Justices give oil giants federal channel around coastline pollution dispute 

WASHINGTON (CN) — In a boon for oil companies, the Supreme Court ruled Friday that a World War II-era pollution suit from Louisiana parishes should be heard by a federal court.

The parishes sued Chevron and Exxon in state court for damages to Louisiana’s coastlines. The state is divided into parishes rather than counties.

Under the federal officer removal statute, federal courts have jurisdiction over civil actions against any officer of the United States for their official duties. Chevron argued its extraction of crude oil is related to its government contracts for fuel during World War II. As such, the oil companies insisted they qualify for the statute, which would put the cases before a federal judge instead of a potentially unfavorable state court.

The justices agreed in a unanimous decision because the damage occurred while producing aviation fuel under government contracts.

“Chevron’s case fits comfortably within the ordinary meaning of a suit ‘relating to’ the performance of federal duties,” Justice Clarence Thomas, a George H.W. Bush appointee, wrote for the court. “Chevron has plausibly alleged a close relationship between its challenged conduct and the performance of its federal duties — not a tenuous, remote or peripheral one.”

Plaquemines and Cameron parishes sued the oil companies under Louisiana’s State and Local Coastal Resources Management Act. Under the state statute, oil companies are required to ensure their areas of operation were “cleared, revegetated, detoxified and otherwise restored” to their best effort.

The parishes say dumping billions of gallons of contaminated water along Louisiana’s coastline was not part of Chevron’s government contract or the broader war effort.

A state court issued a $744 million judgment against Chevron for just one parish, but a federal court ruled in the oil giant’s favor. Because the case concerns issues of national importance, Chevron said it needed to be litigated in a forum that respects federal authority. The company also said federal courts provide procedural benefits.

Thomas said the oil companies needed to show their actions related to and were specifically required by the federal contracts. He noted the government’s statements about the importance of Chevron’s crude-oil production in the war effort.

“In this all-hands-on-deck, wartime context, Chevron needed to produce more crude oil as quickly as possible to facilitate more avgas refining, including its own,” Thomas wrote, using a term for aviation fuel. “Chevron has therefore satisfied the ‘relating to’ requirement. This suit implicates acts by Chevron that are closely connected to the performance of its federal duties.”

Justice Ketanji Brown Jackson, a Joe Biden appointee, only joined the court’s judgment, disagreeing with Thomas’ reasoning. Jackson said there needed to be a direct connection between the challenged conduct and the federal contract, instead of the indirect link supported by Thomas.

“In my view, the statute demands more,” Jackson wrote. “Understood in the context of its statutory and legislative history, §1442(a)(1) requires a causal nexus between the targeted conduct and the federal duties.”

Jackson said Chevron satisfied the requirement, noting the government pushed refiners to produce more aviation gas and the oil in Louisiana’s fields was particularly well-suited for it.

“Chevron therefore produced crude oil, at least in part, to meet the demands of its federal contracts — satisfying the causal-nexus requirement,” Jackson wrote.

Justice Samuel Alito, a George W. Bush appointee, issued a belated recusal ahead of oral arguments because he has a financial interest in a parent company that is connected to the case.

Chevron celebrated the ruling and said it looked forward to the next steps in the litigation.

“Chevron applauds the Supreme Court’s unanimous judgment recognizing that these lawsuits belong in federal court,” a spokesperson for the company said in a statement. “As the court recognized, the plaintiffs’ claims are related to activities that Chevron and other energy companies performed under federal supervision during World War II.  Those claims are flawed as a matter of both state law and federal law, and Chevron looks forward to litigating these cases in federal court, where they belong.”

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