City of Oakland v. BP Pub. Ltd. Co. - 960 F.3d 570 (9th Cir. 2020)

Rule:

The U.S. Supreme Court has not yet determined that there is a federal common law of public nuisance relating to interstate pollution, and the United States Court of Appeals for the Ninth Circuit has held that federal public-nuisance claims aimed at imposing liability on energy producers for acting in concert to create, contribute to, and maintain global warming and conspiring to mislead the public about the science of global warming, are displaced by the Clean Air Act.

Facts:

The City of Oakland and the City and County of San Francisco filed complaints in California state court asserting a California public-nuisance claim against five energy companies arising from the role of fossil fuel products in global warming. The complaints sought an order of abatement requiring the energy companies to fund a climate change adaptation program for the cities. The energy companies removed the complaints to federal court, identifying seven grounds for subject-matter jurisdiction, including that the cities' public-nuisance claim was governed by federal common law. The district court denied the cities' motion to remand the cases to state court, holding that it had federal-question jurisdiction under 28 U.S.C. § 1331 because the cities' claim was "necessarily governed by federal common law." The cities amended their complaints to include a federal nuisance claim. The district court dismissed for failure to state a claim, and it dismissed four defendants for lack of personal jurisdiction.

Issue:

1. Did the cities’ public nuisance claim arise under federal law for purposes of 28 U.S.C. § 1331?
2. By amending their complaint, did the cities cure any subject-matter jurisdiction defect?

Answer:

1) No. 2) Yes.

Conclusion:

Considering the pleadings filed at the time of removal, the Court held that the state-law public-nuisance claim did not arise under federal law for purposes of § 1331. The Court explained that there was an exception to the well-pleaded complaint rule for a claim that arose under federal law because federal law was a necessary element of the claim - this exception applied when a federal issue was necessarily raised, actually disputed, substantial, and capable of resolution in federal court without disrupting the federal-state balance approved by Congress. The Court concluded that the said exception did not apply in the instant case because the state-law claim for public nuisance failed to raise a substantial federal question. A second exception, referred to as the "artful-pleading doctrine," allowed removal where federal law completely preempted a state-law claim. The Court concluded that the second exception did not apply in the case at bar because the state-law claim was not completely preempted by the Clean Air Act. Anent the second issue, the Court held that the cities cured any subject-matter jurisdiction defect by amending their complaints to assert a claim under federal common law. Thus, at the time the district court dismissed the cities' complaints, there was subject-matter jurisdiction. Nonetheless, the Court held that it could not affirm the district court's dismissals if there was not subject-matter jurisdiction at the time of removal. Accordingly, the Court remanded the cases to the district court to determine if there was an alternative basis for jurisdiction.