The Supreme Court on Friday made it easier for companies to move lawsuits from state to federal court when their conduct is tied to federal work — siding with Chevron and other oil companies in a long-running dispute with Louisiana parishes over coastal erosion linked to decades of drilling activity in the state.
The court ruled 8-0, with Justice Samuel Alito not participating, that Chevron met the legal standard to “remove” the case from state to federal court because the challenged conduct bears a meaningful connection to its work for the federal government.
The ruling, which centers on lawsuits filed against Chevron by the Plaquemines and Cameron parishes, stands to impact dozens of similar lawsuits filed in the state since 2013, which seek billions of dollars in damages from Chevron and other oil companies accused of violating Louisiana’s State and Local Coastal Resources Management Act.
A Louisiana jury last April determined Chevron to be liable for more than $744 million in damages to Plaquemines Parish, underscoring the high-dollar nature of many of the lawsuits.
SUPREME COURT SIGNALS IT MAY LIMIT KEY VOTING RIGHTS ACT RULE
The lawsuits have accused Chevron and other oil and gas companies of failing to adhere to provisions of the state law that require them to clean, detoxify and restore their drilling sites, in violation of the State and Local Coastal Resources Management Act law.
Chevron, backed by the Trump administration, had argued to the high court that the lawsuits belong in federal court because its oil production in the state was tied, in part, to its wartime role refining crude oil into aviation fuel for the U.S. military.
The high court agreed. Writing for the majority, Justice Clarence Thomas said Congress has long allowed federal contractors and others “acting under” federal authority to shift cases into federal court when the claims relate to that work.
“Chevron’s case fits comfortably within the ordinary meaning of a suit ‘relating to’ the performance of federal duties,” he said Friday.
TRUMP ATTENDS SUPREME COURT AS JUSTICES WEIGH BIRTHRIGHT CITIZENSHIP ORDER IN HIGH-STAKES TEST
The high court’s ruling lowers the bar for companies to shift cases from state to federal court — which defendants often view as a more favorable venue, as long as the claims are not too remote and bear a “meaningful connection” to federal work — and so long as the connection to federal activity is not “tenuous, remote, or peripheral.”
The Supreme Court ruling vacated an earlier ruling from the U.S. Court of Appeals for the Fifth Circuit, which sided with a lower court in ruling that the matter belonged in the state court, and kicked it back down to the lower court for review.
The outcome marks a significant procedural win for Chevron. It also stands to have broader knock-down effects for other oil and gas majors facing similar environmental and climate-related lawsuits.