Oil giants set to skirt state court in Louisiana pollution dispute

WASHINGTON (CN) - The Supreme Court looked likely on Monday to draw state courts out of Louisiana parishes' lawsuit against oil companies over World War II-era pollution. 

Chevron and Exxon said a federal court should decide whether they're liable for damage to the state's coastlines that occurred while producing aviation fuel under government contracts.

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 argues its extraction of crude oil related to its government contracts for fuel during World War II. As such, the oil companies insist they qualify for the statute, which would put the cases before a federal judge instead of a potentially unfavorable state court. 

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. 

The justices seemed to agree, but the high court was wary of creating an expansive new rule favoring government contractors. 

"'Relating to' is very broad, but it's hard to see where you stop," Chief Justice John Roberts, a George W. Bush appointee, noting a potential butterfly effect. "You know, the butterfly flaps its wings and it has the end result halfway around the world." 

Like Roberts, Justices Elena Kagan and Sonia Sotomayor, both Barack Obama appointees, worried that Chevron's "relating to" standard was too broad. They also quibbled with the suggestion that the statute applied to any person 'assisting' the federal government. 

"Isn't that going to be true of any government contractor?" Kagan asked. "Presumably, a federal contractor is doing something that the federal government needs. So if you enjoin the federal contractor, you're going to be impairing the operations of the federal government." 

Supporting the oil giants, the federal government argued that the close link between oil production and refining was enough to satisfy the standard. Again, the justices appeared convinced that the government's rule was too loose. 

"The Big Bang is 'related to' you being here today, counsel," Justice Neil Gorsuch, a Donald Trump appointee, quipped to the government's lawyer. 

Justice Brett Kavanaugh, another Trump appointee, expressed concerns about defining a rule that was too narrow, however. He cited an amicus brief warning that limiting the statute's reach would adversely impact national security by discouraging private parties from taking direction from federal officers for fear of future liability. 

To assuage the court's concerns, Chevron suggested limiting its standard to the World War II context. 

"How many times can we do that?" Roberts asked, appearing skeptical of pushing off a more widely applicable rule. 

Plaquemines and Cameron parishes sued the oil companies under Louisiana's State and Local Coastal Resources Management Act in 2013. Under the state statute, oil companies were required to ensure their areas of operation were "cleared, revegetated, detoxified and otherwise restored" to their best effort. 

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

"There is no argument that but for the avgas refining contracts, they would not have engaged in, for example, dumping produced water from oil wells into the marsh," Benjamin Aguinaga, Louisiana's solicitor general, said. 

Justice Amy Coney Barrett, a Trump appointee, asked about the remaining factual disputes between the parishes and oil companies. She said remand might be appropriate to address those and other lingering disputes. 

Justice Samuel Alito, a George W. Bush appointee, issued a belated recusal from the case last week because he has a financial interest in a parent company that is connected to the case. 

Source: Courthouse News Service

More Baton Rouge News

Access More

Sign up for Baton Rouge News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!