On Monday, the Supreme Court will hear oral argument in a case that may seem technical on the surface but has the potential to significantly affect the relationship between federal and state courts and the ongoing litigation warfare against the energy sector. In Chevron USA v. Plaquemines Parish, the justices will consider whether companies that fulfilled critical federal contracts during World War II can defend themselves in federal court when state and local governments sue under a law passed decades after the oil and gas production took place.
This case emerges from a wave of more than forty lawsuits filed by Louisiana parishes against oil and gas companies, seeking billions in damages for environmental harm alleged to have resulted from their production of crude oil along the coast that dates as far back as World War II. The claims were asserted in state court under Louisiana permitting requirements for exploration and production of oil, gas, and other minerals in designated coastal zones that took effect in 1980. The controlling statute’s grandfather clause stated that coastal use permits were not required for “[i]ndividual specific uses legally commenced or established prior to the effective date of the coastal use permit program,” which should conclusively resolve these cases as the challenged drilling was from before 1980. But intrepid trial lawyers have tried to evade this bar on retroactivity with the stunning argument that drilling in support of contracts with the U.S. government during World War II was not “legally commenced” because the wartime efforts involved faster than normal oil extraction.
This was a transparent attempt to reap billions of dollars in damages from “state courts that are friendly—and sometimes beholden—to the plaintiffs’ bar,” as an amicus brief submitted by former attorneys general William Barr and Michael Mukasey bluntly observed. The companies being sued unsurprisingly removed the cases to federal court, citing principally a federal-officer removal statute. That law, 28 U.S.C. § 1442, allows civil actions and criminal prosecutions against “any person acting under [an] officer” of the United States “for or relating to any act under color of such office” to be removed to federal court. Congress had actually amended the officer removal statute in 2011 to expand removable cases from those that were only “for” an act under color of federal office to those that were “for or relating to” such actions. The Supreme Court will now consider how expansive or narrow the “relating to” language is.
A Fifth Circuit panel agreed that the companies met the “acting under” requirement of the statute since they had World War II–era federal contracts to produce aviation gasoline (avgas). But the judges divided on the “relating to” prong. The contracts at issue did not include any provisions specifically pertaining to crude production. Yet crude is an essential ingredient of avgas, and the companies produced crude in order to meet their contractual obligations. In the absence of specific contractual language, that was not sufficient for the majority, which remanded to the state court, but Judge Andy Oldham disagreed. He noted in dissent the plain language of the removal statute, which, given the necessity of crude production to avgas production, clearly made his the more natural interpretation of the text. Oldham bolstered that interpretation with a survey of the expanding application of the federal-officer removal laws over the course of two centuries, with Congress clearly broadening federal court access for those acting under federal authority in its 2011 amendments. It should have helped that the Supreme Court has recognized the broad ordinary meaning of the phrase “relating to.” But the Fifth Circuit narrowly denied a petition for rehearing en banc by a 7–6 vote, so it is now up to the high court to reverse the panel’s mistake.
Beyond the question of statutory interpretation, this case is the product of a litigation campaign with all the hallmarks of the coordinated lawfare strategy in recent years that has weaponized state courts to extract massive payments from energy companies across multiple states. The driving force behind the Louisiana cases is John Carmouche, a trial lawyer who has cultivated close ties with key Louisiana Republicans, including Governor Jeff Landry and Attorney General Elizabeth Murrill, both of whom have supported the parishes’ litigation. Landry appointed Carmouche to Louisiana State University’s board of supervisors. Carmouche’s firm contributed significantly to Landry’s gubernatorial campaign and also donated to re-elect Michael Clement, the state trial court judge who handled a Plaquemines Parish case that resulted in a $744.6 million jury verdict against Chevron last year.
The strategy exploits home court advantage in rural parishes. Faced with the temptation to impose retroactive liability for coastal erosion upon deep-pocketed corporations, it is hard to find neutral factfinders among local judges and juries. A paramount reason federal officer removal exists is to protect those acting under federal authority from potential bias in state courts. And while the state seems to be preoccupied with the potential windfall it could get in state court, its litigation strategy undermines Louisiana’s best interests. Energy companies will think twice before investing there and in other states where politically connected trial lawyers can impose billions in liability for decades-old operations that were not only lawful but essential to national defense. The Supreme Court’s intervention is critical to combating the weaponization of state courts by activists who hope to achieve through litigation what they cannot achieve through legislation.