Maryland Shuts Down Climate-Change Litigation

Photo by Seth Hoffman on Unsplash

Last month, the Supreme Court of Maryland affirmed dismissal of all claims in lawsuits brought by Baltimore, Annapolis, and Anne Arundel County against 26 oil and gas companies alleging that the companies actively deceived the public about the reality and dangers of climate change. The case reached the U.S. Supreme Court in 2021 before being remanded to state court. In Mayor & City Council of Baltimore v. B.P. P.L.C., Maryland’s high court held that the local governments’ state-law claims were displaced by federal common law and the Clean Air Act; it also held that all the claims failed as a matter of state law. The decision conflicts with recent decisions from the Hawaii and Colorado Supreme Courts in similar cases—but that conflict may soon be resolved, as the U.S. Supreme Court has granted certiorari to review the Colorado decision next Term.

The Local Governments’ Allegations

The allegations in the three complaints brought by Baltimore, Annapolis, and Anne Arundel County are similar: the local governments contend that the defendants have known that their products would cause climate change for half a century but nonetheless actively sought to hide that information and purposefully misled the public about the dangers of climate change. As a result, the local governments have suffered from rising sea levels; increased coastal erosion and damage from storm surges; more frequent and severe droughts, floods, and heat waves; and associated social and economic injuries.

By the time the case reached the Maryland Supreme Court—after what that court termed “an extended detour through the federal courts arising from the oil and gas companies’ unsuccessful attempts at removal”—it had been narrowed to five state-law claims: public nuisance, private nuisance, strict liability for failure to warn, negligent failure to warn, and trespass.

The “Extended Detour” Through Federal Courts

Baltimore filed the first of the three lawsuits in 2018. In removing that case to federal court, the defendants asserted (in the words of the federal district judge) “the proverbial ‘laundry list’ of grounds for removal”: federal common law, embedded federal questions, complete preemption, federal officer removal, and several more. The federal judge rejected all of the defendants’ arguments and remanded the case to state court. Typically remand orders are not appealable, but the federal officer removal statute (28 U.S.C. § 1442) is an exception.

On appeal, the Fourth Circuit rejected the defendants’ arguments that they satisfied the requirements for federal officer removal. (The defendants had pointed to one defendant’s fuel supply agreement with the Navy, another defendant’s joint operation with the Navy of a strategic petroleum reserve in California, and some defendants’ use of oil and gas leases administered by the Secretary of the Interior.) The court also held that it did not have jurisdiction to consider any of the defendants’ other arguments for removal.

The defendants appealed that latter determination, and in BP P.L.C. v. Mayor & City Council of Baltimore (2021), the U.S. Supreme Court agreed with them: when defendants exercise their statutory right to appeal a rejection of federal officer removal, they can also obtain review of all other potential bases for removal. As Justice Sotomayor noted in her dissent, that holding significantly expands defendants’ access to appellate review of remand decisions and “will reward defendants for raising strained theories of removal under § 1442.” On remand, the Fourth Circuit agreed with the district court’s rejection of the other asserted bases for removal, sending the case back to state court.

When Annapolis and Anne Arundel filed their lawsuits in 2021, the defendants again removed the cases to federal court, raising the same “laundry list” of grounds for removal. The federal judge rejected them all and ordered the cases remanded, and the Fourth Circuit affirmed on appeal.

Back in the Maryland courts, the defendants moved to dismiss the complaints, which judges in Baltimore City and Anne Arundel County granted. When the plaintiffs appealed, the cases were consolidated, and the parties agreed to bypass the appellate court in favor of immediate review by the Supreme Court of Maryland.

The Maryland Supreme Court’s Decision

First, the Supreme Court of Maryland held that federal common law governs claims for interstate pollution and thus displaces the local governments’ state law claims. In doing so, the court rejected the plaintiffs’ framing of their complaints as only alleging deception in communications with Maryland consumers; at root, the court explained, the local governments were seeking to hold the defendants accountable for global conduct causing global harm. The federal common law of interstate pollution has, in turn, been displaced by the Clean Air Act. While the Clean Air Act does provide for a residual role for state law, the court explained, it permits liability only under the law of the source state. Characterizing the local governments’ claims as seeking to apply state law to out-of-state sources of pollution, the court held those claims barred by federal law.

Second, the court concluded that even if the governments could bring a federal common law claim for nuisance, recognizing such a claim would impermissibly encroach on the foreign policy prerogatives of the political branches. Along the way, the court determined that the Clean Air Act does not rebut the presumption against extraterritoriality, and it emphasized “the need for judicial caution in the face of delicate foreign policy considerations” invoked in the U.S. Supreme Court’s Alien Tort Statute cases.

Third, the court held that the claims also failed as a matter of state law. Those determinations all turned, at root, on the court’s characterizations of the plaintiffs’ claims as really targeting global conduct and alleging injuries indistinguishable from global harms.

A Split Across State High Courts

As the Maryland high court noted, its decision conflicts with recent decisions by the supreme courts of Hawaii and Colorado that refused to dismiss similar claims against oil and gas companies. Those courts were more willing to accept plaintiffs’ framing of their complaints as based on misrepresentations to consumers and localities within the state. They were also more skeptical of vague assertions of foreign policy concerns. Indeed, the Maryland court engaged in what I would call foreign policy handwaving, mixing together the federal presumption against extraterritoriality, concerns about the Alien Tort Statute, and general invocations of the federal interest in controlling foreign policy. But while the Maryland court could not point to a specific doctrine that actually requires displacing state law based on such foreign policy concerns, that may well change now that the U.S. Supreme Court has granted certiorari in the Colorado case to consider whether federal law does preclude state law claims regarding climate change.

Conclusion

Two last thoughts related to climate change litigation before the U.S. Supreme Court:

First, the Court may not be able to reach the merits of the Colorado case because the Colorado high court’s decision was not a final judgment in that case (as required by 28 U.S.C. § 1257). The Maryland decision may thus be a better vehicle for the Supreme Court, but that would require (1) the plaintiffs to seek Supreme Court review and (2) the Supreme Court to conclude that the Maryland court’s holding that the claims fail as a matter of state law not to be an independent and adequate state grounds for that decision.

Second, the Supreme Court heard oral argument last month in another case involving the oil and gas industry and judicial federalism: Enbridge Energy v. Nessel. Multiple Justices expressed worry from the bench that Michigan state courts would not adequately consider federal interests or apply federal and treaty law correctly in evaluating Michigan’s efforts to shut down Enbridge’s pipeline across the Straits of Mackinac. Perhaps the Maryland decision can serve to reassure the Justices that state courts will not always side with state and local governments when it comes to environmental litigation.