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Attorneys for BP PLC and other companies yesterday told a panel of judges that Baltimore officials should not be able to pursue state-level litigation to “punish” oil producers.

The 4th U.S. Circuit Court of Appeals yesterday considered whether state or federal court is the proper venue for the Charm City’s quest to secure industry reimbursement for local climate damages linked to greenhouse gas emissions from fossil fuel production and other sources.

Baltimore and the oil companies made their case to Chief Judge Roger Gregory and Judges Stephanie Thacker and Henry Franklin Floyd.

Oil industry attorney Theodore Boutrous asked the 4th Circuit to overturn a federal district judge’s finding that the case belonged in state court. The Gibson, Dunn & Crutcher LLP partner said Baltimore’s fight to control emissions raises issues of “international scope” that should be decided in a federal venue.

Vic Sher, the lawyer representing Baltimore, balked at that “mischaracterization” of the case.

It isn’t the industry’s emissions that constitute wrongdoing here, said Sher, a founder of the law firm Sher Edling LLP. Rather, the city is seeking relief from Big Oil’s “campaign of lying and denial” around climate damages, he said.

Energy industry defendants — including BP, Exxon Mobil Corp. and Chevron Corp. — removed the damages cases to federal court, where judges could find that the core questions of the dispute are preempted by the Clean Air Act.

Judge Ellen Hollander, an Obama appointee to the U.S. District Court for the District of Maryland, set those plans awry when she decided that Baltimore’s complaints didn’t raise any federal questions on their surface and should therefore be decided by state judges.

Federal district judges in Rhode Island and Colorado followed suit.

The Supreme Court later rebuffed efforts by industry lawyers to freeze state court proceedings in those cases (Climatewire, Oct. 23).

A Baltimore attorney said the discovery process in the city’s case could start next year.

‘Intuitive appeal’ to industry’s claims

Thacker, an Obama appointee, said yesterday that there was some “intuitive appeal” to the oil companies’ arguments that a single state can’t make decisions on issues of international scope, such as climate change.

But Sher said that although Baltimore’s dispute is “a big case,” emissions aren’t at issue.

The attorney — who also represents other states, cities and counties in similar litigation — said Baltimore is seeking relief for matters “of traditional state concern.”

He argued that the lawsuit rests on bad corporate behavior, comparing the case to litigation over opioids and asbestos.

Boutrous countered that Baltimore’s case does seek to regulate greenhouse gases because without the presence of emissions, there wouldn’t be a dispute.

‘You just need some’ federal ties

The oil companies’ arguments also hinge on the federal officer removal doctrine, which grants federal courts jurisdiction over legal challenges to the United States or any of its agencies or officers.

Industry lawyers say the doctrine applies here because the companies have entered into contracts with federal entities like the Navy when extracting fossil fuels.

“You don’t need a lot of federal jurisdiction, you just need some,” Boutrous said, adding that the lower court read the statute too narrowly when it tossed Baltimore’s case to state court.

Parties generally cannot appeal transfer of a case from federal back to state court if it’s been remanded, but some circuit courts will consider the entire case again if there are questions related to federal officer jurisdiction, which oil companies say existed here.

Sher countered that the Navy contract at issue never required oil companies to operate; it merely allowed them to, and at their own benefit. Thus federal office jurisdiction, he said, doesn’t apply here.

Who should pay?

Baltimore has “a really strong case,” bolstered by decisions by multiple federal judges, that the questions in this dispute belong in state court, said Suzanne Sangree, the city’s director of affirmative litigation.

She added that state courts are “well-equipped” to make decisions on what local climate damages are and how much they’ll cost.

And taxpayers should not be on the hook for damage the oil industry knew was coming, Sangree said.

Companies “put out disinformation about what damage their products would cause, and they failed to warn,” Sangree told reporters after the hearing. “Meanwhile, they made trillions of dollars in profits.”

The 4th Circuit is expected to issue its ruling in the coming months.

Gregory is a Clinton and George W. Bush appointee, and Floyd is an Obama pick.