You might know Plaquemines Parish, Louisiana, for ’60’s political boss-segregationist Leander Perez. or maybe for its role in launching Huey Long’s political career after the New Orleans city fathers blew a hole in the levee in order to save the Queen City from the 1927 flood. (The Kingfish would go on to terrorize out-of-state oil companies until he was assassinated in 1935. You can still see marks from the shots that missed in the marble walls of the state capitol building.)
Now, the parish that separates New Orleans from the Gulf of MAGA is back in the news. Dozens of lawsuits against oil and gas companies under Louisiana’s State and Local Coastal Resources Management Act will be impacted by Chevron USA v. Plaquemines Parish, Louisiana, SLCRMA creates a cause of action against parties that use Louisiana’s coastal zone without required permits. Louisiana parishes allege that the companies’ operations have caused extensive land loss and damage to Louisiana’s coastal wetlands. The decision broadens the scope of federal officer removal available to private contractors.
The exemptions
SLCRMA’s grandfather clause exempts from the permitting requirement specific uses legally commenced or established prior to the 1980 effective date of the program. The 2018 “Rozel expert report” opined that certain of Chevron’s pre-1980 oil production activities were not lawfully commenced because they did not comply with prudent industry practices at the time, thus denying those companies (to-wit Chevron) the exemption and placing WWII-era conduct at issue. Examples of the challenges to Chevron’s production activities are failure to use steel tanks instead of earthen pits, its use of vertical-drilling methods, and use of canals instead of roads.
Federal officer removal
The federal officer removal statute authorizes removal to federal district court of any civil action or criminal prosecution commenced in state court against “any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office.” In interpreting the statute the Court held that Chevron’s World War II-era crude oil production in Plaquemines Parish’s coastal zone “related to” Chevron’s performance of its federal contract to refine aviation gasoline for the U.S. military during that time, thereby satisfying the “for or relating to” requirement of the statute.
After Chevron removed the case, the federal district court (and its Western District counterpart in Cameron Parish v. Apache) granted the parishes’ motion to remand, ruling that even though Chevron and other vertically-integrated companies had federal avgas refining contracts, those contacts said nothing about how defendants were to obtain crude oil. They could purchase it on the open market, for example. Thus, crude oil production activities were not sufficiently “connected or associated with” the refining activities.
The Fifth Circuit consolidated the appeals and affirmed, holding that the “connected or associated with” element was not met for two principal reasons.
- The refining contracts gave defendants complete latitude to forego producing any crude and instead buy it on the open market, so crude production was not directed by the contract, and
- The Petroleum Administration for War’s (PAW) crude oil allocation system—under which the federal government, not the companies, determined which refineries received which crude—severed any connection between Chevron’s production and its refining operations.
The “relating to” standard
The Supreme Court read “relating to” broadly, to mean “to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with”. The Court noted that one thing can relate to another even if the connection is “indirect”; even if it was “not specifically designed to affect” the other; and even without a “strict causal relationship”. A removing defendant need not show that its federal duties specifically required or strictly caused the challenged conduct. The Fifth Circuit’s approach was too narrow.
In finding that the parish’s suit was closely connected to Chevron’s wartime activities, the Court rejected both of the Fifth Circuit’s principal grounds for affirming the remand.
- The ordinary meaning of “relating to” does not requrre that the defendant show that his federal duties specifically invited his conduce, and
- An act can relate to its consequences even when the causal chain includes actions by intermediaries.
Plaquemines argued that removal requires the defendant to have been “acting under” a federal officer in taking the specific actions challenged in the suit. The Court rejected this as inconsistent with the statutory text.
The Supreme Court vacated the judgment and remanded the case for further proceedings. Whether the Rozel report carries the day is not the issue at this stage. That question will be resolved in federal court and not the (defendants likely assume) home-town friendly state court just down the river.