The U.S. Supreme Court agreed on Monday to wade into a legal controversy that has smoldered in the swamps and bayous of southern Louisiana since 2013, agreeing to grant a petition for certiorari filed jointly by major U.S. oil producers Chevron and ExxonMobil. The controversy at hand is whether lawsuits by Plaquemines and Cameron Parishes claiming coastal erosion damages belong in state or federal court.
Chemron lawyer Paul Clement was quoted by Reuters saying his company is "pleased that the Supreme Court has decided to grant review in these cases, and we look forward to presenting our arguments to the court."
The two cases featured in the petition are part of a larger array of similar lawsuits brought by various Louisiana local governments in recent years, as I wrote in February, are actively supported by the state government led by Governor Jeff Landry. Matter of fact, at least 43 such lawsuits have been filed by Louisiana parishes in partnership with prominent trial lawyers to sue oil and gas companies over questionable claims that their operations have caused coastal erosion issues south of the Mississippi River. The state's support of what amounts to a robust lawfare effort stands somewhat at odds with the Trump administration's American Energy Dominance agenda and the Landry administration's own goals to maintain a strong energy sector whose taxes and royalty payments help fund the state government.
Chemron contends that the Supreme Court's ultimate ruling will impact the full array of currently existing lawsuits on the coastal erosion issue. But Vic Marcello, a co-founder of Talbot, Carmouche, and Marcello firm which has played a leading role in organizing the litigation campaign, argues that it will only impact 11 of the cases that are classified as "refinery cases." These are cases which involve companies, like Chevron and ExxonMobil, which both produced and refined oil, in contrast to cases involving non-integrated companies whose business activities are more limited.
It's easy to understand why the plaintiffs and their lawyers want to keep these cases confined to state courts after a jury in the Plaquemines case returned an award in their favor of $745 million in April. The case was presided over judge Michael Clement, who the Wall Street Journal reports received at least $10,500 in campaign contributions from the PAC of the Talbot, Carmouche, and Marcello firm.
In their petition, Chevron and Exxon are asking the Supreme Court to rule on the proper interpretation of the federal officer removal statute, 28 U.S.C. §1442(a)(1), as amended in 2011. The companies contend that the Fifth Circuit Court of Appeals ruled incorrectly in 2020 and again in 2022 by remanding these cases to the state courts, given that the law allows civil actions "for or relating to any act under color of [federal] office," i.e., actions taken under federal direction, to be heard by federal courts.
The question of who, if anyone, should be held responsible for the coastal erosion issues impacting the south Louisiana region is both complex and controversial. Historically, the region itself was created by the natural flooding and silting processes of the Mississippi River, which flows across the breadth of the state before spilling into the Gulf of America.
But, as more and more people began to settle in the area, first the state and later the U.S. Army Corps of Engineers - starting in 1932 - mounted projects to build dikes and levees to control the mighty river's floods, thus interrupting nature's cycle. In a 2019 letter published in the Baton Rouge Advocate, Chip Kline, then the head of the Louisiana Coastal Protection and Restoration Authority (CPRA), note that the region had seen the loss of more than 2,000 square miles of land since that year, to a large extent due to these dikes and levees.
During World War II in the early 1940s, another factor came into play when the federal government led by President Franklin Roosevelt implemented a program to encourage oil and gas companies to actively drill for oil in the region. This was because the crude produced in the area was of ideal quality for the making of high-octane aviation gas, or "avgas" to fuel the air force needed to support the war effort. Achieving this crucial goal for the federal government required the oil and gas companies to construct a network of pipelines and canals which served to exacerbate the coastal erosion problem.
The questions before Supreme Court may seem like narrow jurisdictional matters, but the implications and impacts from case's outcome will be anything but that. A win for the plaintiffs, should it ultimately result in more big damage awards against the companies involved, would be a pyrrhic victory for the Landry administration, as it would no doubt dampen the enthusiasm among oil companies large and small for continuing to do business in the Bayou State.
From a federal standpoint, such a ruling would make it harder to gain willing cooperation of not just the oil industry but any industry for future programs of compelling national interest. It would become hard for the government to gain the willing buy-in from companies if they know their cooperation with a national imperative might ultimately subject them to ill-grounded lawfare campaigns seeking billions of dollars in damage awards.
Indeed, in an amicus brief filed in support of the companies before the Supreme court, retired Joint Chiefs of Staff Adm. Michael Mullen and Gen. Richard Myers warned that allowing this sort of lawfare effort to continue to be relegated to state courts "creates a serious risk that, in the future, private industry will not readily answer the federal government's call when the nation needs it most."
A ruling in favor of the companies to move these coastal erosion suits into the federal courts would protect not just the rights of the defendants, but also the interests of the national government, helping to preserve its ability to attract private contractor cooperation during future national emergencies. Perhaps ironically, such a ruling would also better align Louisiana's own posture towards what has traditionally been the state's main revenue-generating industry with that of the Trump administration and its rapidly shifting focus on federal energy policy.