Connecticut climate suit against Exxon sent back to state court

(Reuters) - A federal judge in New Haven, Connecticut, has granted the state’s bid to send back from federal to state court its lawsuit accusing oil major Exxon Mobil Corp of misleading the public over the impacts of its fossil fuels on climate change.

U.S. District Judge Janet Hall on Wednesday ruled that Texas-based Exxon failed to establish that the case must be heard in federal court, including because it raises questions of interstate and international pollution that the company argued are exclusively governed by federal common law.

Exxon spokesman Casey Norton said the company is reviewing the decision and will consider next steps. The company is represented by attorneys at Paul Weiss Rifkind Wharton & Garrison.

Connecticut's Attorney General William Tong, who filed the lawsuit last year, said in a statement: "We are one step closer to holding Exxon Mobil accountable for its decades-long campaign of deception."

In her ruling, Hall said that contrary to Exxon's arguments, federal common law does not necessarily preempt Connecticut's claims of deceptive and unfair practice to proceed under state law, in state court. Plaintiffs can, under the well-pleaded complaint rule, avoid federal jurisdiction for "strategic" reasons by making claims that solely rely on state law, she said.

The judge also said that Exxon's argument that the case is federal in nature because the company produced oil at the direction of the federal government failed.

While the federal government has at times exercised "control ... over ExxonMobil's operations" by contracting for fuel, Exxon was not acting under federal guidance when it published advertisements refuting links between the burning of fossil fuels and climate change over which Connecticut has sued, Hall said.

Connecticut sued Exxon in state Superior Court in September. The complaint alleges that the company violated the state's unfair trade practices act by deceiving Connecticut consumers about what the company knew about fossil fuels' impact on climate change.

The state's case is among another two dozen or so by local governments and states who have accused major oil and gas companies of contributing to the effects of climate change by selling fossil fuels.

The companies have typically removed the cases to federal court, which have overwhelmingly remanded them. Cities, states and other local governments see state courts as more amenable venues.

But a May ruling by the U.S. Supreme Court could help the companies in their effort to have their cases heard in federal court.

In the Supreme Court case, Exxon and other energy companies contested the 4th U.S. Circuit Court of Appeals' order to remand from federal to state court a lawsuit by the city of Baltimore seeking monetary damages from them due to costs caused by climate change.

A majority of the high court held that the Richmond, Virginia-based court had wrongly concluded it lacks jurisdiction to analyze all but one of the companies' grounds for removal, namely whether the companies had acted at the direction of the federal government.

The case is Connecticut v. Exxon Mobil Corporation, U.S. District Court for the District of Connecticut, No. 3:20-cv-01555.

For Connecticut: William Tong, attorney general of Connecticut

For Exxon Mobil Corporation: Daniel Toal of Paul Weiss Rifkind Wharton & Garrison

Connecticut sues Exxon for deceiving consumers about climate change

U.S. Supreme Court backs energy companies over Baltimore in climate case

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