motion to Remand identified that a significant conflict needed to be shown
for the district court to create federal common law.
See
Baltimore’s Motion to Remand at
17,
Mayor & City Council of Balt. v. BP P.L.C.
,
[5] Because City of New York is included in Defendants’ Supplemental Brief and Reply, and since that decision was decided while the parties were litigating in the Supreme Court, we exercise our discretion to evaluate any holding that Defendants might be relying upon from City of New York . Caldwell , 7 F.4th at 212 n.16; see also O’Melveny , 512 at 88 (considering the “closest” that a party “[came] to identifying a specific, concrete federal policy or interest that [was] compromised by California law”).
[6] We note that uniformity—in and of itself—is not always a federal interest, and
City of
New York
discounts contrary precedent.
See Empire Healthchoice Assurance, Inc. v.
McVeigh
,
[7] Defendants rely upon
United States v. Standard Oil Co. of California
, 332 U.S. 301
(1947), arguing that we must first determine the source of law for Baltimore’s claims.
Standard Oil
speaks to the threshold question of whether to even create a federal common
law claim: “And the answer to be given necessarily is dependent upon a variety of
considerations always relevant to the nature of the specific governmental interests
and to
the effects upon them of applying state law
.”
Id.
at 310 (emphasis added). And as we have
decided, Defendants do not meaningfully grapple with the significant-conflict inquiry to
invoke the governance of federal common law.
See supra
Part IV.A.3. In any event,
Standard Oil
does not aid Defendants. The decision did not turn on federal-question
jurisdiction, and the Court declined the opportunity to create a federal cause of action
sounding in indemnity for the federal government.
[8] Defendants cannot argue that federal common law completely preempts Baltimore’s
claims because the Supreme Court has only applied complete preemption in the context of
federal statutes, not federal common law.
See Metro. Life
,
[9] Because a federal issue is not “necessarily raised” by Baltimore’s Complaint, we need
not address the remaining factors of
Grable
jurisdiction.
See Burrell
,
[10] We note that
City of Oakland
considered federal common law in the context of
Grable
jurisdiction in a similar suit involving Defendants.
[11] We agree with Defendants that Maryland law permits a factfinder to balance competing
property interests for the “unreasonable-interference” question for private nuisances.
See
Wietzke
,
[12] Defendants have waived any such arguments since they were not raised in their Opening
Brief.
See Grayson O Co.
,
[13] It is unclear whether Defendants intend to invoke the foreign-affairs doctrine.
See
Defs.’
Opening Br. 38–39. But they seem to appeal to it by citing to
American Insurance
Association v. Garamendi
,
[14] Generally, escheat permits a State to take custody or assume title of abandoned property
when a person dies without leaving the property to any heirs and that property is located
within that State.
See Delaware v. New York
,
[15] This language appeared in the CAA when it was first passed, excluding the parenthetical addressing the “reduction or elimination” of pollutants. See Clean Air Act § 1, 77 Stat. at 393.
[16] According to Defendants, the State of Maryland and other municipalities have availed themselves of § 7607(b)(1)’s procedures by bringing actions against the EPA. See Defs.’ Opening Br. 49 n.14. This suggests that Baltimore is only required to do the same if it wants a federal court to review the EPA’s actions or rulemaking process. § 7607(b)(1). Baltimore is not seeking such relief. If anything, this indicates that Baltimore’s Complaint is seeking a different relief since it has not joined the State of Maryland in those lawsuits.
[17] The OCSLA defines “outer Continental Shelf” as “all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 1301 of this title, and of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.” 43 U.S.C. § 1331(a). “Lands beneath navigable waters” has three different definitions that are irrelevant to our jurisdictional inquiry. Id. § 1301(a)(1)– (3).
[18] The record does not appear to contain Texaco’s 1988 confirmed plan.
[19] Because we hold Defendants failed to satisfy the location test for admiralty jurisdiction,
we decline to address the connection test.
Gruver v. Lesman Fisheries Inc.
,
[20] For cases involving people other than defense contractors, see, for example,
Goncalves
ex rel. Goncalves v. Rady Child.’s Hosp. San Diego
,
[21] In light of the misleading-marketing allegations that are at the center of Baltimore’s Complaint, we pause to note that the “detailed branding and advertising requirements” cited by Defendants have absolutely nothing to do with those allegations. They simply (Continued)
[22] Defendants do not seriously contend otherwise. Instead, in their documents here and
below, they repeatedly point to the same lease provisions that we cite above, without
further explanation. This is a complex case, and we do not intend to suggest that
Defendants were required to outline the leases’ requirements in painstaking detail in order
to satisfy their burden of justifying federal officer removal. But they must provide
“‘candid, specific and positive’ allegations that they were acting under federal officers.”
In re MTBE
,
[23] The same holds true for Baltimore’s strict-liability design-defect claim. As Defendants point out, design-defect claims generally focus on “the product itself,” rather than “the conduct of the manufacturer.” Phipps v. Gen. Motors Corp. , 363 A.2d 955, 958 (Md. 1976). But that is not how Baltimore has framed its claim. Instead, Baltimore relies on the same misleading-marketing and denialist-campaign allegations cited above, averring that Defendants not only failed to warn the public about the climate effects they knew would result from the normal use of their products, but also took affirmative steps to misrepresent the nature of those risks, such as by disseminating information aimed at casting doubt on the integrity of scientific evidence that was generally accepted at the time and by advancing their own pseudo-scientific theories. According to Baltimore, these tactics “prevented reasonable consumers from forming an expectation that fossil-fuel products would cause grave climate changes.” J.A. 161; see also Maryland v. Exxon Mobil Corp. , 406 F. Supp. 3d 420, 461 (D. Md. 2019) (explaining that Maryland applies a consumer-expectation test in design-defect cases, and only applies the risk-utility test when the product malfunctions in some way (citing Halliday v. Sturm, Ruger & Co. , 792 A.2d 1145 (Md. 2002)). Under Baltimore’s own theory of liability, then, its design-defect claim hinges on its ability to demonstrate that Defendants’ promotional efforts deprived reasonable consumers of the ability to form expectations that they would have otherwise formed . Though we agree with Defendants that Baltimore’s theory appears to be a novel one, at least in the design-defect context, this may be a function of the unique circumstances that have allegedly given rise to this litigation. For our purposes, it is sufficient that Baltimore has limited its design-defect theory to one that turns on the promotion allegations, which have nothing to do with the action purportedly taken under federal authority. The viability of such a theory under Maryland law is a question for the Maryland courts to decide.
[24] Standard Oil involved a prior dispute over the same agreement, in which the Ninth Circuit endorsed the foregoing summary agreed upon by the parties in a pretrial statement.
[25] The parties entered into an earlier contract in 1942, but it was voluntarily terminated in 1943 due to doubts expressed by the Attorney General as to its legality. Id. The parties entered into the UPC in 1944, after Congress passed enabling legislation. See id. The UPC governed the joint operation and development of three initial “commercially productive zones” underlying the Elk Hills Reserve, two of which contained oil (the Stevens Zone and Shallow Oil Zone). Only the latter zone is at issue here, and all of the provisions discussed in this opinion pertain to that zone.
[27] Because Baltimore only claimed that Standard was not responsible for production at oral argument—in response to Defendants’ reliance on the 1976 Act, which Defendants, in turn, did not rely upon in their briefs on appeal—this issue is not addressed in Defendants’ briefing, either. Nor can we find any relevant explanation in the federal-officer allegations in the Notice of Removal.