Chevron tries to dodge $745 million verdict over Louisiana coastline damage

The energy giant argues a recent Supreme Court decision shows the case belongs in federal court, not state court.(CN) — Chevron maintained on Wednesday before a Fifth Circuit panel that lawsuits by Louisiana and its various parishes accusing it of decades of coastline damage from oil drilling belong in federal court, not state court.In its effort to undo a Louisiana jury’s $745 million verdict, Chevron argues that a recent U.S. Supreme Court ruling in a related case brought by Plaquemines Parish — the same parish now at issue — shows that this case belongs in federal court.Chevron says part of the claims relate to oil drilling during World War II, when its predecessor, the Texas Company, contracted with the federal government to refine aviation fuel for the war effort.The high court ruled in April the Texas Company’s oil drilling activities were sufficiently related to its contract with the federal government to support removal under the federal officer removal statute.Louisiana Solicitor General Benjamin Aguiñaga told the panel that while the oilfield at issue in the Supreme Court case had been designated by the federal government as “a critical field essential to the war,” Chevron hasn’t provided any evidence that “a single drop of oil” from the field at issue in this case was used to make aviation fuel.The two sides also debated whether Chevron met a removal statute requirement to show a “colorable federal defense.”Louisiana and the parish argue Chevron’s asserted federal defenses don’t directly relate to its work for the federal government, but Chevron’s attorney, Paul Clement, said that isn’t necessary, accusing the other side of trying to manufacture a “junior varsity” nexus requirement.“The Supreme Court, I think, emphatically said the relating-to prong is where you do the nexus analysis in federal officer removal,” Clement said.Chief U.S. Circuit Judge Jennifer Walker Elrod asked why the panel shouldn’t simply remand the case to the lower federal court that originally sent the case back to state court and let that court rule on how the Supreme Court’s decision affects the case.Clement said it would be better for the panel to dispose of the issue itself to avoid having the case “ping pong” between different courts.“I think the thing that is most respectful, actually, of the state court is to make it clear now, and to allow this case to proceed in federal court,” he said, noting the Fifth Circuit previously rejected similar claims against an energy company in a New Orleans lawsuit.Clement said that at the very least the panel should remand the case to the lower court while also vacating the lower court’s remand decision. He said the court needs to take action before Sept. 3, when the state court is scheduled to finalize the judgment against Chevron.Elrod, a George W. Bush appointee, questioned why the Sept. 3 date matters so much.“If you think it was nunc pro tunc, what difference does it make whether it’s final or not?” the George W. Bush appointee asked.“With all due respect, like, do you really want another two years of litigation over whether there was some special res judicata effect to the judgment becoming final?” Clement said.But Aguiñaga disagreed that vacating the remand order would automatically divest the state court of jurisdiction.“You have to rely on comity and hope that another court will basically acquiesce in your request for the case to come back,” he said.Aguiñaga and Clement also debated whether Chevron’s participation in the state trial waived its argument that the case belongs in federal court.“We’re forced against our will to litigate in state court,” Clement said. “Like, it can’t be that at that point we have to choose between actually trying to defend ourselves in state court and continuing to prosecute our ongoing right to federal jurisdiction.”Clement said Chevron told the state court that a trial might be a waste of time if the U.S. Supreme Court were to grant cert in the Chevron case.But Elrod suggested that might not be enough, saying that telling the judge that a trial might be a waste of time isn’t the same as telling them that they are exceeding their authority.“The judge gets to decide whether it’s wasting their time to try a particular case or not,” Elrod said.U.S. Circuit Judge Andrew Oldham, a Donald Trump appointee, and Senior U.S. Circuit Judge Edith Brown Clement, a George W. Bush appointee, joined Elrod on the panel. The judges took the case under submission without indicating when they would rule.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads