`
`STERN KILCULLEN & RUFOLO, LLC
`Herbert J. Stern
`hstern@sgklaw.com
`Joel M. Silverstein
`jsilverstein@sgklaw.com
`325 Columbia Turnpike, Suite 110
`Florham Park, New Jersey 07932-0992
`Telephone: 973.535.1900
`Facsimile: 973.535.9664
`
`GIBSON, DUNN & CRUTCHER LLP
`Theodore J. Boutrous, Jr., pro hac vice forthcoming
`tboutrous@gibsondunn.com
`333 South Grand Avenue
`Los Angeles, CA 90071
`Telephone: 213.229.7000
`Facsimile: 213.229.7520
`
`Attorneys for Defendants
`Chevron Corp. and Chevron U.S.A. Inc.
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
`
`
`
`
`
`
`
`
`
`
`Civil Action No. 2:20-cv-14243
`
`NOTICE OF REMOVAL
`
`
`CITY OF HOBOKEN
`
`Plaintiff,
`
`v.
`
`EXXON MOBIL CORP.,
`EXXONMOBIL OIL CORP., ROYAL
`DUTCH SHELL PLC, SHELL OIL
`COMPANY, BP P.L.C., BP AMERICA
`INC., CHEVRON CORP., CHEVRON
`U.S.A. INC., CONOCOPHILLIPS,
`CONOCOPHILLIPS COMPANY,
`PHILLIPS 66, PHILLIPS 66
`
`
`
`
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 2 of 168 PageID: 2
`
`COMPANY, AMERICAN
`PETROLEUM INSTITUTE,
`
`Defendants.
`
`
`
`
`
`TO THE CLERK OF THE ABOVE-TITLED COURT AND TO PLAINTIFF
`THE CITY OF HOBOKEN AND ITS COUNSEL OF RECORD:
`
`
`PLEASE TAKE NOTICE THAT Defendants Chevron Corp. and Chevron
`
`U.S.A. Inc. (collectively, “the Chevron Parties”) remove this action—with
`
`reservation of all defenses and rights—from the Superior Court of New Jersey, Law
`
`Division: Hudson County, No. HUD-L-003179-20, to the United States District
`
`Court for the District of New Jersey, pursuant to 28 U.S.C. §§ 1331, 1332(d),
`
`1367(a), 1441(a), 1442, 1446, and 1367(a), and 43 U.S.C. § 1349(b). All other
`
`defendants that have been joined and served (collectively, “Defendants”) have
`
`consented to this Notice of Removal.
`
`This Court has original federal question jurisdiction under 28 U.S.C. § 1331
`
`because the Complaint necessarily arises under federal laws and treaties and presents
`
`substantial federal questions as well as claims that are completely preempted by
`
`federal law. Removal is also proper pursuant to the federal officer removal statute,
`
`28 U.S.C. § 1442, as well as 28 U.S.C. §§ 1332(d), 1441(a), and 1446, and 43 U.S.C.
`
`§ 1349(b). This Court has supplemental jurisdiction under 28 U.S.C. § 1367(a) over
`
`any claims for which it does not have original federal question jurisdiction because
`
`
`
`ii
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 3 of 168 PageID: 3
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`they form part of the same case or controversy as those claims over which the Court
`
`has original jurisdiction.
`
`
`
`
`
`
`
`iii
`
`
`
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`
`V.
`
`TABLE OF CONTENTS
`INTRODUCTION ............................................................................................ 1
`I.
`TIMELINESS OF REMOVAL ...................................................................... 34
`II.
`III. SUMMARY OF ALLEGATIONS AND GROUNDS FOR REMOVAL ..... 35
`IV. THIS COURT HAS FEDERAL-QUESTION JURISDICTION BECAUSE
`PLAINTIFF’S CLAIMS NECESSARILY ARISE UNDER FEDERAL LAW
` ......................................................................................................................... 40
`THE ACTION IS REMOVABLE UNDER THE OUTER CONTINENTAL
`SHELF LANDS ACT ..................................................................................... 52
`VI. THE ACTION IS REMOVABLE UNDER THE FEDERAL OFFICER
`REMOVAL STATUTE .................................................................................. 60
`VII. THE ACTION IS REMOVABLE BECAUSE IT NECESSARILY RAISES
`DISPUTED AND SUBSTANTIAL FEDERAL ISSUES ............................ 117
`VIII. THE ACTION IS REMOVABLE BECAUSE IT IS COMPLETELY
`PREEMPTED BY FEDERAL LAW ........................................................... 142
`IX. THIS ACTION IS REMOVABLE BECAUSE THIS CASE ARISES FROM
`ACTS ON MULTIPLE FEDERAL ENCLAVES ........................................ 150
`THE ACTION IS REMOVABLE UNDER THE CLASS ACTION
`FAIRNESS ACT ........................................................................................... 154
`XI. THIS COURT HAS JURISDICTION AND REMOVAL IS PROPER ...... 162
`
`
`X.
`
`
`
`iv
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`
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`I.
`
`INTRODUCTION
`
`For many decades, United States policy has expressly recognized the
`
`fundamental strategic importance of oil and gas to the Nation’s economic well-being
`
`and national security. It is not an accident that the United States Department of
`
`Defense is the single largest consumer of energy in the United States and one of the
`
`world’s largest users of petroleum fuels. And when certain OPEC countries
`
`embargoed oil sales to the United States in 1973-74, the U.S. Congress responded by,
`
`among other things, creating the Strategic Petroleum Reserve to blunt the use of
`
`petroleum as a weapon. See Energy Policy and Conservation Act of 1975, Pub. L.
`
`No. 94-163, 89 Stat. 871 (1975). For similar reasons, Congress enacted the Naval
`
`Petroleum Reserves Production Act of 1976, Pub. L. No. 94-258, 90 Stat. 303, 307-
`
`08 (1976), which “authorized and directed” that petroleum from the federal petroleum
`
`reserve at Elk Hills, California—which Defendant Chevron Corp. had operated for
`
`thirty-one years, developing and exploiting this capacity—“be produced at the
`
`maximum efficient rate for up to 6 years.”1
`
`In fact, for vital security and economic reasons, every Administration since
`
`that of Franklin D. Roosevelt has taken active steps to increase U.S. oil production.
`
`While the alleged risks of global climate change have increased focus on alternative
`
`
` 1 See also Declaration of Joshua D. Dick (“Dick Decl.”), Ex. 2 (Steven Rattner,
`Long-Inactive Oilfield is Open—for Now, N.Y. Times (Oct. 31, 1977)); id. Ex. 3
`(Robert Lindsey, Elk Hills Reserve Oil Will Flow Again, N.Y. Times (July 3,
`1976)).
`
`
`
`1
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 6 of 168 PageID: 6
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`sources of energy, petroleum remains the ineluctable backbone of United States
`
`energy policy. For this reason, in 2010, President Obama “announc[ed] the
`
`expansion of offshore oil and gas exploration—but in ways that balance the need to
`
`harness domestic energy resources and the need to protect America’s natural
`
`resources.”2 President Obama explained that it was “not a decision that I’ve made
`
`lightly. . . . But the bottom line is this: given our energy needs, in order to sustain
`
`economic growth, produce jobs, and keep our businesses competitive, we’re going to
`
`need to harness traditional sources of fuel even as we ramp up production of new
`
`sources of renewable, homegrown energy.”3
`
`Now, however, Plaintiff asks the court to find that this same petroleum
`
`production contributes to, among other things, an unlawful “public nuisance” and
`
`“trespass” under New Jersey state law. Under various theories, the Complaint seeks
`
`to hold Defendants liable for “extracting, producing, and selling more than 12% of
`
`the world’s fossil fuels since 1965.” Compl. ¶ 335; see also id. ¶¶ 291(e), 309(e),
`
`339, 347, 350, 357, 362. Plaintiff asserts that this subjects Defendants to
`
`“compensatory, consequential and punitive damages,” as well as orders “compelling
`
`Defendants to abate the nuisance” and “preliminarily and permanently enjoining”
`
`them from conducting their lawful activities. Compl. at 144–45, Prayer for Relief.
`
`
` 2 Remarks on Energy at Andrews Air Force Base, Maryland, 2009 Daily Comp.
`Pres. Doc. 2 (Mar. 31, 2010), https://www.govinfo.gov/content/pkg/DCPD.
` 3 Id.
`
`
`
`2
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 7 of 168 PageID: 7
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`Plaintiff’s claims depend on Defendants’ production, distribution and/or sale
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`of oil and gas that create greenhouse gas emissions if and only if combusted by end
`
`users. Plaintiff does not—and cannot—limit its claims to harms allegedly caused by
`
`oil and gas extracted, produced, distributed, sold, marketed, or used in New Jersey.
`
`Instead, Plaintiff’s claims expressly target Defendants’ nationwide and global
`
`activities. In fact, Plaintiff’s claims sweep even more broadly, depending necessarily
`
`on the activities of billions of oil and gas consumers, including not only entities like
`
`the U.S. government and military, but also countless hospitals, schools,
`
`manufacturing facilities, and individual households around the world. Indeed,
`
`Plaintiff itself is a prodigious consumer and user of fossil fuels, emitting thousands
`
`of tons of CO2 through its own consumption alone.4 Yet, Plaintiff asks this Court to
`
`halt Defendants’ production of oil and gas by assessing massive monetary damages
`
`and entering an injunction.
`
`The scope of this theory is breathtaking—it would reach the sale of oil and gas
`
`anywhere in the world, including all past and otherwise lawful sales, including sales
`
`to the federal government. See, e.g., Compl. ¶ 32 (“Global production and
`
`combustion of fossil fuels is the central reason why the atmospheric concentration of
`
`
` 4 First Environment, Inc., Greenhouse Gas Emissions Inventory Government
`Operations City of Hoboken, New Jersey Activities Year 2017, 16–19, Apr. 2019,
`https://assets-global.website-
`files.com/58407e2ebca0e34c30a2d39c/5cbdc8711782057ff8e06626_FINAL_M
`unicipal%20GHG%20Report.pdf.
`
`
`
`3
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 8 of 168 PageID: 8
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`greenhouse gasses, prominently carbon dioxide (‘CO2’), has dramatically increased
`
`over the last fifty years. . . .” (emphasis added)).5 And because Plaintiff challenges
`
`“production and combustion” over the past several decades, the Complaint
`
`necessarily calls into question longstanding decisions by the federal government
`
`regarding, among other
`
`things, national security, national energy policy,
`
`environmental protection, the maintenance of a national strategic petroleum reserve
`
`program, development of energy resources on the United States’ outer continental
`
`shelf lands, mineral extraction on federal lands (which have produced billions of
`
`dollars in revenue for the federal government), and the negotiation of international
`
`agreements bearing on the development and use of fossil fuels.
`
`The federal issues and implications of Plaintiff’s Complaint and requests for
`
`relief demand resolution by a federal court under federal law. The determination of
`
`how best to address global climate change, and the balancing of the costs and benefits
`
`of the use of fossil fuels that goes into that equation, has been and should continue to
`
`be made by the federal government through federal policies and international
`
`cooperation. As the Ninth Circuit recently explained, “any effective plan [to reduce
`
`greenhouse gas emissions] would necessarily require a host of complex policy
`
`
` 5 See also, e.g., id. ¶ 32 (“Global production and combustion of fossil fuels is the
`central reason why the atmospheric concentration of greenhouse gasses,
`prominently carbon dioxide (“CO2”), has dramatically increased over the last fifty
`years.”); ¶ 33 (“[G]reenhouse gas emissions from fossil fuels are the main driver
`of global warming.”).
`
`
`
`4
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 9 of 168 PageID: 9
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`decisions entrusted . . . to the wisdom and discretion of the executive and legislative
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`branches.” Juliana v. United States, 947 F.3d 1159, 1171 (9th Cir. 2020). A
`
`patchwork of fifty different state-law answers to this necessarily global issue would
`
`be unworkable and precluded under our federal constitutional system. See North
`
`Carolina ex. rel. Cooper v. TVA, 615 F.3d 291, 298 (4th Cir. 2010) (“If courts across
`
`the nation were to use the vagaries” of state “public nuisance doctrine to overturn the
`
`carefully enacted rules governing air-borne emissions, it would be increasingly
`
`difficult for anyone to determine what standards govern.”).
`
`As a consequence, the Complaint is removable to federal court on multiple
`
`grounds including, without limitation: (1) federal question jurisdiction (28 U.S.C.
`
`§§ 1331, 1441(a)) because Plaintiff’s claims “arise under” federal law; (2)
`
`jurisdiction under the Outer Continental Shelf Lands Act (43 U.S.C. § 1349(b)); and
`
`(3) jurisdiction under the Federal Officer Removal Statute (28 U.S.C. § 1442).
`
`Plaintiff’s claims arise under federal law. Plaintiff’s Complaint seeks to use
`
`state tort law to impose liability on the energy industry for all of the future harms that
`
`Plaintiff alleges will be caused by global warming. In the process, Plaintiff would
`
`effectively levy an unprecedented worldwide tax on lawful productive conduct that
`
`has long been encouraged by Congress and foreign governments alike, and that
`
`remains essential to the health of the economy and the security, stability, and
`
`economic interests of the United States. Though Plaintiff purports to assert its claims
`
`
`
`5
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 10 of 168 PageID: 10
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`under state law, the face of the Complaint reveals that the substance of those claims
`
`turns on long-established federal policy, statutory, regulatory, and constitutional
`
`standards, issues, and frameworks. The well-pleaded complaint rule makes clear that
`
`it is the substance of the claims, not the plaintiff’s characterization of them as state
`
`or federal claims, that is controlling.
`
`Supreme Court precedent dictates that claims based on alleged interstate or
`
`international pollution fall into the narrow category of claims for which the structure
`
`of the U.S. Constitution demands that “a federal rule of decision is ‘necessary to
`
`protect uniquely federal interests.’” Texas Indus., Inc. v. Radcliff Materials, Inc., 451
`
`U.S. 630, 640 (1981) (citation omitted). State law, by its very nature, cannot apply,
`
`and the Supreme Court has held on at least three separate occasions that an action for
`
`interstate air or water pollution necessarily arises under federal law and warrants a
`
`federal court’s exercise of federal question jurisdiction under 28 U.S.C. § 1331. See
`
`Am. Elec. Power Co. v. Connecticut, 564 U.S. 410 (2011) (“AEP”) (interstate and
`
`international effects of greenhouse gas emissions); City of Milwaukee v. Illinois, 451
`
`U.S. 304 (1981) (“Milwaukee II”) (interstate water pollution); Illinois v. City of
`
`Milwaukee, 406 U.S. 91 (1972) (“Milwaukee I”) (same). In the context of interstate
`
`pollution disputes, the Court has explained that “only a federal common law basis
`
`can provide an adequate means for dealing with such claims.” Milwaukee I, 406 U.S.
`
`at 107 n.9 (citation omitted); see also International Paper Co. v. Ouellette, 479 U.S.
`
`
`
`6
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 11 of 168 PageID: 11
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`481, 488 (1987) (“[T]he regulation of interstate water pollution is a matter of federal,
`
`not state, law.”). Thus, Plaintiff’s claims seeking relief for interstate greenhouse gas
`
`emissions necessarily “arise under” federal law. Cf. 28 U.S.C. § 1441(c)(1)(A). The
`
`Complaint’s dependence on the navigable waters of the United States reinforces that
`
`conclusion. Following these precedents, the Southern District of New York held that
`
`a lawsuit legally indistinguishable from this to be one “arising under” federal law.
`
`See City of New York v. B.P. p.l.c., 325 F. Supp. 3d 466, 472 (S.D.N.Y. 2018) (“City
`
`of New York”).
`
`Plaintiff’s claims also necessarily arise under federal law because they seek to
`
`regulate the production and sale of oil and gas abroad (where much of the alleged
`
`conduct underlying Plaintiff’s claims necessarily occurred), and, therefore, implicate
`
`the federal government’s foreign affairs power and the Constitution’s Foreign
`
`Commerce Clause. The federal government has exclusive authority over the nation’s
`
`international policy on climate change and relations with foreign nations. “Power
`
`over external affairs is not shared by the States; it is vested in the national government
`
`exclusively.” United States v. Pink, 315 U.S. 203, 233 (1942). In the context of
`
`Plaintiff’s interstate and international claims, therefore, “our federal system does not
`
`permit the controversy to be resolved under state law,” “because the authority and
`
`duties of the United States as sovereign are intimately involved” and “because the
`
`interstate [and] international nature of the controversy makes it inappropriate for state
`
`
`
`7
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 12 of 168 PageID: 12
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`law to control.” Texas Indus., 451 U.S. at 641. Because climate change is an
`
`inherently global phenomenon—and is alleged to be so in the Complaint—any
`
`liability imposed by state courts under state law would have global effects,
`
`undermining the federal government’s foreign-policy prerogatives in an area where
`
`comprehensive international solutions are paramount. Moreover, conflicts would
`
`inevitably arise were the courts of different states, each applying its own state’s law,
`
`to impose conflicting standards on the same global conduct.
`
`At bottom, this lawsuit implicates bedrock divisions of federal-state
`
`responsibility. Plaintiff seeks to usurp, through what is styled as a set of state-law
`
`claims, the direction of federal policy in core spheres of national security, nationwide
`
`economic development, and international relations. Given the substantial and
`
`uniquely federal interests posed by climate change claims like these, causes of action
`
`of the type asserted here arise only by federal law or statute.
`
`Outer Continental Shelf Lands Act. In recent decades and continuing through
`
`the present, a substantial portion of domestic exploration and production of oil and
`
`gas has occurred on the Outer Continental Shelf (“OCS”). Defendants and their
`
`affiliates operate a large share of the more than 5,000 active oil and gas leases on
`
`nearly 27 million OCS acres administered by the U.S. Department of the Interior
`
`
`
`8
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 13 of 168 PageID: 13
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`under the Outer Continental Shelf Lands Act (“OCSLA”).6 Oil produced from the
`
`OCS has accounted for approximately 30% of all domestic production, and the U.S.
`
`Treasury takes in more than $10 billion in average annual revenues from OCS lease
`
`bonuses, rental payments, and royalties.7 Many of the Defendants in this lawsuit and
`
`their alleged predecessors, successors, or subsidiaries worked to develop the oil and
`
`gas resources on the OCS under federal government supervision. As such, Plaintiff’s
`
`claims “aris[e] out of, or in connection with . . . any operation conducted on the”
`
`OCS, and therefore provide this Court with jurisdiction. 43 U.S.C. § 1349(b).
`
`In 1953, Congress passed OCSLA to make these vital national oil and gas
`
`resources available for “expeditious and orderly development.” 43 U.S.C. §1332(3).
`
`Responding to President Nixon’s direction to “increase the acreage leased on the
`
`Outer Continental Shelf” to meet the federal government’s goal for energy
`
`independence from foreign oil by 1980,8 Congress amended OCSLA to further
`
`encourage the leasing of the OCS to meet national energy and security needs, while
`
`increasing federal control over lessees, to promote the national energy agenda and
`
`
` 6 Statement of Abigail Ross Hopper, Director, Bureau of Ocean Energy
`Management, Before the House Committee on Natural Resources (Mar. 2, 2016),
`https://www.boem.gov/FY2017-Budget-Testimony-03-01-2016.
` 7 U.S. Dep’t of Interior, Bureau of Ocean Energy Management, OCS Oil and Gas
`Leasing Program: 2012-2017 Final Programmatic Environmental Impact
`Statement (“2012-2017 EIS”), OCS EIS/EA BOEM 2012-030, 1-4 (2012).
` 8 See Special Message to the Congress on the Energy Crisis, 1 Pub. Papers 29 (Jan.
`23,
`1974),
`https://quod.lib.umich.edu/p/ppotpus/4731948.1974.001?rgn=main;view=fulltex
`t.
`
`
`
`9
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 14 of 168 PageID: 14
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`protect the environment. The amendments were “intended to result in expedited
`
`exploration and development of the Outer Continental Shelf in order to achieve
`
`national economic and energy policy goals, assure national security, reduce
`
`dependence on foreign sources, and maintain a favorable balance of payments in
`
`world trade.” California ex rel. Brown v. Watt, 668 F.2d 1290, 1296 (D.C. Cir. 1981)
`
`(quoting 43 U.S.C. § 1802).
`
`Recognizing the substantial federal interests in the OCS leasing program,
`
`Congress granted federal courts original jurisdiction “to the entire range of legal
`
`disputes that it knew would arise relating to resource development on the Outer
`
`Continental Shelf.” Laredo Offshore Constructors, Inc. v. Hunt Oil Co., 754 F.2d
`
`1223, 1228 (5th Cir. 1985) (emphasis added). There can be no doubt that Plaintiff’s
`
`alleged injuries, which the Complaint asserts are a result of Defendants’ “production
`
`and combustion of fossil fuels,” are directly connected to Defendants’ substantial
`
`operations on the OCS. Compl. ¶ 32; see also id. ¶ 301. In any event, the Court need
`
`only “‘credit [Defendants’] theory of the case for purposes’ . . . of the removal
`
`inquiry.” K&D LLC v. Trump Old Post Office LLC, 951 F.3d 503, 506 (D.C. Cir.
`
`2020) (quoting Jefferson Cnty. v. Acker, 527 U.S. 423 (1999)), and interpret OCSLA
`
`broadly in favor of removal. See, e.g., The Taxpayer Citizens Grp. v. Cape Wind
`
`Assocs., LLC, 373 F.3d 183, 188 (1st Cir. 2004) (OCSLA is “a sweeping assertion of
`
`federal supremacy over the submerged lands outside of the three-mile SLA
`
`
`
`10
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 15 of 168 PageID: 15
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`boundary”).
`
`Federal Officer Removal. Defendants’ exploration and production of oil and
`
`gas, including production on the OCS and on federal lands, has been conducted
`
`substantially under the direction, supervision, and control of officers of the federal
`
`government, and therefore this action is also removable under the Federal Officer
`
`Removal Statute. 28 U.S.C. § 1442. Indeed, the leases the government required
`
`Defendants to sign in order to produce oil and gas on the OCS include terms and
`
`conditions that provide for continued federal oversight and that mandate that
`
`Defendants develop the leaseholds to achieve national energy objectives. These
`
`terms require Defendants to produce oil and gas, control the methods of production,
`
`and direct how oil and gas are sold to benefit the national economy. For example,
`
`the leases require Defendants to “maximize the ultimate recovery of the hydrocarbons
`
`from the leased area”; require that drilling take place “in accordance with an approved
`
`exploration plan (EP), development and production plan (DPP) or development
`
`operations coordination document (DOCD) [as well as] approval conditions”; and
`
`specify that the federal government retains the right to oversee the lessee’s rate of
`
`production from its leases.9
`
`By producing oil and gas from the OCS, Defendants help the government meet
`
`
` 9 See generally Dick Decl.. Exs. 5–8; Adam Vann, Congressional Research Service,
`RL33404, Offshore Oil and Gas Development: Legal Framework (2018),
`https://fas.org/sgp/crs/misc/RL33404.pdf (describing the multi-step process for
`approval of development plans and BOEM oversight procedures).
`
`
`
`11
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 16 of 168 PageID: 16
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`national interests, and—as President Obama emphasized in 2010—do so in the way
`
`that the federal government has concluded best addresses national climate change
`
`objectives by balancing national security, economic and environmental concerns.
`
`See supra n.2. Indeed, one of the first undertakings of the newly created Federal
`
`Energy Administration in 1974 was to propose expanding the OCS leasing program
`
`significantly: “Recent world events have spotlighted the growing dependence of the
`
`United States on imported crude oil and petroleum products. Interruptions in oil
`
`imports impose severe costs on the United States due to the pervasive economic role
`
`of petroleum in almost every sector of the economy. . . . [T]he Outer Continental
`
`Shelf represents one of the most important potential sources of increased domestic
`
`energy production, [and so] the President has called for an accelerated leasing
`
`program as a mechanism to insure that the most favorable OCS exploration prospects
`
`become available for near-term development.”10
`
`It is significant that, to implement this direction, Congress considered creating
`
`a national oil corporation to facilitate the development of oil and gas on the OCS, but
`
`ultimately decided that it would be more efficient to contract with private energy
`
`companies, including many of the Defendants here, to extract and produce oil and
`
`gas from these federal lands through a closely monitored leasing program that would
`
`be supervised by the Department of the Interior and provide the federal government
`
`
` 10 Dick Decl., Ex. 10 (H.R. Doc. No. 93-406, at App’x 2 (1974)).
`
`
`
`12
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 17 of 168 PageID: 17
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`with sufficient control over the production to protect national interests. See Cong.
`
`Rec. S903-11 (Jan. 27, 1975). As the Supreme Court has explained, removal is
`
`appropriate where, as here, private companies have “performed a job that, in the
`
`absence of a contract with a private firm, the Government itself would have had to
`
`perform.” Watson v. Philip Morris Cos., 551 U.S. 142, 154 (2007).
`
`As noted above, the United States military needs oil and gas to be produced by
`
`Defendants and other industry members to carry out its military purpose. For more
`
`than a century, “these products [have been] used for the war effort . . . [as] many
`
`‘ordinary’ products [are] crucial to the national defense, such as . . . fuel and diesel
`
`oil used in the Navy’s ships; and lubricating oils used for various military machines.”
`
`Exxon Mobil Corp. v. United States, 2020 WL 5573048, at *31 (S.D. Tex. Sept. 16,
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`2020) (emphasis added); see also id. at *47 (noting the “value of [the] petroleum
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`industry’s contribution to the nation’s military success.”). The United States
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`Department of Defense is the country’s—and one of the world’s—single biggest user
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`of petroleum fuels. In fiscal year 2019 alone, the Department of Defense purchased
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`94.2 million barrels of petroleum in compliance with military specifications, totaling
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`$12.1 billion in procurement actions.11
`
`
` 11 Def. Logistics Agency Energy, Fiscal Year 2019 Fact Book (2019),
`https://www.dla.mil/Portals/104/Documents/Energy/Publications/FactBookFisca
`lYear2019_highres.pdf?ver=2020-01-21-103755-473. This Fact Book also
`provides details of the types of fuels purchased by the military, the military
`standards governing the fuels purchased from Defendants, and the military’s
`research efforts related to petroleum fuels.
`
`
`
`13
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 18 of 168 PageID: 18
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`Starting at least as early as World War II, officers of the federal government
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`directed and controlled Defendants’ production, extraction, and development of fossil
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`fuel products as required to meet the unprecedented demands generated by the
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`nation’s military. The court in Exxon Mobil v. United States acknowledged the long
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`history of federal government control over Defendants’ lawful activities in finding
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`that the government was responsible for certain environmental response costs under
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`CERCLA: “By controlling the nation’s crude oil supply, the federal government
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`controlled the nation’s petroleum industry.” Exxon Mobil, 2020 WL 5573048, at *11
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`(S.D. Tex. Sept. 16, 2020). Federal agencies that were formed for the war effort,
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`including the War Production Board (“WPB”) and the Petroleum Administration for
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`War (“PAW”), had the power to order the oil and gas industry to identify scarce
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`goods, prioritize their use, and facilitate gas production for the military. See United
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`States v. Shell Oil Co., 294 F.3d 1045, 1049 (9th Cir. 2002) (“Shell I”). “The
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`government exerted substantial control and direction over the refineries’ actions,
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`including decisions on how to use raw materials and labor.” Exxon Mobil, 2020 WL
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`5573048, at *1. The Exxon Mobil court rejected the argument that private refiners
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`“voluntarily cooperated” and instead found that they had “no choice” but to comply
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`with federal officer’s direction. Id. at *11. In fact, the federal government “insiste[d]
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`on having the plants operate 24 hours a day, 7 days a week, year round.” Id. at *8.
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`Put simply, the federal government “exerted significant control over the operations
`
`
`
`14
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 19 of 168 PageID: 19
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`of refinery owners or operators that contracted to manufacture avgas, synthetic
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`rubber, and other war materials.” Id. at *14.
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`In the decades after World War II, and continuing up to the present, the federal
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`government has repeatedly relied on energy companies, including Defendants, to
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`increase domestic oil production to bolster the nation’s military and economic
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`security. For instance, in the 1970s, in the midst of a series of national energy crises,
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`Congress passed the Trans-Alaska Pipeline Authorization Act of 1973, explaining
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`that it was in the “national interest” to deliver oil and gas from Alaska’s North Slope
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`“to domestic markets . . . because of growing domestic shortages and increasing
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`dependence upon insecure foreign sources.” Trans-Alaska Pipeline Authorization
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`Act, Pub. L. No. 93-153, § 202(a), 87 Stat. 576, 584 (1973). Defendants in this
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`lawsuit, as well as their alleged predecessors and subsidiaries, have been contributors
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`to the approximately 18.4 billion barrels of oil produced in Alaska since November
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`1973—the month in which the Trans-Alaska Pipeline Authorization Act was signed
`
`into law—to the present.12 In the 1990s, the Clinton administration amended OCSLA
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`to permit the Secretary of the Interior to grant certain royalty relief payments aimed
`
`at “reduc[ing] America’s dependence on unreliable sources of imported oil by
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`helping unlock an estimated 15 billion barrels of oil in the central and western Gulf
`
`
` 12 See Alaska Oil and Gas Conservation Commission, Data Miner 3: Production,
`http://aogweb.state.ak.us/DataMiner3/Forms/Production.aspx.
`
`
`
`15
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 20 of 168 PageID: 20
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`of Mexico” for energy companies’ exploration and production.13 In the 2000s, the
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`Bush administration opened up approximately 8 million additional acres of OCS
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`lands for leasing in the Gulf of Mexico, stating: “By developing these domestic
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`resources in a way that protects the environment, we will help address high energy
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`prices, protect American jobs, and reduce our dependence on foreign oil.” 14 Through
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`these actions and others too numerous to list here, the United States government has
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`repeatedly pushed for energy companies, including Defendants, to develop the
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`nation’s domestic oil resources, both for its own use and the use of billions of
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`consumers, including Plaintiff here.
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`Without question, Plaintiff’s Complaint asserts claims “for or relating to” acts
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`taken by Defendants under color of federal office. Plaintiff seeks to hold Defendants
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`liable—in the form of compensatory, punitive, and profit disgorgement damages—
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`for actions taken under the direction of federal officers to fulfill the needs of the
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`federal government and in pursuit of federal government policies to develop fossil
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`fuel resources and secure the national defense. This is more than sufficient for
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`removal under the Federal Officer Removal Statute, which requires only “a
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`‘connection’ or ‘association’ between the act in question and the federal office.” In
`
`
` 13 Press Secretary, White House Office of Communications, Statement on North
`Slope Oil Bill Signing (Nov. 28, 1995), 1995 WL 699656, at *1.
` 14 Statement on Signing [H.R. 6111], 2 Pub. Papers 2218 (Dec. 20, 2006),
`https://books.google.com/books?id=o2ei8yOphboC&printsec=frontcover#v=one
`page&q&f=false.
`
`
`
`16
`
`
`
`Case 2:20-cv-14243 Document 1 Filed 10/09/20 Page 21 of 168 PageID: 21
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`re Commonwealth’s Motion to Appoint Counsel Against or Directed to Defender
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`Ass’n of Philadelphia, 790 F.3d 457, 474 (3d Cir. 2015) (“Def. Ass’n of
`
`Philadelphia”); Sawyer v. Foster Wheeler LLC, 860 F.