(The Center Square) – The U.S. Supreme Court, in an 8-0 decision Friday, sent back a state court ruling in favor of oil companies Chevron and ExxonMobil seeking millions of dollars for decades of oil production in Louisiana.
Chevron will now be able to appeal the state verdict in federal court.
The case, Chevron v. Plaquemines Parish, questions to what extent a state court can litigate against an oil company for its production of oil even if it is for federal purposes.
The litigation challenges activities of the oil company dating back to World War II in some cases. After a trial in state court, a jury had awarded Plaquemines Parish a $745 million verdict for coastal damages caused by oil production. But lawyers for Chevron argued that the company was adhering to federal oil production requirements during wartime and the lawsuit belonged in federal court.
“Chevron “act[ed] under federal officers when it performed its refining duties,” Justice Clarence Thomas wrote in the court’s majority opinion.
The court’s justices said state courts cannot pursue litigation against federal entities or companies that contracted under those entities.
“Chevron’s federal contracts can be a but-for cause of the challenged crude-oil production without specifically directing that production,” Thomas wrote.
All justices on the court agreed that the state court was not the proper venue for the litigation of the case, allowing Chevron to move the case to federal court, a potentially friendlier venue.
“The case arises from a broader campaign of woke lawfare in which activists and municipal governments seek to use courtrooms to determine what companies are allowed to produce and what consumers can buy,” O.H Skinner, executive director of Alliance for Consumers, said.
Justice Ketanji Brown Jackson concurred in the judgment but disagreed that federal provisions separate conduct in a lawsuit from an indirect relationship with a federal contractor or entity.
Justice Samuel Alito recused himself from the case.
