On May 26, 2020, the Ninth Circuit issued two related decisions in City of Oakland and County of San Mateo brought by California cities and counties against major oil and gas companies. Exclusively citing state law relating to, among other things, nuisance, negligence, and trespass, the California municipalities allege that the companies’ fossil fuel activities have substantially contributed to climate change and, in doing so, impermissibly caused public harm. The municipalities accordingly demand the companies reimburse their costs reacting to and preparing for the effects of climate change. At issue before the Ninth Circuit was whether these claims triggered the jurisdiction of federal courts. Answering this question in the negative, the court determined that the cases must proceed at the state level.

In City of Oakland, the Ninth Circuit rejected the lower court’s determination that federal courts have federal question jurisdiction over these types of challenges thanks to an embedded federal issue or the doctrine of “complete preemption.” According to the Ninth Circuit, nothing in federal law, including the Clean Air Act (CAA), preempted the state tort claims. Specifically, the court determined that the CAA provided sufficient discretion for state courts to consider these types of claims and did not include an equivalent cause of action that would preempt such claims. The court accordingly remanded the case back to the lower court for further consideration of its jurisdiction. In County of San Mateo, the court rejected arguments related to a similar fact pattern and affirmed the lower court’s remand of the case back to state court.

In a past case, the Supreme Court case prohibited similar tort claims under federal law, concluding they were displaced by the Environmental Protection Agency’s regulation of greenhouse gases pursuant to the CAA. American Electric Power Co. v. Connecticut, 564 U.S. 410 (2011). The case, however, notably did not address the availability of state tort claims. Although the recent Ninth Circuit decisions do not speak to the merit of these claims, they illustrate that state courts will be the likely venue for such disputes and, in doing so, set the stage for future litigation.

This issue has been receiving nationwide attention. Earlier this year, the Fourth Circuit reached a similar decision, and the First, Second, and Tenth Circuits are currently considering analogous cases. Depending on their result, the Supreme Court may review the issue to fill the hole left by American Electric Power Company. For more information on these decisions or their implications, please contact Randy Brogdon, Houston Shaner, or Rich Pepper.