US Supreme Court to hear Chevron, Exxon appeal over Louisiana coastal damage

The U.S. Supreme Court ruled on Monday that it would hear an appeal by Chevron and Exxon Mobil, as well as other oil and gas firms, to move lawsuits filed by two Louisiana municipalities accusing them of damaging the state's coastline over a decade-long period from state court to federal court.

The Justices heard an appeal from the companies against a lower court ruling that rejected their claim that the lawsuits belonged in federal court, because the parishes Plaquemines & Cameron were suing for oil production undertaken during World War II to fulfill U.S. Government refinery contracts. Federal court is regarded as a more friendly venue for such litigation.

The next term of the justices, which starts in October, is due to hear this case.

In 2013, six parishes in Louisiana along the coast brought 42 lawsuits against oil and gas companies for violating Louisiana’s State and Local Coastal Resources Management Act, a 1978 state law on permitting.

In April, in the first trial to be held, a jury found that Chevron was liable for $744.61 million to Plaquemines parish.

The appeal filed by the companies before the U.S. Supreme Court relates to two cases, one brought by Plaquemines Parish and the other by Cameron Parish. Both of these raised issues of jurisdiction that were common to 42 of the cases.

The parishes have accused the companies for damaging coastal marshlands by dredging, and developing pipelines. They are seeking billions in damages as compensation to fund land restoration efforts and storm protection measures to reduce erosion.

Companies have long maintained that these cases should not be heard in state courts, which are considered to be more favorable for plaintiffs. In asking the Supreme Court for a hearing, they cited the April verdict as a way to highlight the importance of the case. In 2023, the justices declined to hear an appeal from an earlier ruling that sent the cases back to court for different reasons.

The latest appeal was made based on an American law which allows federal officers or contractors who are involved in litigation before state courts involving their official duties, to take the case to federal court. This is done to avoid local interests affecting the proceedings.

The companies claimed that the cases should be heard in federal court as they had contracts with the U.S. Government to provide refined petroleum products to the government during World War Two, and produced oil for the contract.

The 5th U.S. Circuit Court of Appeals, based in New Orleans, upheld lower court decisions remanding the cases back to state courts. Circuit Court of Appeals upheld lower court decisions remanding cases back to state courts, saying that the exploration and production operations at issue were not related to the contracted refining activities of the companies. (Reporting and editing by Will Dunham in Boston)

(source: Reuters)