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Biden Judge Rejects Corporations’ Efforts to Remove Fraud and Global Warming Cases Away from State Court

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News & Analysis

Judge Toby Heytens, nominated by President Biden to the Fourth Circuit court of appeals, wrote a unanimous decision rejecting attempts by BP and 20 other energy corporations to remove away from state courts several cases charging them with fraud in connection with their use of fossil fuels and global warming. The February 2024 decision was in Anne Arundel County v BP PLC.

What is the background of this case?                             

Two Maryland municipalities (Annapolis and Anne Arundel County) sued BP and twenty other energy companies in state court, charging them with violating state consumer protection and other laws. The complaints contended that the corporations had misrepresented and concealed information about their use of fossil fuels and their effect on climate change. As with similar lawsuits elsewhere, the cases sought damages and equitable relief against the  corporations, including requiring them to pursue “less hazardous alternative products.”

Seeking delay as well as what they perceived as more hospitable forums, the companies removed the lawsuits to federal court, claiming that they involve federal questions. Following earlier precedent, the district court disagreed and sent the cases back to state court. The corporations appealed to the Fourth Circuit.

How Did Judge Heytens and the Fourth Circuit Rule and Why Is It Important?

Judge Heytens wrote a unanimous decision upholding the district court so that the cases would go forward in state court. Heytens noted that similar removal efforts by energy corporations had failed in at least ten previous cases, and despite several new arguments, the “eleventh time is not the charm.”

Specifically, Judge Heytens explained that in order to sustain the removal of a case from state to federal court under the “federal officer” removal law, a party must show that it has a “colorable federal defense” to the claim and that there is a connection between the wrongful misconduct  being charged and a federal officer. After careful analysis, Heytens concluded that the “companies failed to show any of their alleged wrongful activities were carried out for or in relation to federal authority.” Because the “activities cited by the companies involve fossil fuel production rather than concealment or misrepresentation of information about fossil fuel products,” Heytens continued, “those activities fail to show the required relatedness.”

In accord with other courts, Heytens also rejected the corporations’ claim that the cases belong in federal court because the corporations intend to raise First Amendment defenses to misrepresentation claims. It is “not enough” that a defense in a lawsuit raises federal questions, he explained; instead, a “disputed question of federal law” must be a “necessary element” of a plaintiff’s state law claims, which was not the case here.

Judge Heytens’ decision was obviously important to the efforts of Anne Arundel County and Annapolis to get justice for the corporate misconduct they raised in their complaints. The ruling is also important in evaluating other efforts by corporations and others to move cases away from state court in the future, especially in the Fourth Circuit, which includes Maryland, Virginia, Wesr Virginia, and North and South Carolina.  The decision is also a reminder of the importance of promptly confirming fair-minded nominees like Judge Heytens to our federal courts.