Fed Panel: Delaware Suit Against Oil Industry Is State Issue

DOVER, Del. (AP) — A federal appeals court has ruled that a lawsuit filed by Delaware’s attorney general seeking to hold the petroleum industry responsible for climate change effects in the state must be heard in state court instead of federal court.

Wednesday's ruling by a three-judge panel also applies to a similar lawsuit filed by the city of Hoboken, New Jersey, against the fossil-fuel industry.

The lawsuits were filed in state courts but oil companies sought to move them to federal courts, arguing that they involved tort claims under federal law because they involved substantive federal issues and offshore oil production. The companies also argued that they were acting under federal officers in exploring and drilling for oil.

The Third Circuit panel, like four other circuit courts around the country, rejected those arguments and upheld district court rulings remanding the complaints to state courts in Delaware and New Jersey.

“Climate change is an important problem with national and global implications,” Judge Stephanos Bibas noted in writing the panel opinion. “But federal courts cannot hear cases just because they are important.”

Addressing specific arguments raised by the oil companies, Bibas said the lawsuits do not assert claims regarding actions that the oil companies were directed to take by federal officers. The companies based that argument on the fact that the federal government leases them offshore drilling rights, and that they have contributed oil to the Strategic Petroleum Reserve and have provided specialty fuels to the military.

“In their complaints, both Hoboken and Delaware insist that they are not suing over emissions caused by fuel provided to the federal government,” Bibas noted.

The court also determined that oil exploration and production on the Outer Continental Shelf, which could invoke federal jurisdiction, “is too many steps removed from the burning of fuels that causes climate change.”

“Most federal-question cases allege violations of the Constitution, federal statutes, or federal common law. But Delaware and Hoboken allege only the torts of nuisance, trespass, negligence (including negligent failure to warn), and misrepresentation, plus consumer-fraud violations, all under state law,” Bibas wrote.

The court said those state laws are not pre-empted by federal statutes, and it rejected the defendants’ arguments of pre-emption under federal common law.

A spokesman for Democratic Attorney General Kathleen Jennings said the Delaware Department of Justice agreed with the court’s “clear and unanimous opinion.”

Jennings announced in September 2020 that the state was suing Exxon, Chevron, BP, the American Petroleum Institute and 27 other defendants, saying they are responsible for “decades of deception about the role their products play in causing climate change.”

The complaint alleges that the defendants are responsible for causing and accelerating climate change that has had “devastating economic and public health impacts” on the state. Those alleged harms include sea level rise resulting in flooding, saltwater intrusion into groundwater, and threats to infrastructure, as well as coastal erosion, loss of wetlands, and an increase in “extreme weather events.”