Plaquemines Parish, et al v. Chevron et al has characteristics of the many pending climate-change suits brought by governments in state courts against Big Oil, which Big Oil tries to remove federal court. In this case the question was whether the producers were acting under federal officers’ control when they ramped up oil production during World War II. Removal failed. The Fifth Circuit affirmed the District Court’s remand to state court.
The cause of action is for violation of the Louisiana State and Local Coastal Resources Management Act, enacted in 1980, which requires a party seeking to use coastal areas (in this case for oil and gas extraction) to obtain and comply with coastal use permits. The Act grandfathered uses that were legally commenced or established prior to the effective date of the permit program. Plaquemines alleges that the producers’ operations dating back to the 1940’s were not lawfully commenced or established because of they departed from prudent industry practice and thus were not begun in good faith. Therefore, it is alleged, the pre-1980 operations were not grandfathered and the producers can be liable under the Act for environmental damage (primarily, degradation of the coastal marshes) resulting from permit violations from 1980 onward.
In the producers’ telling, the history of the federal government‘s oversight, conscription, and vertical integration of the oil industry during World War II justifies federal jurisdiction because the producers’ acted under federal officers by increasing oil output to help fuel the war effort. They also clim to have served as federal contractors or subcontractors to refineries with government contracts and thus were contractually directed by federal officers to perform the activities for which they are now being sued. The courts found no federal contract or subcontract and refused to infer the existence of subcontracts on the basis of the producers’ buyer-supplier relationships with government-contracted refineries.
The burden was on the producers to show that federal jurisdiction exists and removal was proper. The Fifth Circuit concluded that the producers failed to meet their burden that they had asserted a colorable federal defense that they acted pursuant to federal officers’ or agencies’ directions and the charged conduct is connected or associated with an act pursuant to the federal officers’ directions. If there is no contract, then evidence of any payment, employer employee relationship, or principal-agent arrangement could indicate the requisite delegation of legal authority to act on the government’s behalf. But there was insufficient evidence of such relationships.
The producers also alleged an unusually close and special relationship with the federal government during the war and that they were essential suppliers for refineries that were contractually obligated to deliver to the government, which made them contractors. But merely being subject to federal regulations is not enough to bring a private action within federal officer removal jurisdiction. Merely complying with the law does not suffice.
The producers’ further argued that they were obliged as federal subcontractors to prioritize fulfillment of governmental defense orders. That was denied. No documents evidenced such a subcontract, and supply relationships do not create subcontractor relationships. The producers did not show that they were subjected to the federal government’s guidance or control as subcontractors.
This is only one of 42 such cases, and leads the way for all 42 to return to the parish whence they came.
And at least one has settled.