Updated from May 18, 2021 post.

On May 17, 2021, the United States Supreme Court issued a decision in the climate change litigation affecting the fossil fuel industry. In a 7-1 decision (Justice Alito recused), the Court held that an appellate court must consider all grounds for removal when an appeal is taken pursuant to 28 U.S.C. § 1447(d), a provision that specifically authorizes interlocutory appeal of an order remanding a case removed pursuant to the federal officer removal statute.

Although the Court addressed this issue arising out of the City of Baltimore’s lawsuit against several energy companies, the decision likely will have impacts in the more than 20 pending climate-related cases. In the City of Baltimore’s case, the City asserted several state-law causes of action centered on the alleged misleading promotion, and failure to warn about the dangers of, fossil-fuel products.

The energy companies removed Baltimore’s case to federal court asserting several bases for federal court jurisdiction, one of which was federal officer jurisdiction. The defendant energy companies contended that, during specific points in time, their energy production activities were at the behest and were under the control of the federal government. Therefore, 28 U.S.C. § 1442(a)(1) allowed them, as federal officers, to remove the case to federal court.  Notably, the energy companies asserted other grounds for removal such as federal jurisdiction under the federal question statute (28 U.S.C. § 1332), the Outer Continental Shelf Lands Act (92 Stat. 657, 43 U.S.C. § 1349(b)), the admiralty jurisdiction statute (28 U.S.C. § 1333), and the bankruptcy removal statute (28 U.S.C. § 1452).

Once the case was removed to federal court, the City of Baltimore filed a motion to remand. The district court examined each of the grounds for removal asserted by the energy companies and determined that none of the grounds could support federal court jurisdiction. The energy companies appealed the district court’s remand order to the Fourth Circuit Court of Appeals pursuant to 28 U.S.C. § 1447(d).

Section 1447, which governs general post-removal procedure, contains two clauses relevant to appellate review of remand orders: the non-reviewability clause and the exceptions clause. The non-reviewability clause states that “[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal . . .” The United States Supreme Court has interpreted this language narrowly as prohibiting review only if a remand order was issued based on a ground enumerated in § 1447(c), which includes lack of subject-matter jurisdiction. The exceptions clause states that the non-reviewability clause holds true “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.” Several Courts of Appeals, including the Fourth Circuit, interpreted the exceptions clause as providing the court authority to review a district court’s remand order only to the extent that the order addresses the statutory sections listed in the clause (i.e., §§ 1442 or 1443). The only ground for removal asserted by the defendant energy companies, as listed in Sections 1442 or 1443, was federal officer jurisdiction. The Fourth Circuit held, in the City of Baltimore’s climate change case, that the grounds for federal officer jurisdiction were insufficient to support removal and no other grounds asserted by the defendant energy companies could be reviewed by the court.

The United State Supreme Court disagreed, holding the plain language of 28 U.S.C. § 1447(d) grants the courts of appeals jurisdiction over the entire order remanding a case back to state court.  Justice Gorsuch, writing for the majority, explained that the ordinary meaning of the term “order” includes all parts of the document issuing the district court’s command. “From this it would seem to follow that, when a district court’s removal order rejects all of the defendants’ grounds for removal, §1447(d) authorizes a court of appeals to review each and every one of them.” The Court acknowledged that § 1447(d) limits which orders are reviewable by the appellate court, but noted that of those reviewable orders, the entire order is reviewable. The most analogous prior decision by the Court is Yamaha Motor Corporation, U.S.A. v. Calhoun, 516 U.S. 199 (1996), which answered a similar question about a different statute. In Yamaha, the Court analyzed 28 U.S.C. § 1292(b)—allowing “a district court to certify ‘an order’ to the court of appeals if it involves a controlling question of law as to which there is substantial ground for difference of opinion”—and specifically considered whether appellate courts could review any question contained in a district court’s order or whether it could only consider the “controlling question of law” that the district court certified for further review. There, like here, the Supreme Court held that an appellate court was not limited to reviewing certain parts of the district court’s order; rather, the entire order is appealable and reviewable.

While the Supreme Court’s opinion settles the issue as to the scope of appellate review, it remains to be decided whether the climate change cases will remain in federal court. This is because the Supreme Court did not opine on the merits of the defendants’ grounds for removal.  Instead, the Court remanded the case back to the Fourth Circuit to review the district court’s order on the remaining grounds for removal. Thus, the companies will await that decision which will determine whether the case can remain in federal court.

UPDATE.  Following and in line with its decision last week, on May 24, 2021, the United States Supreme Court summarily vacated and remanded appellate court decisions in three pending climate change cases.  Specifically, the Court vacated and remanded the city of Boulder, Colorado’s suit to the Tenth Circuit, various California cities’ suits to the Ninth Circuit, and the state of Rhode Island’s suit to the First Circuit.  The respective appellate courts must now reconsider the appeals of the remand orders in light of the Court’s recent opinion in the City of Baltimore case.

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