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U.S. Supreme Court rules against Baltimore in procedural dispute over venue with oil and gas companies

A U.S. Supreme Court ruling will allow fossil fuel companies to continue arguing that the federal courts should hear the City of Baltimore’s lawsuit seeking to hold them accountable for concealing the impacts of climate change.

The energy companies have been fighting to move the 3-year-old suit, filed in state courts, to the federal courts, where experts say they might expect a more favorable ruling. The companies argue energy extraction is a federal issue and the consequences cross state lines.

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Baltimore’s mayor and City Council filed the suit in 2018 against 26 fossil fuel companies, arguing that it centered on deceptive trade practices and ecological harm done unto the city, including flooding and sea-level rise.

The Supreme Court ruled 7-1 on Monday, with one justice abstaining, that the 4th Circuit Court of Appeals must reconsider a plea from the fossil fuel companies to have the suit heard in federal court. That court earlier sided with Baltimore, sending the case back to state court.

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Environmental advocates worry the Supreme Court’s decision will deal a blow to local battles against climate change. The energy companies are hoping that the 4th Circuit, when required to consider all of their arguments, will send Baltimore’s suit to federal court, which they consider more receptive to dismissing the case altogether.

The ruling could have far-reaching implications, given that a number of similar lawsuits have been filed nationwide — from Annapolis to New York City.

Years ago, a lower court decision about the case’s venue couldn’t have been appealed to the 4th Circuit court. But exceptions to that rule have been added over time, including one created in 2011, which allows suits against federal officers or agencies to be heard in federal court.

That’s the exception that the oil companies relied on. They argued that some of the fossil fuel extraction at issue in the case took place at the federal government’s behest.

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In the Supreme Court’s majority opinion, Justice Neil Gorsuch wrote that the 4th Circuit erred when it evaluated only one argument in the companies’ appeal — the one about federal officers — rather than the entire thing.

In a statement, Sara Gross, chief of Baltimore’s affirmative litigation division, said her team remains optimistic the case will return to state court when reconsidered by the 4th Circuit.

“While this isn’t the outcome we wanted, we are fully confident that the City will prevail again when the remaining issues are considered by the Court of Appeals,” she said in a statement.

Chief Justice John Roberts and Justices Amy Coney Barrett, Stephen Breyer, Elena Kagan, Brett Kavanaugh and Clarence Thomas sided with the majority. Justice Sonia Sotomayor dissented, and Justice Samuel Alito abstained, since he owns stock in two of the companies sued by Baltimore. Some advocates had argued that Coney Barrett should do the same, since her father had worked as a top attorney for one of the companies.

The justices, however, did not hand the fossil fuel companies a total victory, given that they didn’t rule all similar suits should be heard in federal court.

In a statement, a spokesman for ExxonMobil, one of the parties to the suit, maintained the cases should be decided federally, but argued that they shouldn’t have been filed from the start.

“Lawsuits like these waste millions of dollars of taxpayer money and do nothing to advance meaningful actions that reduce the risks of climate change,” Exxon spokesman Casey Norton wrote in an email.

In the court’s opinion, Gorsuch also dismissed the city’s argument that allowing appeals so long as they contain mention of one issue would result in parties gaming the system.

Sotomayor was far more receptive to that argument, stating: “It lets the exception swallow the rule.”

“It allows defendants to bootstrap their entire case for removal into the court of appeals simply by tacking on an argument,” she wrote in her dissent.

Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, cheered the Supreme Court decision in a statement.

“Ad hoc rulings in local courtrooms around the country are not the proper way to address this important global challenge,” he wrote.

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