The Supreme Court justices on Monday heard arguments in a lawsuit seeking to hold oil companies liable for environmental damage to Louisiana’s coastline.
The argument focused on a narrow question — whether the oil companies can remove cases over the damage from state to federal court — but the stakes are high.
Local officials in Louisiana have filed more than 40 related lawsuits seeking potentially billions of dollars in damages. The officials blame the oil companies for environmental damage to the Louisiana coast from decades of oil and gas production. They argue that the companies engaged in illegal activity, by drilling, dredging and engaging in waste disposal without proper permits. Those actions, state officials argue, have contributed to extensive coastal erosion.
Federal court is seen as a friendlier venue for the oil companies. If the justices allow the companies to move their cases there, it could have implications for other climate change-related lawsuits. Such lawsuits have increased in recent years as states and local governments face increasing challenges with how to pay for environmental damage. Oil companies have argued they pose a threat to the country’s energy security.
Justice Brett M. Kavanaugh pressed the lawyer for a coalition of major oil companies, Paul D. Clement, about why they have sought to move the lawsuits out of state courts in local parishes, which are similar to counties.
“There seems to be a concern about the fairness of the state court system that underlies your position in this case,” Justice Kavanaugh said. “What is that concern?”
Mr. Clement responded that a judgment issued in federal court would be more broadly accepted. If the plaintiffs can prove their case in federal court, then “everybody’s going to accept the outcome” and the decision would not be viewed “as something that’s a product of local prejudice.”
He cited examples where national policies have been locally unpopular, making it potentially difficult for the companies to get a fair trial with a local jury. Last April, a jury in Plaquemines Parish, the state’s southernmost parish, found Chevron Corporation liable for about $745 million for damage to the state’s coastal wetlands.
Lawyers for Louisiana have fought to keep the cases in state courts.
Louisiana’s solicitor general, J. Benjamin Aguiñaga, said state courts were best suited to judge whether the underlying law, a Louisiana environmental statute, had been violated.
“We have the same reasons for wanting to be in state court that anybody who sues under state law wants to be in state court,” Mr. Aguiñaga told the justices. “We want the actual experts interpreting state law, especially when we get to the Louisiana Supreme Court on an important statute like this, and especially with respect to a problem that is so sweeping in scope.”
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The argument, which lasted more than an hour, was muted. Justice Samuel A. Alito Jr., who is often active in arguments and typically asks lively hypotheticals, recused himself from the case just days before the argument. He cited his financial ties to one of the companies involved in the dispute, ConocoPhillips, the parent corporation of Burlington Resources Oil and Gas Company. Although that company had withdrawn from the Supreme Court petition, it remained a party in federal court, according to a letter from the court clerk.
The question of whether the oil companies can successfully get the cases into federal court hinges on what’s known as the federal officer removal statute. This law gives federal courts jurisdiction over civil cases that concern the actions of federal officials or those acting under the orders of a federal official.
The oil companies argue the law applies in this matter because of World War II-era fuel-supply contracts. The Trump administration has joined the case in support of the oil companies.
A federal trial court rejected the companies’ argument, finding that they had failed to show their oil removal was done under the orders of a federal officer.
A divided panel of judges from the U.S. Court of Appeals for the Fifth Circuit then upheld the lower court’s decision, blocking the companies from moving cases to federal court.
Unlike the trial court, the judges found that the oil companies had been operating under federal officials at the time of the World War II oil extraction. But a majority concluded that the oil companies failed to show that actions the jury said caused environmental damage were related to the company’s World War II-era fuel contracts.
Mr. Aguiñaga urged the justices to uphold that decision. He asserted that it was “an easy case,” that the oil companies had “dumped billions of gallons of produced water from oil wells directly into our marsh” and that it was “a massive deal for the state of Louisiana.”
Mr. Clement pushed back aggressively on this idea, telling the justices that it was clear the oil companies had worked in support of the country’s war, both on the battlefield and on “the home front.”
He called the war context of the oil company contracts “critical,” adding that the companies were fueling munitions factories, among other industries.
He added that “if we are going to get in a big debate about exactly what happened in World War II,” that debate should happen in federal court.
Abbie VanSickle covers the United States Supreme Court for The Times. She is a lawyer and has an extensive background in investigative reporting.
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