MAYOR AND CITY COUNCIL OF BALTIMORE v. BP P.L.C.; BP AMERICA, INC.; BP PRODUCTS NORTH AMERICA, INC.; CROWN CENTRAL LLC; CROWN CENTRAL NEW HOLDINGS LLC; CHEVRON CORP.; CHEVRON U.S.A. INC.; EXXON MOBIL CORP.; EXXONMOBIL OIL CORPORATION; ROYAL DUTCH SHELL, PLC; SHELL OIL COMPANY; CITGO PETROLEUM CORP.; CONOCOPHILLIPS; CONOCOPHILLIPS COMPANY; PHILLIPS 66; MARATHON OIL COMPANY; MARATHON OIL CORPORATION; MARATHON PETROLEUM CORPORATION; SPEEDWAY LLC; HESS CORP.; CNX RESOURCES CORPORATION; CONSOL ENERGY, INC.; CONSOL MARINE TERMINALS LLC
No. 19-1644
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
March 6, 2020
PUBLISHED
MAYOR AND CITY COUNCIL OF BALTIMORE,
Plaintiff – Appellee,
v.
BP P.L.C.; BP AMERICA, INC.; BP PRODUCTS NORTH AMERICA, INC.; CROWN CENTRAL LLC; CROWN CENTRAL NEW HOLDINGS LLC; CHEVRON CORP.; CHEVRON U.S.A. INC.; EXXON MOBIL CORP.; EXXONMOBIL OIL CORPORATION; ROYAL DUTCH SHELL, PLC; SHELL OIL COMPANY; CITGO PETROLEUM CORP.; CONOCOPHILLIPS; CONOCOPHILLIPS COMPANY; PHILLIPS 66; MARATHON OIL COMPANY; MARATHON OIL CORPORATION; MARATHON PETROLEUM CORPORATION; SPEEDWAY LLC; HESS CORP.; CNX RESOURCES CORPORATION; CONSOL ENERGY, INC.; CONSOL MARINE TERMINALS LLC,
Defendants – Appellants,
and
LOUISIANA LAND & EXPLORATION CO.; PHILLIPS 66 COMPANY; CROWN CENTRAL PETROLEUM CORPORATION,
Defendants.
CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA,
Amicus Supporting Appellants.
NATIONAL LEAGUE OF CITIES; U.S. CONFERENCE OF MAYORS; INTERNATIONAL MUNICIPAL LAWYERS ASSOCIATION; PUBLIC CITIZEN, INC.; SHELDON WHITEHOUSE; EDWARD J. MARKEY; STATE OF MARYLAND; STATE OF CALIFORNIA; STATE OF CONNECTICUT; STATE OF NEW JERSEY; STATE OF NEW YORK; STATE OF OREGON; STATE OF RHODE ISLAND; STATE OF VERMONT; STATE OF WASHINGTON; MARIO J. MOLINA; MICHAEL OPPENHEIMER; BOB KOPP; FRIEDERIKE OTTO; SUSANNE C. MOSER; DONALD J. WUEBBLES; GARY GRIGGS; PETER C. FRUMHOFF; KRISTINA DAHL; NATURAL RESOURCES DEFENSE COUNCIL; ROBERT BRULLE; CENTER FOR CLIMATE INTEGRITY; CHESAPEAKE
Amici Supporting Appellee.
Appeal from the United States District Court for the District of Maryland, at Baltimore. Ellen L. Hollander, District Judge. (1:18-cv-02357-ELH)
Argued: December 11, 2019 Decided: March 6, 2020
Before GREGORY, Chief Judge, and FLOYD and THACKER, Circuit Judges.
Affirmed by published opinion. Judge Floyd wrote the opinion in which Chief Judge Gregory and Judge Thacker joined.
ARGUED: Theodore J. Boutrous, Jr., GIBSON, DUNN & CRUTCHER LLP, Los Angeles, California, for Appellants. Victor Marc Sher, SHER EDLING LLP, San Francisco, California, for Appellee. ON BRIEF: Joshua S. Lipshutz, Washington, D.C., Anne Champion, GIBSON, DUNN & CRUTCHER LLP, New York, New York; 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 KAY 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, New York, New York, Kannon Shanmugam, PAUL, WEISS, RIFKIND, WHARTON, GARRISON LLP, Washington, D.C., for Appellants Exxon Mobil Corporation and ExxonMobil Oil Corporation. David C. Frederick, James M. Webster, III, Brendan J. Crimmins, Grace W. Knofczynski, KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C., Washington, D.C.; Daniel B. Levin, Los Angeles, California, Jerome B. Roth, Elizabeth A. Kim, MUNGER, TOLLES & OLSON LLP, San Francisco, California, for Shell Oil Company and Royal Dutch 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; Sean C. Grimsley, Jameson R. Jones, BARTLIT BECK LLP, Denver, Colorado, for Appellants ConocoPhillips and ConocoPhillips Company. Jonathan Chunwei Su, LATHAM & WATKINS LLP, Washington, D.C., for Appellant Phillips 66. Steven M. Bauer, Margaret A. Tough, LATHAM & WATKINS LLP, San Francisco, California, for Appellants ConocoPhillips, ConocoPhillips Company, and 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, 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. Matthew K. Edling, SHER EDLING LLP, San Francisco,
FLOYD, Circuit Judge:
This appeal is about whether a climate-change lawsuit against oil and gas companies
I.
In July 2018, the Mayor and City of Baltimore ( Baltimore ) filed suit in Maryland state court against twenty-six multinational oil and gas companies ( Defendants ) that it says are partly responsible for climate change.1 According to Baltimore, Defendants substantially contributed to climate change by producing, promoting, and (misleadingly) marketing fossil fuel products long after learning the dangers associated with them. Specifically, Baltimore alleges that, despite knowing about the direct link between fossil fuel use and global warming for nearly fifty years, Defendants have engaged in a coordinated, multi-front effort to conceal that knowledge; have tried to discredit the growing body of publicly available scientific evidence by championing sophisticated disinformation campaigns; and have actively attempted to undermine public support for regulation of their business practices, all while promoting the unrestrained and expanded use of their fossil fuel products. See J.A. 43–47. As a result of Defendants’ conduct, Baltimore avers that it has suffered various climate change-related injuries, J.A. 92, including an increase in sea levels, storms, floods, heatwaves, droughts, and extreme precipitation. So Baltimore sued Defendants to shift some of the costs of these injuries on to them.
The Complaint asserts eight causes of action, all founded on Maryland law: public and private nuisance (Counts I–II); strict liability for failure to warn and design defect (Counts III–IV); negligent design defect and failure to warn (Counts V–VI); trespass (Count VII); and violations of the Maryland Consumer Protection Act,
Two Defendants, Chevron Corporation and Chevron U.S.A. Inc. (collectively, Chevron ), timely removed the case to the United States District Court for the District of Maryland.
Before continuing, a brief introduction to the various grounds for removal is helpful. Under
In this case, Chevron asserted eight grounds for removal. Four of those grounds were premised on federal-question jurisdiction under
Baltimore then moved to remand the case back to state court under
This timely appeal followed. Shortly after noticing their appeal, Defendants moved the district court to stay the execution of the remand to state court pending this appeal. The district court denied the motion, as did this Court. The Supreme Court likewise denied Defendants’ application for a stay. See BP P.L.C. v. Mayor & City Council of Balt., 140 S. Ct. 449 (2019) (mem.).
II.
As in all cases involving an appeal of a remand order, we must confront the threshold question of our appellate jurisdiction.
An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.
Therefore, as a matter of statutory interpretation, we must first determine the scope of our appellate jurisdiction under
In Noel v. McCain, 538 F.2d 633 (4th Cir. 1976), this Court held that when a case is removed on several grounds, appellate courts lack jurisdiction to review any ground other than the one specifically exempted from § 1447(d)‘s bar on review. Thus, in that case, we dismissed an appeal to the extent that it sought review of an order remanding a case for failure to raise federal questions. Id. at 635. Jurisdiction to review remand of a § 1441(a) removal, we explained, is not supplied by also seeking removal under § 1443(1). Id.
Because the only ground for removal that is made reviewable by
Notwithstanding our holding in Noel, Defendants insist that we have jurisdiction to review the entire remand order. That is so, Defendants say, because Noel has been effectively abrogated by the Supreme Court‘s decision in Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199 (1996), as well as the Removal Clarification Act of 2011, Pub. L. No. 112-51, 125 Stat. 545 (codified in scattered sections of 28 U.S.C.). They are wrong.
We begin with Yamaha. There, the Supreme Court interpreted the word order within the meaning of the interlocutory appeal statute,
Although at least one other circuit has found Yamaha persuasive in interpreting the word order under
The Removal Clarification Act of 2011 does not alter this conclusion. The Act amended
to the extent that Defendants attempt to argue that we are not bound by Noel‘s interpretation of
In sum, Noel remains binding precedent in this Circuit.5 Accordingly, we dismiss this appeal for lack of jurisdiction, id., insofar as it seeks to challenge the district court‘s determination with respect to the propriety of removal based on federal-question, OCSLA, admiralty, and bankruptcy jurisdiction.
III.
Having determined that we only have jurisdiction to review the district court‘s conclusion that removal was improper under the federal officer removal statute, we now turn to that issue.
We review de novo issues of subject matter jurisdiction, including removal. Ripley v. Foster Wheeler LLC, 841 F.3d 207, 209 (4th Cir. 2016). Although Defendants bear the burden of establishing jurisdiction as the party seeking removal, see Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004), the federal officer removal statute must be liberally construed, Watson v. Philip Morris Co., 551 U.S. 142, 150 (2007) (quoting Colorado v. Symes, 286 U.S. 510, 517 (1932)). As such, the ordinary presumption against removal does not apply. See Betzner v. Boeing Co., 910 F.3d 1010, 1014 (7th Cir. 2018).
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.
Thus, to remove a case under
A.
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
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.
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
B.
Here, Defendants collectively seek removal under
1.
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
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 551 U.S. at 153–54 ( The assistance that private contractors provide federal officers goes beyond simple compliance with the law and helps officers fulfill other basic governmental tasks . . . . [that] the Government itself would [otherwise] have . . . to perform. ). And the provision of means to engage in chemical warfare, as in Winters, or even the provision of specific component parts to be used aboard military vessels, as in Sawyer, is different in kind from the provision of motor vehicle fuel for resale on Navy bases—both in terms of the nature of the item provided and the level of supervision and control that is contemplated by the contract.
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
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., 738 F. App‘x 554, 555 (9th Cir. 2018) (sixth alteration in original) (quoting
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. 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 (internal quotation marks omitted)); 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., 517 F.3d 129, 138 (2d Cir. 2008) (rejecting off-the-shelf argument because commercially available products did not contain the Agent Orange herbicides in a concentration as high as that found in Agent Orange ). Rather, the cited provisions seem typical of any commercial contract. They are incidental to sale and sound in quality assurance.7
2.
Next up are the oil and gas leases. Defendants allege that Chevron and other Defendants have extracted oil and gas on the federal Outer Continental Shelf
592 (“The [OCSLA] created a framework to facilitate the orderly and environmentally responsible exploration and extraction of oil and gas deposits on the OCS. It charges the Secretary of the Interior with preparing a program every five years containing a schedule of proposed leases for OCS resource exploration and development.”).
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
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, 551 U.S. at 157. Of course, the presence of a contractual relationship (here, a lease) is an important distinction. But we are skeptical that the willingness to lease federal property or mineral rights to a private entity for the entity’s own commercial purposes, without more, could ever be characterized as the type of assistance that is required to trigger the government-contractor analogy. See, e.g., Bd. of Cty. Comm’rs v. Suncor Energy (U.S.A.) Inc., 405 F. Supp. 3d 947, 977 (D. Colo. 2019) (“At most, the leases appear to represent arms-length commercial transactions whereby ExxonMobil agreed to certain terms (that are not in issue in this case) in exchange for the right to use government-owned land for their own commercial purposes.”), appeal docketed, No. 19-1330 (10th Cir. Sept. 9, 2019).
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”
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, 860 F.3d at 257–58; see also
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., 388 F. Supp. 3d at 568–69. Specifically, the
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 simultaneous promotion of their unrestrained use—that allegedly drove consumption, and thus greenhouse gas pollution, and thus climate change.10
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 in finding that
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.
3.
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 in any event.
a.
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., 545 F.2d 624, 626–27 (9th Cir. 1976).11
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,”
These negotiations ultimately resulted in the 1944 Unit Plan Contract (“UPC”).12 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 (a) a ceiling of 25,000,000 barrels or one-third of Standard’s total share, whichever was less, and (b) 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.
b.
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.” Reply Br. 18 (second alteration in original); 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,” Reply Br. 18–19 (first quoting J.A. 250, § 4(b); then citing J.A. 250–51, §§ 4(b), 5(d)(1)).
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
At 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,”
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, 71 Fed. Cl. at 244–45. Standard, and later Chevron as a successor, “continued its interest in the joint operation” of the Reserve until 1997. J.A. 214.
c.
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
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 pp. 23–26. Accordingly, the district court was correct in concluding that the UPC cannot support federal officer removal in this case.
IV.
For the foregoing reasons, we affirm the district court’s order granting Baltimore’s motion to remand.
AFFIRMED