(The Center Square) − A closely watched Louisiana wetlands case that could help secure billions of dollars for the state’s coast is on the U.S. Supreme Court’s agenda next week.
The question before justices in Chevron v. Plaquemines is whether Chevron can remove the lawsuit from state court to federal court if they are sued over actions connected to federal contracts?
Louisiana disputes the premise entirely, arguing the case against Chevron has nothing to do with a federal contract.
“There is no federal contract that this arises under,” Louisiana Attorney General Liz Murrill said in an interview. “Hard stop – we win.”
There were indeed federal contracts between the U.S. government and Texaco, later acquired by Chevron, to refine aviation gasoline for the war effort during World War II. But those were purchase agreements, not directives, Louisiana argues – deals that didn’t tell Texaco where to drill, how to operate in Louisiana’s coastal zone or to engage in the conduct the parish is now suing over decades later.
“They just said, ‘We’ll buy it from you,’” Murrill said from Washington, D.C., where she is preparing for Monday’s arguments. “You can get it from anybody you want, and we will buy it from you.”
Murrill’s point is that a procurement contract like that doesn’t make all of a company’s operations federally directed. World War II ended in 1945, she noted, while Plaquemines Parish’s claims center on activities that continued for decades afterward and, in the state’s view, violated Louisiana’s coastal permitting law adopted in 1979.
Chevron, however, will argue that the distinction doesn’t matter. The company says the federal-officer removal statute is intentionally broad — allowing not only federal officers but also private contractors “acting under” them to move cases to federal court when the claims are “for or relating to” work done under federal authority.
The companies say the parishes’ claims over oil-field production are intertwined with the refining that supplied the federal war effort, and that both activities were closely linked and federally supervised during World War II – enough to justify federal jurisdiction.
Meanwhile, Louisiana’s coastal parishes have filed more than 40 similar lawsuits over the past decade, alleging that oil-and-gas operations contributed to the state’s catastrophic land loss. In the first case to reach a jury, Plaquemines Parish won a verdict of about $744.6 million against Chevron.
The companies say those kinds of local verdicts are precisely why Congress created a path to federal court. Supporters argue that allowing such suits to remain in local venues risks bias in favor of local governments with massive sums on the line. Murrill said the total exposure across all the cases is “definitely in the multi-billions.”
Industry supporters warn that if the Supreme Court upholds Louisiana’s position, contractors could hesitate to take on federally directed work for fear of being exposed to local lawsuits decades later. “The question,” said former Justice Department attorney Mike Fragoso, “is whether contractors will keep doing federally directed work if they are exposed to this kind of tort liability down the line.”
The U.S. Solicitor General has sided with Chevron and other companies, requesting and receiving 10 minutes of argument time.
Fragoso pointed out that the case is ultimately about federal supremacy: even though states are sovereigns, the federal government is supreme, and contractors doing the federal government’s work shouldn’t be forced to defend that work in local courts. Fragoso invoked Chief Justice John Marshall’s warning that “the power to tax is the power to destroy,” arguing that the power to hit federal contractors with massive local verdicts can be an even more potent way to undermine federal operations.
“I think that it’s convenient for them to say that,” Murrill said, noting her reputation as a virulent defender of the energy industry. “All the regulations and laws that we have effect now have not inhibited our ability to conduct warfare.”
