The Supreme Court of the United States (SCOTUS) on Friday penned an 8-0 ruling in favor of Chevron in the Chevron USA Inc. v. Plaquemines Parish, Louisiana case, overturning the appeal court’s decision and allowing Chevron to move the case from state court to federal court. The decision will give Chevron a new day in federal court after a state jury ordered Chevron to pay $744 million in 2025.
In 2013, Plaquemines Parish and other parishes launched 42 state-court suits against oil and gas companies under the 1978 State and Local Coastal Resources Management Act. The Louisiana law prohibited certain uses of Louisiana’s coastal zone, including oil production, without a permit. Last year, the first of these cases went to trial, and Chevron was ordered to pay $744 million in a lawsuit which alleges that oil and gas drilling activities over many decades degraded the state’s wetlands, making Louisiana more vulnerable to hurricanes and other storms.
The parishes brought claims against oil and gas companies dating back to crude oil production on the Louisiana Coast during World War II. While the 1978 act exempted uses legally commenced prior to 1980, the plaintiffs allege that because the companies did not follow prudent industry standards, the 1980 cut-off did not apply.
Chevron then tried to remove the suit to federal court under the federal removal statute. This law permits a civil action or criminal prosecution started in a state court to be removed to federal court when the suit pertains to actions “for or relating to” a party’s role under a federal officer. Chevron argued that two of their predecessor companies had contracts with the federal government during World War II requiring them to refine crude oil.
The fifth circuit rejected this argument, concluding that the company’s contract with the federal government did not require them to produce oil. SCOTUS overturned the fifth circuit’s decision in an opinion written by Clarence Thomas, determining that the case can be removed to federal court because the lawsuit is about Chevron’s activities which are closely connected to their federal responsibilities.
Speaking to the Associated Press, attorney John Carmouche stated, “simply changing where the case will be heard, as has happened, will not deter our efforts to have Big Oil held accountable for the damages they caused and the enormous restoration they owe the people of Louisiana.”
Justice Samuel Alito did not participate in the ruling as he owns stocks in the parent company of one of the defendants.