District of Columbia v. Exxon Mobil Corp.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DISTRICT OF COLUMBIA,
Plaintiff,
v. Civil Action No. 20-1932 (TJK)
EXXON MOBIL CORPORATION et al.,
Defendants.
MEMORANDUM OPINION
The District of Columbia sued Defendants, a group of energy companies, for violating a
District of Columbia consumer protection law. The District alleges, among other things, that De-
fendants knowingly misrepresented the effects of fossil fuel products to consumers within the Dis-
trict through misleading advertisements and biased scientific studies. Defendants removed the
case to federal court, invoking seven bases for the Court’s subject-matter jurisdiction. The District
of Columbia moved to remand to Superior Court, and Defendants opposed. For the following
reasons, the Court will grant the District’s motion to remand.
Background
The District of Columbia (“the District”) sued Exxon Mobil, BP, Chevron, Shell Oil, and
relevant subsidiaries (“Defendants”) in District of Columbia Superior Court for alleged violations
of the D.C. Consumer Protection Procedures Act (“the Act”). ECF No. 1-14 at 6. According to
the District, Defendants have known about the harmful effects of fossil fuels for decades yet have
misrepresented those effects and “promoted disinformation” to District of Columbia consumers.
Id. at 36. The complaint alleges, for example, that Defendants “funded and controlled” scientists
to manipulate public perception on fossil fuels and embarked on “misleading” advertising cam-
paigns in the Washington Post and elsewhere to deceive the public about the effects of fossil fuels
on the environment. See, e.g., id. at 41–42. The District also alleges that Defendants’ violations
of the Act are ongoing, and that Defendants have now “turned their attention to misleading con-
sumers about their level of investment in cleaner energy sources.” Id. at 53. According to the
complaint, Defendants have undertaken “greenwashing campaigns,” in which they promote their
investment in “alternative energy sources” but intentionally overstate their commitment to non-
fossil fuels. See, e.g., id. at 58. According to the District, Defendants’ actions have caused “exis-
tential” environmental injuries—such as rising temperatures and sea levels—which cause “damage
[to] critical infrastructure and property,” “heat waves,” “flooding,” and other “extreme weather.”
ECF No. 1-14 at 52–53.
The District claims that each Defendant and its subsidiary violated the Act by “engaging
in a number of deceptive acts and practices in its marketing, promotion, and sale of fossil fuel
products.” ECF No. 1-14 at 77, 80, 82, 84–86. For relief, the District seeks an order enjoining
Defendants from violating the Act. It also seeks civil penalties, restitution, and damages as pro-
vided by the Act. Id. at 86–87; see D.C. Code § 28-3909.
Exxon removed the case to this Court, ECF No. 1, and the other defendants consented,
ECF No. 8, 12, 16. In the notice of removal, Defendants claimed that removal is proper because
(1) the claims arise under federal common law; (2) the lawsuit raises disputed and substantial
federal issues under Grable; (3) the action arises out of federal enclaves; (4) the Federal Officer
Removal statute applies; (5) the Outer Continental Shelf Lands Act applies; (6) diversity jurisdic-
tion exists; and (7) the Class Action Fairness Act applies. ECF No. 1 at 11–12. The District moved
to remand, ECF No. 45, and Defendants opposed, ECF No. 51. Since then, the parties have pep-
pered the docket with notices of supplemental authority. See, e.g., ECF Nos. 66, 68, 71, 74, 77,
78, 82, 84, 87, 89, 91, 93, 97, 103, 107, 108, 112, 114.
2
Legal Standard
Federal courts are courts of limited jurisdiction and “possess only that power authorized
by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552
(2005). Thus, “[a] civil action filed in state court may only be removed to a United States district
court if the case could originally have been brought in federal court.” Nat’l Consumers League v.
Flowers Bakeries, LLC, 36 F. Supp. 3d 26, 30 (D.D.C. 2014) (citing 28 U.S.C. § 1441(a)). “When
a plaintiff files a motion to remand, the removing defendant bears the burden of proving that re-
moval was proper.” Arenivar v. Manganaro Midatlantic, LLC, 317 F. Supp. 3d 362, 367 (D.D.C.
2018) (internal quotation marks omitted). “If at any time before final judgment it appears that the
district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447.
“Any doubts about the existence of subject matter jurisdiction are to be resolved in favor of re-
mand.” Witte v. Gen. Nutrition Corp., 104 F. Supp. 3d 1, 3 (D.D.C. 2015) (cleaned up).
Analysis
Defendants raise seven theories for the Court’s subject-matter jurisdiction. Each, they say,
is an independent ground for removal. None is.
A. Federal Common Law Does Not Confer Jurisdiction Over the District’s
Claims
Defendants argue that the suit must be heard in federal court because the District’s claims
implicate interstate pollution, the navigable waters of the United States, and foreign affairs, and
therefore its consumer protection claims “necessarily” arise under federal common law. In other
words, even though the District did not plead a federal claim, Defendants say that the Court has
jurisdiction because claims “may arise under federal common law regardless of whether a plaintiff
affixes a federal law label.” ECF No. 51 at 29. In response, the District argues that federal com-
mon law does not apply to its state consumer protection claims, but even if it did, it cannot support
3
removal because the federal question must appear on the face of their well-pleaded complaint, and
complete preemption does not apply. ECF No. 63 at 18–19.
For Defendants to demonstrate federal-question jurisdiction on federal common law
grounds, they must first show that federal common law applies to the District’s false-advertising
claims or that the Court should fashion a new federal common law rule. Defendants come up well
short on this first step.
The Court has original jurisdiction over “all civil actions arising under the Constitution,
laws, or treaties of the United States.” 28 U.S.C. § 1331. “There is, of course, ‘no federal general
common law.’” Texas Indus., Inc. v. Radcliff Materials, 451 U.S. 630, 640 (1981) (quoting Erie
R.R. Co. v. Tomkins, 304 U.S. 64, 78 (1938)). But the Supreme Court has recognized “few and
restricted” areas of federal common law to protect “uniquely federal interests.” Id. Federal courts
should tread lightly in this area, however, because “whether latent federal power should be exer-
cised to displace state law is primarily a decision for Congress.” Atherton v. FDIC, 519 U.S. 213,
218 (1997) (cleaned up). In the rare instance when a federal court creates such a rule, it must
ensure two things. First, the state law or claim must affect “uniquely federal interests.” Boyle v.
United Techs. Corp., 487 U.S. 500, 504 (1988). Second, there must be “significant conflict” be-
tween the federal interests and state law. 1 Id. at 507.
1
Defendants argue that this test for creating federal common law does not apply and that the
Court has jurisdiction if “plaintiff has stated a viable federal claim.” ECF No. 51 at 29. In sup-
port, they cite only a case from the First Circuit, United States v. Swiss Am. Bank, Ltd., 191 F.3d
30, 42–45 (1st Cir. 1999), but that case is inapt. There, the plaintiff brought asset forfeiture
claims in federal court based on federal common law theories. Id. at 42. Thus, state law was not
in the picture, and the court only had to address whether the plaintiff had a cognizable claim un-
der federal common law. The court did not address the dispositive question here: whether there
is “significant conflict” between a state law claim and federal interests such that the state law
claim cannot exist.
4
Defendants use almost all their opposition to argue that the District’s claims “implicate”
three uniquely federal interests: interstate pollution, the navigable waters of the United States, and
foreign affairs. Fair enough. 2 But even so, their argument fails because they have not shown a
“significant conflict” between the District’s claims under the Act and a federal interest they iden-
tify. See O’Melveny & Myers v. FDIC, 512 U.S. 79, 88 (1994) (failing to show “significant con-
flict” is “fatal” to federal common law argument). Simply put, they do not engage with this prong
of the federal common law test. See, e.g., ECF No. 51 at 29 (arguing only that the District’s claims
“implicate” federal interests). They do not, for example, sufficiently describe actual conflict be-
tween the Act’s protections against misleading advertising and federal interests in regulating
“transboundary pollution.” Nor do they explain how the District’s false-advertising claims conflict
with federal interests in regulating the navigable waters or in foreign affairs. Defendants do not
even use the phrase “significant conflict” in their opposition. Several courts have found this short-
coming dispositive, and the Court agrees with their reasoning. See, e.g., Mayor and City Council
v. BP P.L.C., 31 F.4th 178, 202 (4th Cir. 2022) (defendants’ failure to establish significant conflict
“substantively precludes the creation of federal common law”); Rhode Island v. Shell Oil Prods.
Co., LLC, 35 F.4th 44, 54–56 (1st Cir. 2022) (explaining that defendants do not “adequately de-
scribe” the significant conflict between federal interests and the state law claims).
The closest Defendants come to identifying any such conflict is by reference to a case in
the Southern District of New York. There, the court granted the defendants’ motion to dismiss
under Rule 12(b)(6) and held that New York City’s nuisance claims could not proceed under state
2
The Court assumes, without deciding, that Defendants have identified “uniquely federal inter-
ests” to satisfy the first part of the federal common law test. See Mayor and City Council v. BP
P.L.C., 31 F.4th 178, 202 (4th Cir. 2022); Rhode Island v. Shell Oil Prods. Co., LLC, 35 F.4th
44, 54 (1st Cir. 2022).
5
law because federal common law preempted them. See City of New York v. BP P.L.C., 325 F.
Supp. 3d 466, 471 (S.D.N.Y. 2018), aff’d sub nom. City of New York v. Chevron Corp., 993 F.3d
81 (2d Cir. 2021). But that case has limited relevance here; it involved an ordinary preemption
defense at the motion-to-dismiss stage. The case was also brought in federal court, so removal
was not at issue. Thus, the trial court never considered whether federal common law completely
preempted any state law pollution claims and justified removal of a state-law claim. The Second
Circuit recognized the importance of this procedural posture in its affirmance, explaining that it
was considering the “preemption defense on its own terms, not under the heightened standard
unique to the removability inquiry.” City of New York v. Chevron Corp., 993 F.3d at 94 (emphasis
added). In any event, Defendants do not explain how that case shows “significant conflict” be-
tween the District’s false advertising claims and the federal interests they identify, nor do they
engage in the extensive analysis the Supreme Court has undertaken in its past cases to determine
whether significant conflict exists. See, e.g., Atherton, 519 U.S. at 216–19; Boyle, 487 U.S. at511–12. On this score, the Court is aligned with at least three courts of appeals. 3 See BP P.L.C.,
31 F.4th at 202–03; Shell Oil, 35 F.4th at 55; Bd. of Cnty. Comm’rs. v. Suncor Energy (U.S.A.)
3
Defendants also seek to rely on American Electric Power Co. v. Connecticut (“AEP”), 564 U.S.
410 (2011), to support their argument that federal common law governing “transboundary pollu-
tion” claims governs the District’s claims, see ECF No. 51 at 31–32. That case does not help them.
In AEP, the plaintiffs asserted nuisance claims under federal common law in federal court, and the
Supreme Court held that Congress had displaced the federal common law in this area with the
Clean Air Act. See AEP, 564 U.S. at 424. Under AEP, it is unclear how the District’s claims could
arise under federal common law in this area if those “federal law claim[s] [have] been deemed
displaced, extinguished, and rendered null by the Supreme Court.” BP P.L.C., 31 F.4th at 206.
The Court cannot find that the District’s claims arise under federal common law “based on a non-
existent theory of federal common law when its viability is ‘no longer open to discussion.’” BP
P.L.C., 31 F.4th at 207 (quoting Hagans v. Levine, 415 U.S. 528, 537 (1974)).
6
Inc., 25 F.4th 1238, 1262 (10th Cir. 2022). Federal common law does not apply to the District’s
claims.
Even if federal common law applied here, though, Defendants hit another roadblock: the
well-pleaded complaint rule, which limits federal-question jurisdiction. The rule mandates that
“the federal question must appear on the face of a well-pleaded complaint and may not enter in
anticipation of a defense.” Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 494 (1983).
The rule applies both to the Court’s original jurisdiction and a defendant’s ability to remove a case
on federal-question grounds under 28 U.S.C. § 1441. See Franchise Tax Bd. v. Constr. Laborers
Vacation Tr. for S. Cal., 463 U.S. 1, 10 n.9 (1983). The plaintiff is therefore the “master of the
claim” and may “avoid federal jurisdiction by exclusive reliance on state law” when drafting its
complaint. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Federal-question jurisdiction
does not exist if defendants raise a defense rooted in federal law. See, e.g., Aetna Health Inc. v.
Davila, 542 U.S. 200, 207 (2004).
Defendants argue that the well-pleaded complaint rule does not apply here. And indeed,
there are exceptions to this general rule. One is the doctrine of complete preemption. Sometimes,
a “federal statute completely preempts the state law cause of action,” and the claim, “even if
pleaded in terms of state law, is in reality based on federal law.” Beneficial Nat. Bank v. Anderson,
539 U.S. 1, 8 (2003). Federal courts therefore have jurisdiction over that claim because “the
preemptive force of [the] statute is so extraordinary that it converts an ordinary state-law complaint
into one stating a federal claim for purposes of the well-pleaded complaint rule.” Caterpillar, 482
U.S. at 493. This scenario is rare; the Supreme Court has recognized complete preemption in the
cases of only three federal statutes. See Beneficial, 539 U.S. at 6–11. Complete preemption differs
from ordinary preemption, which is a defense that “forecloses a plaintiff from stating a legally
7
cognizable claim for recovery” based on state law. Sickle v. Torres Advanced Enter. Sols., LLC,
884 F.3d 338, 345 (D.C. Cir. 2018). An ordinary preemption defense does not create federal-
question jurisdiction. See Caterpillar, 482 U.S. at 398–99.
Defendants say that “federal common law exclusively governs claims for interstate and
international pollution because the Constitution dictates that ‘state law cannot be used.’” ECF No.
51 at 38 (quoting City of Milwaukee v. Illinois and Michigan, 451 U.S. 304, 314 n.7 (1981)).
Although Defendants skillfully avoid using the term “complete preemption,” they effectively ar-
gue for a “new form of complete preemption”—mandated by the Constitution, they say—rooted
in federal common law. City of Hoboken v. Chevron Corp., 45 F.4th 699, 707 (3d Cir. 2022).
True, as described above, complete preemption is an exception to the well-pleaded complaint rule.
But the Supreme Court has only recognized complete preemption in the context of federal statutes.
See City of Hoboken, 45 F.4th at 707. And even then, the Supreme Court has recognized it only
three times. See id. Defendants furnish no authority suggesting that the federal common law can
“transform” a state law claim into a federal one. Caterpillar, 482 U.S. at 399. This is unsurprising,
given that complete preemption requires a “clear and manifest purpose” from Congress—some-
thing unavailable from a judge-made federal common law rule. City of Milwaukee, 451 U.S. at
316. Two courts of appeals have ended similar removal inquiries there, and the Court finds that
reasoning persuasive as well. See City of Hoboken, 45 F.4th at 708 (“So because [the defendants]
have no statute, they have no removal jurisdiction either.”); Suncor, 25 F.4th at 1262 (“[B]ecause
the federal common law does not completely preempt state law, removal is not warranted . . . .”).
Of course, Defendants may eventually invoke a preemption defense when challenging the merits
of the District’s claim. But the Court is aware of no authority holding that the existence of a federal
common law claim completely preempts any state law claim on that topic and “transform[s]” any
8
state claim into a federal one, “thereby selecting the forum in which the claim shall be litigated.”
Caterpillar, 482 U.S. at 399.
B. Removal is Improper Under Grable
Defendants contend that removal is proper because the District’s claims necessarily raise
a disputed and substantial federal question under Grable. ECF No. 51 at 39. Grable says that in
rare circumstances, federal-question jurisdiction exists even if a complaint fails the well-pleaded
complaint rule. Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 313–14
(2005)). Under this doctrine, “federal jurisdiction over a state law claim will lie if a federal issue
is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in
federal court without disrupting the federal-state balance approved by Congress.” Gunn v. Minton,
568 U.S. 251, 258 (2013). Because exercising this jurisdiction approaches “the outer reaches of
§ 1331,” Merrell Dow Pharm. v. Thompson, 478 U.S. 804, 810 (1986), the Supreme Court has
repeatedly characterized the cases satisfying this test as a “slim category,” Gunn, 568 U.S. at 258;
Empire Healthchoice Assurance., Inc. v. McVeigh, 547 U.S. 677, 701 (2006).
For a federal issue to be “necessarily raised,” it must be an “essential element” of the state-
law claim. D.C. Ass’n of Chartered Pub. Schools v. District of Columbia, 930 F.3d 487, 491 (D.C.
Cir. 2019) (quoting Grable, 545 U.S. at 315). Courts exercising Grable jurisdiction identify a
precise federal issue and explain why that issue is necessary to resolve the state law claim. See,
e.g., Grable, 545 U.S. at 310 (state law quiet-title suit requiring interpretation of Internal Revenue
Code’s notice requirement); Gunn, 568 U.S. at 259 (state legal-malpractice claim required appli-
cation of federal patent law); Bender v. Jordan, 623 F.3d 1128, 1130–31 (D.C. Cir. 2010) (state
breach-of-contract claim required interpretation of federal regulation); District of Columbia v. Grp.
Hosp. and Med. Servs., 576 F. Supp. 2d 51, 54–55 (D.D.C. 2008) (state-law claims required de-
termination whether defendants violated their congressional charter).
9
Nothing similar is present here. In sum, Defendants have identified no disputed federal
issue necessary to resolve the District’s consumer protection claims. 4 They argue that the Dis-
trict’s “theory of deception” implicates a slew of federal interests, including the federal govern-
ment’s regulatory framework on climate issues, national policies balancing energy production with
environmental protection, and foreign affairs. ECF No. 51 at 40–43. Even so, Defendants merely
explain purported benefits of federal jurisdiction; they do not point to any “nearly pure question
of federal law” necessary to adjudicate the District’s claims. Bender, 623 F.3d at 145. For exam-
ple, Defendants cite the Clean Air Act and other federal regulations to argue that “Congress has
already weighed the costs and benefits of fossil fuels” and thus it is “essential” that the District’s
claims are resolved in federal court. ECF No. 51 at 42. They similarly contend that allowing the
District to proceed in state court would “disrupt the principles of federalism.” Id. at 47. But the
District’s claims under the Act—that Defendants misled consumers about the effects of fossil
fuels—can be adjudicated without a court resolving any questions of federal law. Defendants may
raise these federalism concerns as a preemption defense later, but such a defense does not create
federal-question jurisdiction. See Suncor, 25 F.4th at 1266.
Other courts have declined to exercise Grable jurisdiction in similar circumstances. See
Shell Oil, 35 F.4th at 56–57; BP P.L.C., 31 F.4th at 208–215; Suncor, 25 F.4th at 1267. Simply
put, Defendants identify no question involving any federal statute, regulation, or other federal issue
necessarily raised for the District to prevail under the Act, and “speaking about federal law or
federal concerns in the most generalized way is not enough for Grable purposes.” Shell Oil, 35
4
The District’s claims under the Act require that Defendants misrepresent goods or services to
consumers within the District; misrepresent a material fact that has a tendency to mislead; or fail
to state a material fact if that failure tends to mislead. See D.C. Code § 28-3904(a), (e), (f).
10
F.4th at 57. The Court therefore finds that Grable jurisdiction does not lie, and removal is not
proper on that ground. 5
C. The Court Does Not Have Federal Enclave Jurisdiction
Defendants argue that some of Defendants’ alleged unlawful conduct occurred within fed-
eral enclaves—including military installations such as Fort Lesley J. McNair, and monuments and
parks controlled by the National Park Service—and therefore the Court has exclusive jurisdiction
over the District’s claims under the Constitution. ECF No. 51 at 47. They also argue that by
“targeting” Defendants’ oil and gas operations, the District’s claims “necessarily sweep[ ] in those
operations that occur on military bases and other federal enclaves.” Id. at 48.
The Constitution authorizes Congress “[t]o exercise exclusive Legislation in all Cases
whatsoever . . . over all Places purchased . . . for the Erection of Forts, Magazines, Arsenals,
Dock-Yards, and other needful Buildings.” U.S. Const. art. I, § 8, cl. 17. Known as the “Enclave
Clause,” courts have “generally read [the clause] to establish federal subject matter jurisdiction
over tort claims occurring on federal enclaves . . . even when applying state law.” Jograj v. Enter.
Servs., LLC, 270 F. Supp. 3d 10, 16 (D.D.C. 2017). In other words, “federal law applies to a legal
controversy arising on federal enclaves” and “a court has jurisdiction over such a claim under
§ 1331.” Cnty. of San Mateo v. Chevron Corp., 32 F.4th 733, 749 (9th Cir. 2022). Exclusive
federal jurisdiction remains “unless reserved or authorized by Congress.” Thomas v. Securiguard
Inc., 412 F. Supp. 3d 62, 74 (D.D.C. 2019) (citing Goodyear Atomic Corp. v. Miller, 486 U.S. 174,
181 (1988)).
5
Defendants must satisfy “all four” requirements under Grable to establish federal-question ju-
risdiction on this theory. Gunn, 568 U.S. at 258. Because Defendants fail on prong one, the
Court need not address the other three. See, e.g., Shell Oil, 35 F.4th at 56.
11
The question here is whether the Enclave Clause confers federal jurisdiction when some of
the pertinent activity occurred on a federal enclave but some did not. 6 Neither party cites any
binding authority on this question, and another court in this District has characterized the law in
this area as “not entirely settled.” Jograj, 270 F. Supp. 3d at 16; see City of Roseville v. Norton,
219 F. Supp. 2d 130, 150 (D.D.C. 2002) (“There is scarce case law interpreting the enclaves
clause.”). But several courts of appeals addressing the question in analogous litigation have held
that federal enclave jurisdiction requires “that all pertinent events take place on a federal enclave.”
Suncor, 25 F.4th at 1271 (cleaned up); see BP P.L.C., 31 F.4th at 217–19; Shell Oil, 35 F.4th at
58; see also Cnty. of San Mateo, 32 F.4th at 750 (finding that connection between alleged conduct
and federal enclaves “too attenuated and remote” to establish subject-matter jurisdiction). Con-
sistent with this principle, the Supreme Court has held that Indian reservations are federal enclaves
only with respect to conduct that happened wholly within the reservation. See Nevada v. Hicks,
533 U.S. 353, 361–62, 365 (1990) (holding that jurisdiction under Enclaves Clause only lies for
“on-reservation conduct involving only Indians” and that “State sovereignty does not end at a res-
ervation’s border”). Courts in this District have similarly considered the question of federal-en-
clave jurisdiction only when the relevant conduct or injury occurred entirely within a purported
federal enclave. See, e.g., Youssef, 2021 WL 3722742, at *11.
6
Defendants do not appear to argue that federal-enclave jurisdiction lies because the entire District
of Columbia itself is a federal enclave. See Youssef v. Embassy of the United Arab Emirates,
No. 17-cv-2638 (KBJ), 2021 WL 3722742, at * 11 (D.D.C. Aug. 23, 2021) (The “District of Co-
lumbia is neither a state nor a territory, but a federal enclave itself.” (cleaned up)). And there does
not appear to be any support for such a view. Although the District of Columbia is a federal
creation, Congress effectively delegated governance to local authorities through the Home Rule
Act of 1973. See United States v. Simmons, No. 18-cr-344 (EGS), 2022 WL 1302888, at *2
(D.D.C. May 2, 2022). Thus, unlike in the case of a state and a federal enclave within its bounda-
ries, in general, “the federal enclave doctrine does not apply to limit the applicability of D.C. laws
with respect to entities located in the District.” See Youssef, 2021 WL 3722742, at * 11.
12
That is not the case here. The District alleges that Defendants’ false advertising affected
consumers across the District of Columbia. See, e.g., ECF No. 1-14 at 29. It also alleges that the
resulting injures—a cascade of environmental harms—occurred throughout the District of Colum-
bia. See ECF No. 1-14 at 11–12. Again, Defendants seem to concede that the District’s allegations
pertain to activity across the District of Columbia, even if some of that activity happened in a
federal enclave. And Defendants do not argue that anything especially significant happened in a
federal enclave that did not occur elsewhere. Thus, as several other courts have in similar circum-
stances, this Court declines to find that federal enclave jurisdiction is appropriate.
D. Removal is Improper Under the Outer Continental Shelf Lands Act
Defendants contend that the Court has jurisdiction over the District’s claims under the
Outer Continental Shelf Lands Act (“OCSLA”). OCSLA provides original jurisdiction for “cases
and controversies arising out of, or in connection with . . . any operation conducted on the outer
Continental shelf.” 43 U.S.C. § 1349(b). They argue that the District’s claims arise in connection
with their offshore drilling operations, which are “operations” under OCSLA, and because the
District’s false advertising allegations “necessarily sweep[ ] in Defendants’ activities on” the outer
continental shelf. ECF No. 51 at 67. The District says that Defendants’ interpretation of OCSLA
is too broad. It contends that Defendants’ false advertising, which caused the injury, is not an
“operation” under OCSLA, and that any offshore drilling was not the “but for” cause of the Dis-
trict’s injury. ECF No. 63 at 26. The District has the better argument.
The D.C. Circuit has not interpreted the limits of OCSLA’s jurisdictional grant. Thus, the
parties—and other courts addressing the question—have turned to the Fifth Circuit for guidance.
To establish jurisdiction under OCSLA, a party must show that “(1) the activities that caused the
injury constituted an ‘operation’ ‘conducted on the outer Continental Shelf’ that involved the ex-
ploration and production of minerals, and (2) the case ‘arises out of, or in connection with’ the
13
operation.” In re Deepwater Horizon, 745 F.3d 157, 163 (5th Cir. 2014). In defining the second
requirement, the Fifth Circuit requires an operation on the outer Continental Shelf to be the “but-
for” cause of the plaintiff’s injuries. See In re Deepwater Horizon, 745 F.3d at 163; see also BP
P.L.C., 31 F.4th at 220; Suncor, 25 F.4th at 1272–75; but see Cnty. of San Mateo, 32 F.4th at 754
(declining to require “but-for” causation). And although § 1349(b)(1) is a “broad” jurisdictional
provision, Texaco Expl. & Prod., Inc. v. AmClyde Engineered Prods. Co., 448 F.3d 760, 768 (5th
Cir. 2006), a “mere connection” between operations on the outer Continental Shelf and a plaintiff’s
injury will not establish jurisdiction if the connection is “too remote,” In re Deepwater Horizon,
745 F.3d at 163.
Defendants’ alleged false advertising and misleading information campaigns are not “op-
eration[s]” under OCSLA, even if those acts somehow relate to their offshore drilling. See EP
Operating Ltd. P’ship v. Placid Oil Co., 26 F.3d 563, 567 (5th Cir. 1994) (“The term ‘operation’
contemplate[s] the doing of some physical act on the [outer Continental Shelf].”). Nor have De-
fendants shown that their activity on the outer Continental Shelf was the “but-for” cause of the
District’s claims. Defendants’ allegedly misleading newspaper advertisements, biased scientific
studies, and misstatements about green energy gave rise to the District’s suit, and are independent
of any of Defendants’ technical operations on the outer Continental Shelf. Put another way, “irre-
spective of Defendants’ activities on the [outer Continental Shelf],” the District’s “injuries still
exist as a result of that distinct marketing conduct.” BP P.L.C., 31 F.4th at 221. 7 Unlike cases
7
Defendants’ argument for removal under OCSLA would fail even under the Ninth Circuit’s mi-
nority approach, which does not require “but-for” causation. In San Mateo, that court held that
any connection between the alleged injuries and the outer Continental Shelf was “too attenu-
ated,” because the plaintiffs’ alleged injuries were “exclusively within their local jurisdictions”
and none of the alleged wrongdoing occurred on the outer Continental Shelf. San Mateo, 32
F.4th at 754–55.
14
involving “direct connections” to activity on the outer Continental Shelf, such as “collision, death,
personal injury, loss of wildlife, [or] toxic exposure,” the District’s suit does not present a “nexus”
between its injuries and offshore operations. Suncor, 25 F.4th at 1273 (citing Barker v. Hercules
Offshore, Inc., 713 F.3d 208, 213 (5th Cir. 2013)).
Defendants argue that, in the end, the District’s suit targets their extensive operations on
the outer Continental Shelf. But the First, Third, Fourth, Ninth, and Tenth circuits have all rejected
the argument that such a remote connection can establish jurisdiction under OCSLA. See Shell
Oil, 35 F.4th at 59–60; City of Hoboken, 45 F.4th at 712; BP P.L.C., 31 F.4th at 219–22; Cnty. of
San Mateo, 32 F.4th at 751–54; Suncor, 25 F.4th at 1272–75. They have done so for good reason:
Adopting Defendants’ approach would allow essentially any lawsuit related to fossil fuels to be
removed under OCSLA. See Shell Oil, 35 F.4th at 60. The Court agrees that even though section
1349(b)’s jurisdictional grant is broad, removal under the provision is inappropriate because the
District’s false advertising allegations under the Act “bear a weak relationship” to any activity on
the outer Continental Shelf. BP P.L.C., 31 F.4th at 222.
E. The Federal Officer Removal Statute Does Not Apply
Defendants argue that removal is appropriate under the federal officer removal statute.
This law allows removal of a civil action against “[t]he United States or any agency thereof or any
officer (or any person acting under that officer) of the United States or of any agency thereof.” 28
U.S.C. § 1442(a)(1). 8 This statute operates as an exception to the well-pleaded complaint rule.
See Mesa v. California, 489 U.S. 121, 136 (1989). To remove under the federal-officer removal
statute, Defendants must show that they were “acting under” the direction of the federal govern-
ment, that there is a “nexus” or “causal connection” between the asserted federal authority and the
8
The District does not contest that Defendants are each a “person” for purposes for § 1442.
15
conduct at issue, and that they can allege a “colorable” federal defense to the District’s claims. See
Jefferson Cnty. v. Acker, 527 U.S. 423, 431 (1999); Kormendi/Gardner Partners v. Surplus Ac-
quisition Venture, LLC, 606 F. Supp. 2d 114, 119 (D.D.C. 2009). The District does not challenge
Defendants’ ability to satisfy the third requirement.
As for the first requirement, Defendants argue that through various contracts and agree-
ments, “the federal government directed Defendants to engage in activities related to” the District’s
claims, and that Defendants have “acted under the direction” of the federal government when de-
veloping fossil fuel products. ECF No. 51 at 51–52. As for the second, they say the District’s
claims are sufficiently “connected or associated” with the fossil fuel activity they undertook at the
behest of the federal government. Id. at 52.
Not so. Even if Defendants acted under the federal government’s direction “for decades,”
as they say, ECF No. 51 at 65, Defendants have failed to show “a nexus” or “causal connection”
between “the charged conduct and the asserted official authority.” K&D LLC v. Trump Old Post
Office, LLC, 951 F.3d 503, 507 (D.C. Cir. 2020) (quoting Acker, 527 U.S. at 431). 9 The “charged
conduct” here is Defendants’ false advertising—not fossil fuel production en masse. Put another
way, the agreements between Defendants and the federal government do not require the alleged
false advertising and misleading representations that gave rise to the District’s claims. See, e.g.,
Shell Oil, 35 F.4th at 53 n.6 (holding that federal-officer removal statute did not apply because the
defendants’ contracts with the federal government “mandate[d] none of those activities”). True,
the injuries the District’s alleges—in short, climate change—eventually trace back to fossil fuel
9
The Court expresses no view on whether Defendants’ activities related to the development of
fossil fuel products qualify as actions taken “under the direction” of the federal government. The
Court notes, however, that the Fourth and Tenth Circuits found that similar activity fell short of
that requirement. See BP P.L.C., 31 F.4th at 230–32; Suncor, 25 F.4th at 1250–54.
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usage. But “the source of tort liability,” according to the District, is not Defendants’ production
of fossil fuels but the “concealment and misrepresentation of the products’ known dangers.” BP
P.L.C., 31 F.4th at 233.
Thus, the Court cannot find that there is a sufficient nexus between any action Defendants
may have taken under federal direction and the alleged false advertising that gave rise to the Dis-
trict’s claims. Removal under § 1442 is therefore unavailable to Defendants.
F. The Court Does Not Have Diversity Jurisdiction Over the Parties
Defendants contend that removal is proper because complete diversity exists between the
parties. They say that the parties are diverse because the Court should consider the citizenship of
the District’s citizens, who are the real parties in interest. The District argues that it sued on its
own behalf to protect sovereign interests distinct from the private interests of any individual citi-
zen. Again, the District has the better argument.
The diversity statute requires complete diversity, so all plaintiffs must be diverse from all
defendants in a lawsuit. 28 U.S.C. § 1332(a); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005).
Ordinarily, the “District of Columbia, like a state, is not a citizen of a state (or of itself) for diversity
purposes.” Barwood, Inc. v. District of Columbia, 202 F.3d 290, 292 (D.C. Cir. 2000). But when
a state is “merely a nominal party” rather than the true party in interest, diversity jurisdiction may
exist. Hood v. F. Hoffman-La Roche, Ltd., 639 F. Supp. 2d 25, 33 (D.D.C. 2009); see also Navarro
Sav. Ass’n v. Lee, 446 U.S. 458, 461 (1980) (“A federal court must disregard nominal or formal
parties and rest jurisdiction only upon the citizenship of real parties to the controversy.”).
Both parties agree that to establish more than a “nominal interest,” the District must show
a “quasi-sovereign interest” and allege an injury “to a sufficiently substantial segment of its pop-
ulation” rather than a discrete injury to a “group of individual residents.” Alfred L. Snapp & Son,
Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592, 607 (1982). The Act itself makes clear that the
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District has a “quasi-sovereign interest” in prosecuting consumer protection violations. 10 To
begin, it authorizes the District to sue “in the public interest” generally, not on behalf of individual
or discrete groups of citizens. D.C. Code § 28-3909(a). The Act also distinguishes between suits
brought by the District and those brought by private citizens. For example, the District may seek
civil penalties paid to the District’s treasury, while private citizens may seek only ordinary dam-
ages. Compare D.C. Code § 28-3903(b) with D.C. Code § 28-3905(k)(2). The District may also
seek an injunction for violations of the Act without proving damages, which a private citizen may
not do. Compare D.C. Code § 28-3909(a) with D.C. Code § 28-3905(k)(2)(D). Nor does the Act
impose a statute of limitations on claims that the District may bring, but it does require a private
citizen to bring similar claims within three years. Compare D.C. Code § 28-3909 with D.C. Code
§ 28-3905(d)(1). These distinctions make clear that the District has its own “pecuniary interest in
this lawsuit” distinct from the private financial interests of individual citizens. District of Colum-
bia ex rel. Am. Combustion, Inc. v. Transamerica Ins. Co., 797 F.2d 1041, 1047 (D.C. Cir. 1986).
Put another way, the District seeks redress of its own injuries and may recover for violations of
the Act apart from any recovery individual citizens seek. Cf. id. (finding no “pecuniary interest”
where state government sued but damages were awarded to private individuals).
There is also little doubt that the District’s alleged injuries affect both the District itself and
a “sufficiently substantial segment of its population.” Id. Alleged rising sea levels, destruction of
property, and other consequences of climate change fit that bill. For their part, Defendants argue
10
Other courts have recognized a state’s sovereign interest in preventing false advertising and
unfair trade practices in similar circumstances. See, e.g., Nessel ex rel. Michigan v. AmeriGas
Partners, 954 F.3d 831, 835 (6th Cir. 2020) (“The Attorney General brings this lawsuit in order to
vindicate the State’s sovereign and quasi-sovereign interest in deterring Defendants from engaging
in unfair trade practices . . . .”); Nevada v. Bank of Am. Corp., 672 F.3d 661, 670 (9th Cir. 2012)
(holding that a state “has a specific, concrete interest in eliminating any deceptive practices that
may have contributed to” a housing crisis).
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that the District sued on behalf of a discrete group of citizens, but they do not make clear what that
group is and why that group has been injured while other citizens have not.
Defendants have failed to establish that the District is merely a “nominal party” and that
the Court should consider its citizens as the real parties in interest. Because the District is not
diverse from Defendants, the Court therefore lacks diversity jurisdiction under § 1332.
G. The Class Action Fairness Act Does Not Apply
Defendants argue that they may remove the case because it satisfies the requirements of
the Class Action Fairness Act (“CAFA”). They essentially argue that the District’s suit is a class
action, and the citizens of the District are the class. See ECF No. 51 at 72. They also say that
because the District seeks “restitution and damages” for violating the Act, the District is effectively
representing a class of private citizens rather than its own interests.
“CAFA provides the federal district courts with ‘original jurisdiction’ to hear a ‘class ac-
tion’ if the class has more than 100 members, the parties are minimally diverse, and the ‘matter in
controversy exceeds the sum or value of $5,000,000.’” Standard Fire Ins. Co. v. Knowles, 568
U.S. 588, 592 (2013) (quoting 28 U.S.C. § 1332(d)). Defendants’ arguments fall short at the first
requirement: They cannot show that this is a “class action.” For reasons already discussed, the
District has a sovereign interest in prosecuting consumer protection claims and may sue under the
Act on its own behalf. The Act says nothing about the District suing on behalf of “class” or initi-
ating a “class action.” Defendants’ attempt to recast the District’s suit as a class action is therefore
unpersuasive, even if the suit were brought “in the public interest” generally. D.C. Code § 28-
3909(a).
Other courts in this District have reached the same conclusion in a similar context. Along
with suits brought by the District, the Act allows individuals to bring “private attorney general
suits” where “[a] person, whether acting for the interests of itself, its members, or the general
19
public” may “seek[ ] relief from the use by any person of a trade practice in violation of a law of
the District of Columbia.” See D.C. Code § 28–3905(k)(1). Courts have held that such a suit is
not a class action under CAFA because it is “authorized by District of Columbia statute and is a
separate and distinct procedural vehicle from a class action.” See Breakman v. AOL LLC, 545 F.
Supp. 2d 96, 101 (D.D.C. 2008); see also Stein v. Am. Exp. Travel Related Servs., 813 F. Supp. 2d
69, 73 (D.D.C. 2011) (citing Breakman and collecting cases). The same reasoning applies with
even more force to suits brought by the District, given its sovereign interest in preventing consumer
protection violations.
The cases Defendants rely on are unpersuasive. One does not relate to CAFA jurisdiction
at all. See Song v. Charter Commc’ns Inc., No. 17-cv-325 (JLB), 2017 WL 1149286 (S.D. Cal.
Mar. 28, 2017). The other is a District of Columbia case involving a suit under the Act, but the
court had no occasion to determine whether a federal court would have jurisdiction under CAFA.
See Rotunda v. Marriott Int’l, Inc., 123 A.3d 980, 989 (D.C. 2015). Nor did that suit involve a
government-initiated enforcement suit. See id. At bottom, Defendants cite no authority—and the
Court is aware of none—supporting the proposition that the District’s consumer protection suit
constitutes a “class action” under CAFA.
Conclusion
For all the above reasons, the Court will grant the District’s motion to remand. A separate
order will issue.
/s/ Timothy J. Kelly
TIMOTHY J. KELLY
United States District Judge
Date: November 12, 2022
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