FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`No. 18-16663
`
`D.C. Nos.
`3:17-cv-06011-WHA
`3:17-cv-06012-WHA
`
`ORDER AND
`AMENDED
`OPINION
`
`CITY OF OAKLAND, a Municipal
`Corporation, and The People of
`the State of California, acting by
`and through the Oakland City
`Attorney; CITY AND COUNTY OF
`SAN FRANCISCO, a Municipal
`Corporation, and The People of
`the State of California, acting by
`and through the San Francisco
`City Attorney Dennis J. Herrera,
`Plaintiffs-Appellants,
`
`v.
`
`BP PLC, a public limited
`company of England and Wales;
`CHEVRON CORPORATION, a
`Delaware corporation;
`CONOCOPHILLIPS, a Delaware
`corporation; EXXON MOBIL
`CORPORATION, a New Jersey
`corporation; ROYAL DUTCH
`SHELL PLC, a public limited
`company of England and Wales;
`DOES, 1 through 10,
`Defendants-Appellees.
`
`

`

`2
`
`CITY OF OAKLAND V. BP
`
`Appeal from the United States District Court
`for the Northern District of California
`William Alsup, District Judge, Presiding
`
`Argued and Submitted February 5, 2020
`Pasadena, California
`
`Filed May 26, 2020
`Amended August 12, 2020
`
`Before: Sandra S. Ikuta, Morgan Christen, and
`Kenneth K. Lee, Circuit Judges.
`
`Order;
`Opinion by Judge Ikuta
`
`SUMMARY*
`
`Removal/Subject-Matter Jurisdiction
`
`The panel vacated the district court’s judgment and order
`denying defendants’ motion to remand cases to the state court
`from which they had been removed on the ground that
`plaintiffs’ claim arose under federal law, and remanded for
`the district court to consider whether there was an alternative
`basis for subject-matter jurisdiction.
`
`The City of Oakland and the City and County of San
`Francisco filed complaints in California state court asserting
`
`* This summary constitutes no part of the opinion of the court. It has
`been prepared by court staff for the convenience of the reader.
`
`

`

`CITY OF OAKLAND V. BP
`
`3
`
`a California public-nuisance claim against five energy
`companies arising from the role of fossil fuel products in
`global warming. The complaints sought an order of
`abatement requiring the energy companies to fund a climate
`change adaptation program for the cities. The energy
`companies removed the complaints to federal court,
`identifying seven grounds for subject-matter jurisdiction,
`including that the cities’ public-nuisance claim was governed
`by federal common law. The district court denied the cities’
`motion to remand the cases to state court, holding that it had
`federal-question jurisdiction under 28 U.S.C. § 1331 because
`the cities’ claim was “necessarily governed by federal
`common law.” The cities amended their complaints to
`include a federal nuisance claim. The district court dismissed
`for failure to state a claim, and it dismissed four defendants
`for lack of personal jurisdiction.
`
`Considering the pleadings filed at the time of removal, the
`panel held that the state-law public-nuisance claim did not
`arise under federal law for purposes of § 1331. The panel
`explained that there is an exception to the well-pleaded
`complaint rule for a claim that arises under federal law
`because federal law is a necessary element of the claim. This
`exception applies when a federal issue is necessarily raised,
`actually disputed, substantial, and capable of resolution in
`federal court without disrupting the federal-state balance
`approved by Congress. The panel concluded that this
`exception did not apply because the state-law claim for public
`nuisance failed to raise a substantial federal question. A
`second exception, referred to as the “artful-pleading
`doctrine,” allows removal where federal law completely
`preempts a state-law claim. The panel concluded that this
`exception did not apply because the state-law claim was not
`completely preempted by the Clean Air Act.
`
`

`

`4
`
`CITY OF OAKLAND V. BP
`
`The panel further held that the cities cured any subject-
`matter jurisdiction defect by amending their complaints to
`assert a claim under federal common law. Thus, at the time
`the district court dismissed the cities’ complaints, there was
`subject-matter jurisdiction. Nonetheless, the panel held that
`it could not affirm the district court’s dismissals if there was
`not subject-matter jurisdiction at the time of removal. The
`panel concluded that the cities did not waive their argument
`in favor of remand by amending their complaints. The panel
`also rejected the energy companies’ argument that any
`impropriety with respect to removal could be excused by
`considerations of finality, efficiency, and economy. The
`panel agreed with the Fifth Circuit that a dismissal for failure
`to state a claim, unlike a grant of summary judgment or
`judgment after trial, is generally insufficient to forestall an
`otherwise proper remand.
`
`The panel remanded the cases to the district court to
`determine if there was an alternative basis for jurisdiction.
`
`COUNSEL
`
`Michael Rubin (argued), Barbara J. Chisholm, Rebecca
`Moryl Lee, and Corinne F. Johnson, Altshuler Berzon LLP,
`San Francisco, California; Victor M. Sher and Matthew K.
`Edling, Sher Edling LLP, San Francisco, California; Barbara
`J. Parker, City Attorney; Maria Bee, Special Counsel; Erin
`Bernstein, Supervising Attorney; Malia McPherson, Deputy;
`Office of the City Attorney, Oakland, California; Dennis J.
`Herrera, City Attorney; Ronald P. Flynn, Chief Deputy;
`Yvonne R. Meré, Chief, Complex Litigation; Matthew D.
`Goldberg and Robb W. Kapla, Deputies; City Attorney’s
`Office, San Francisco, California; for Plaintiffs-Appellants.
`
`

`

`CITY OF OAKLAND V. BP
`
`5
`
`Theodore J. Boutrous, Jr. (argued), Andrea E. Neuman, and
`William E. Thomson, Gibson Dunn & Crutcher LLP, Los
`Angeles, California; Joshua S. Lipshutz, Gibson Dunn &
`Crutcher LLP, San Francisco, California; Neal S. Manne,
`Johnny W. Carter, Erica Harris, and Steven Shepard, Susman
`Godfrey LLP, Houston, Texas; Herbert J. Stern and Joel M.
`Silverstein, Stern & Kilcullen LLC, Florham Park, New
`Jersey; Andrea E. Neuman and William E. Thomson, Gibson
`Dunn & Crutcher LLP, Los Angeles, California; Joshua S.
`Lipshutz and Thomas G. Hungar, Gibson Dunn & Crutcher
`LLP, Washington, D.C.; Neal S. Manne, Johnny W. Carter,
`Erica Harris, and Steven Shepard, Susman Godfrey LLP,
`Houston, Texas; Herbert J. Stern and Joel M. Silverstein,
`Stern & Kilcullen LLC, Florham Park, New Jersey; for
`Defendant-Appellee Chevron Corporation.
`
`Kannon K. Shanmugam (argued), Paul Weiss Rifkind
`Wharton & Garrison LLP, Washington, D.C.; Theodore V.
`Wells Jr., Daniel J. Toal, and Jaren Janghorbani, Paul Weiss
`Rifkind Wharton & Garrison LLP, New York, New York; M.
`Randall Oppenheimer and Dawn Sestito, O’Melveny &
`Myers LLP, Los Angeles, California; for Defendant-
`Appellant Exxon Mobil Corporation.
`
`Daniel B. Levin, Munger Tolles & Olson LLP, Los Angeles,
`California; Jerome C. Roth and Elizabeth A. Kim, Munger
`Tolles & Olson LLP, San Francisco, California; David C.
`Frederick and Brendan J. Crimmins, Kellogg Hansen Todd
`Figel & Frederick P.L.L.C., Washington, D.C.; for
`Defendant-Appellee Royal Dutch Shell PLC.
`
`Jonathan W. Hughes, Arnold & Porter Kaye Scholer LLP,
`San Francisco, California; Matthew T. Heartney and John D.
`Lombardo, Arnold & Porter Kaye Scholer LLP, Los Angeles,
`
`

`

`CITY OF OAKLAND V. BP
`
`6 C
`
`alifornia; Philip H. Curtis and Nancy Milburn, Arnold
`Porter Kaye Scholer LLP, New York, New York; for
`Defendant-Appellee for BP PLC.
`
`Sean C. Grimsley and Jameson R. Jones, Bartlit Beck LLP,
`Denver, Colorado; Megan R. Nishikawa and Nicholas A.
`Miller-Stratton, King & Spalding LLP, San Francisco,
`California; Tracie J. Renfroe and Carol M. Wood, King &
`Spalding LLP, Houston, Texas; for Defendant-Appellant
`ConocoPhillips.
`
`Jonathan Brightbill (argued) and Eric Grant, Deputy Assistant
`Attorneys General; Robert J. Lundman, R. Justin Smith, and
`Christine W. Ennis, Trial Attorneys; Environment and
`Natural Resources Division, United States Department of
`Justice, Washington, D.C.; for Amicus Curiae United States.
`
`Michael Burger, Morningside Heights Legal Services, Inc.,
`New York, New York, for Amici Curiae National League of
`Cities, U.S. Conference of Mayors, and International
`Municipal Lawyers Association.
`
`Michael R. Lozeau and Richard T. Drury, Lozeau Drury LLP,
`Oakland, California, for Amici Curiae Conflict of Laws and
`Foreign Relations Law Scholars.
`
`Gerson H. Smoger, Smoger & Associates P.C., Dallas, Texas;
`Robert S. Peck, Center for Constitutional Litigation P.C.,
`Washington, D.C.; for Amici Curiae Senators Sheldon
`Whitehouse, Dianne Feinstein, Richard Blumenthal, Mazie K.
`Hirono, Edward J. Markey, and Kamala D. Harris.
`
`

`

`CITY OF OAKLAND V. BP
`
`7
`
`Seth Davis, Berkeley, California; Ruthanne M. Deutsch and
`Hyland Hunt, Deutsch Hunt PLLC, Washington, D.C.; for
`Amici Curiae Legal Scholars.
`
`John W. Keker, Matthew Werdegar, and Dan Jackson, Keker
`Van Nest & Peters LLP, San Francisco, California; Harold
`Hongju Koh and Conor Dwyer Reynolds, Rule of Law Clinic,
`Yale Law School, New Haven, Connecticut; for Amici Curiae
`Former U.S. Government Officials.
`
`James R. Williams, County Counsel; Greta S. Hansen, Chief
`Assistant County Counsel; Laura S. Trice, Lead Deputy
`County Counsel; Tony LoPresti, Deputy County Counsel;
`Office of County Counsel, County of Santa Clara, San José,
`California; for Amicus Curiae California State Association of
`Counties.
`
`Daniel P. Mensher and Alison S. Gaffney, Keller Rohrback
`L.L.P., Seattle, Washington, for Amici Curiae Robert Brulle,
`Center for Climate Integrity, Justin Farrell, Benjamin Franta,
`Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran,
`and Union of Concerned Scientists.
`
`Kenneth L. Adams, Adams Holcomb LLP, Washington, D.C.;
`William A. Rossbach, Rossbach Law PC, Missoula,
`Montana; for Amici Curiae Mario J. Molina, Michael
`Oppenheimer, Bob Kopp, Friederike Otto, Susanne C. Moser,
`Donald J. Wuebbles, Gary Griggs, Peter C. Frumhoff, and
`Kristina Dahl.
`
`Ian Fein, Natural Resources Defense Council, San Francisco,
`California; Peter Huffman, Natural Resources Defense
`Council, Washington, D.C.; for Amicus Curiae Natural
`Resources Defense Council.
`
`

`

`CITY OF OAKLAND V. BP
`
`8 X
`
`avier Becerra, Attorney General; Sally Magnani, Senior
`Assistant Attorney General; David A. Zonana, Supervising
`Deputy Attorney General; Erin Ganahl and Heather Leslie,
`Deputy Attorneys General; Attorney General’s Office,
`Sacramento, California; William Tong, Brian E. Frosh, Keith
`Ellison, Gurbir S. Grewal, Letitia James, Ellen F. Rosenblum;
`Peter F. Neronha, Thomas J. Donovan Jr., Robert W.
`Ferguson, and Karl A. Racine, Attorneys General; for Amici
`Curiae States of California, Connecticut, Maryland,
`Minnesota, New Jersey, New York, Oregon, Rhode Island,
`Vermont, and Washington, and the District of Columbia.
`
`Steven P. Lehotsky, Michael B. Schon, and Jonathan D.
`Urick, U.S. Chamber Litigation Center, Washington, D.C.;
`Peter D. Keisler, C. Frederick Beckner III, Ryan C. Morris,
`and Tobias S. Loss-Eaton, Sidley Austin LLP, Washington,
`D.C.; Zachary D. Tripp and Lauren E. Morris, Weil Gotshal
`& Manges LLP, Washington, D.C.; Sarah M. Sternlieb, Weil
`Gotshal & Manges LLP, New York, New York; for Amicus
`Curiae Chamber of Commerce of the United States of
`America.
`
`Corbin K. Barthold and Cory L. Andrews, Washington Legal
`Foundation, Washington, D.C.,
`for Amicus Curiae
`Washington Legal Foundation.
`
`Philip S. Goldberg and Christopher E. Appel, Shook Hardy
`& Bacon LLP, Washington, D.C.; Linda E. Kelly and Peter
`C. Tolsdorf, Manufacturers’ Center for Legal Action,
`Washington, D.C.; for Amicus Curiae National Association
`of Manufacturers.
`
`Curtis T. Hill, Jr., Attorney General; Thomas M. Fisher,
`Solicitor General; Kian J. Hudson, Deputy Solicitor General;
`
`

`

`CITY OF OAKLAND V. BP
`
`9
`
`Julia C. Payne and Robert Rowlett, Deputy Attorneys
`General; Office of the Attorney General, Indianapolis,
`Indiana; Steve Marshall, Kevin G. Clarkson, Leslie Rutledge,
`Christopher M. Carr, Derek Schmidt, Jeff Landry, Eric
`Schmitt, Tim Fox, Doug Peterson, Wayne Stenehjem, Dave
`Yost, Mike Hunter, Alan Wilson, Jason R. Ravnsborg, Ken
`Paxton, Sean Reyes, Patrick Morrissey, and Bridget Hill,
`Attorneys General; for Amici Curiae States of Indiana,
`Alabama, Alaska, Arkansas, Georgia, Kansas, Louisiana,
`Missouri, Montana, Nebraska, North Dakota, Ohio,
`Oklahoma, South Carolina, South Dakota, Texas, Utah, West
`Virginia, and Wyoming.
`
`Raymond A. Cardozo and David J. de Jesus, Reed Smith
`LLP, San Francisco, California; Richard A. Epstein, Chicago,
`Illinois; for Amici Curiae Professors Richard A. Epstein,
`Jason Scott Johnston, and Henry N. Butler.
`
`

`

`10
`
`CITY OF OAKLAND V. BP
`
`ORDER
`
`The opinion filed on May 26, 2020, appearing at 960 F.3d
`570 (9th Cir. 2020), is amended as follows:
`
`At page 585, footnote 12, replace:
`
`<The district court requested supplemental briefing on
`how the concept of the “‘navigable waters of the United
`States’ . . . relates to the removal jurisdiction issue in th[e]
`case.” As the Cities pointed out, however, the Energy
`Companies waived any argument related to admiralty
`jurisdiction by not invoking it in their notices of removal.
`See 28 U.S.C. § 1446(a) (notice of removal must “contain[]
`a short and plain statement of the grounds for removal”);
`ARCO, 213 F.3d at 1117 (notice of removal “cannot be
`amended to add a separate basis for removal jurisdiction after
`the thirty day period” (citation omitted)); O’Halloran,
`856 F.2d at 1381 (same). Thus, the district court should
`confine its analysis to the bases for jurisdiction asserted in the
`notices of removal.>
`
`with
`
`<The Energy Companies identified six alternate bases for
`subject-matter jurisdiction in their notices of removal. See
`supra note 2. On appeal, the Energy Companies identified
`admiralty jurisdiction, 28 U.S.C. § 1333, as a seventh
`alternate basis for jurisdiction. As the Cities point out,
`however, the Energy Companies waived any argument related
`to admiralty jurisdiction by not invoking it in their notices of
`removal. See 28 U.S.C. § 1446(a) (notice of removal must
`“contain[] a short and plain statement of the grounds for
`removal”); ARCO, 213 F.3d at 1117 (notice of removal
`
`

`

`CITY OF OAKLAND V. BP
`
`11
`
`“cannot be amended to add a separate basis for removal
`jurisdiction after the thirty day period” (citation omitted));
`O’Halloran, 856 F.2d at 1381 (same). Because the deadline
`for amending the notices of removal has passed, the Energy
`Companies may not rely on admiralty jurisdiction as a basis
`for removal on remand. Moreover, the Energy Companies’
`related argument that there is federal-question jurisdiction,
`28 U.S.C. § 1331, because “the instrumentality of the alleged
`harm is the navigable waters of the United States,” fails for
`the reasons set forth in Part II, supra.>
`
`***
`
`With this amendment, the panel has unanimously voted
`to deny Defendants-Appellees’ Petition for Panel Rehearing
`and/or Rehearing En Banc (ECF No. 175).
`
`The full court has been advised of the Petition for Panel
`Rehearing and/or Rehearing En Banc, and no Judge has
`requested a vote on whether to rehear the matter en banc.
`Fed. R. App. P. 35.
`
`The Petition for Panel Rehearing and/or Rehearing En
`Banc is DENIED. No further petitions for rehearing or
`rehearing en banc may be filed.
`
`OPINION
`
`IKUTA, Circuit Judge:
`
`Two California cities brought actions in state court
`alleging that the defendants’ production and promotion of
`
`

`

`12
`
`CITY OF OAKLAND V. BP
`
`fossil fuels is a public nuisance under California law, and the
`defendants removed the complaints to federal court. We hold
`that the state-law claim for public nuisance does not arise
`under federal law for purposes of 28 U.S.C. § 1331, and we
`remand to the district court to consider whether there was an
`alternative basis for subject-matter jurisdiction.
`
`I
`
`In September 2017, the city attorneys for the City of
`Oakland and the City and County of San Francisco filed
`complaints in California state court asserting a California
`public-nuisance claim against five of the world’s largest
`energy companies:
` BP p.l.c., Chevron Corporation,
`ConocoPhillips, Exxon Mobil Corporation, and Royal Dutch
`Shell plc.1 The complaints claim that the defendants are
`liable for causing or contributing to a public nuisance under
`California law. See Cal. Civ. Code §§ 3479, 3480, 3491,
`3494; Cal. Civ. Proc. Code § 731. We refer to the plaintiffs
`collectively as the “Cities” and to the defendants collectively
`as the “Energy Companies.”
`
`According to the complaints, the Energy Companies’
`“production and promotion of massive quantities of fossil
`fuels” caused or contributed to “global warming-induced sea
`level rise,” leading to coastal flooding of low-lying
`shorelines, increased shoreline erosion, salt-water impacts on
`the Cities’ wastewater treatment systems, and interference
`with stormwater infrastructure, among other injuries. The
`
`1 Under California law, a city attorney may bring an action to abate
`a public nuisance “in the name of the people of the State of California,”
`Cal. Civ. Proc. Code § 731, and so the complaints were brought in the
`name of the people of the State of California, acting by and through the
`city attorneys of Oakland and San Francisco.
`
`

`

`CITY OF OAKLAND V. BP
`
`13
`
`complaints further allege that the Cities are incurring costs to
`abate these harms and expect the injuries will become more
`severe over the next 80 years. Accordingly, the Cities seek
`an order of abatement requiring the Energy Companies to
`fund a “climate change adaptation program” for Oakland and
`San Francisco “consisting of the building of sea walls, raising
`the elevation of low-lying property and buildings and
`building such other infrastructure as is necessary for [the
`Cities] to adapt to climate change.”
`
`In October 2017, the Energy Companies removed the
`Cities’ complaints to federal court. The Energy Companies
`identified seven different grounds for subject-matter
`jurisdiction in their notices of removal, including that the
`Cities’ public-nuisance claim was governed by federal
`common law because the claim implicates “uniquely federal
`interests.”2 After removal, the cases were assigned to the
`same district judge, Judge William H. Alsup.3
`
`2 The notice of removal also asserted that the complaints are
`removable because the Cities’ claim: (1) raises disputed and substantial
`federal issues, see Grable & Sons Metal Prods., Inc v. Darue Eng’g &
`Mfg., 545 U.S. 308 (2005); (2) is “completely preempted” by federal law;
`(3) arises out of operations on the outer Continental Shelf, see 43 U.S.C.
`§ 1349(b); (4) implicates actions that the Energy Companies took
`“pursuant to a federal officer’s directions,” see 28 U.S.C. § 1442(a)(1);
`(5) arose on “federal enclaves”; and (6) is related to bankruptcy cases, see
`28 U.S.C. §§ 1334(b), 1452(a).
`
`3 Other cities and counties in California filed similar cases against the
`Energy Companies and a number of other energy companies. Those cases
`were filed in California state court and removed to federal court, where
`they were assigned to Judge Vince G. Chhabria. Judge Chhabria
`remanded those cases to state court based on a lack of subject-matter
`jurisdiction. See Cty. of San Mateo v. Chevron Corp., 294 F. Supp. 3d
`934, 939 (N.D. Cal. 2018). We resolve the appeal from that remand order
`in a concurrently filed opinion. See Cty. of San Mateo v. Chevron Corp.,
`
`

`

`14
`
`CITY OF OAKLAND V. BP
`
`The Cities moved to remand the cases to state court on the
`ground
`that
`the district court
`lacked subject-matter
`jurisdiction. The district court denied the motion, concluding
`that it had federal-question jurisdiction under 28 U.S.C.
`§ 1331 because the Cities’ claim was “necessarily governed
`by federal common law.” The district court reasoned that the
`Cities’ public-nuisance claim raised issues relating to
`“interstate and
`international disputes
`implicating
`the
`conflicting rights of States or . . . relations with foreign
`nations” and that these issues had to be resolved pursuant to
`a uniform federal standard.
`
`In response to the district court’s ruling, the Cities
`amended their complaints to include a public-nuisance claim
`under federal common law.4 The amended complaints stated
`that the federal claim was added “to conform to the [district
`court’s] ruling” and that the Cities “reserve[d] all rights with
`respect to whether jurisdiction [is] proper in federal court.”
`The Energy Companies moved to dismiss the amended
`complaints.
`
`In June 2018, the district court held that the amended
`complaints failed “to state a claim upon which relief can be
`granted.” Fed. R. Civ. P. 12(b)(6). The district court first
`determined that it would be inappropriate to extend federal
`common law to provide relief because “federal courts should
`exercise great caution before fashioning federal common law
`in areas touching on foreign affairs,” and the Cities’ claims
`
`— F.3d — (9th Cir. 2020).
`
`4 The Cities added the City of Oakland and the City and County of
`San Francisco as plaintiffs because federal law, unlike California law,
`does not allow a city attorney to bring a public-nuisance action in federal
`court in the name of the people of the State of California.
`
`

`

`CITY OF OAKLAND V. BP
`
`15
`
`“implicate[d] the interests of countless governments, both
`foreign and domestic.” The district court then dismissed the
`state-law claim on the ground that it “must stand or fall under
`federal common law.” The district court therefore dismissed
`the amended complaints for failure to state a claim. On the
`same day, the district court requested a joint statement from
`the parties regarding whether it was necessary to reach the
`pending motions to dismiss for lack of personal jurisdiction.
`See Fed. R. Civ. P. 12(b)(2). After BP, ConocoPhillips,
`Exxon, and Shell requested a ruling on the issue, the district
`court ruled that it lacked personal jurisdiction over those
`defendants and dismissed them. The district court then
`entered judgments in favor of the Energy Companies and
`against the Cities.
`
`The Cities appeal the denial of their motions to remand,
`the dismissal of their complaints for failure to state a claim,
`and the district court’s personal-jurisdiction ruling. We have
`jurisdiction under 28 U.S.C. § 1291. We review questions of
`statutory construction and subject-matter jurisdiction de novo.
`Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1315 (9th Cir.
`1998). “[S]tatutes extending federal jurisdiction . . . are
`narrowly construed so as not to reach beyond the limits
`intended by Congress.” Phillips v. Osborne, 403 F.2d 826,
`828 (9th Cir. 1968).
`
`II
`
`We first consider the Cities’ argument that the district
`court erred in determining that it had federal-question
`jurisdiction under 28 U.S.C. § 1331. In undertaking this
`analysis, we consider only “the pleadings filed at the time of
`removal without reference to subsequent amendments.”
`
`

`

`16
`
`CITY OF OAKLAND V. BP
`
`Provincial Gov’t of Marinduque v. Placer Dome, Inc.,
`582 F.3d 1083, 1085 n.1 (9th Cir. 2009) (citation omitted).
`
`A
`
`Federal-question jurisdiction stems from a congressional
`enactment, 28 U.S.C. § 1331, which provides that “[t]he
`district courts shall have original jurisdiction of all civil
`actions arising under the Constitution, laws, or treaties of the
`United States.” The scope of this statutory grant of
`jurisdiction is a matter of congressional intent, and the
`Supreme Court has determined that Congress conferred “a
`more limited power” than the full scope of judicial power
`accorded in the Constitution. Merrell Dow Pharm. Inc. v.
`Thompson, 478 U.S. 804, 807 (1986).5 The general rule,
`referred to as the “well-pleaded complaint rule,” is that a civil
`action arises under federal law for purposes of § 1331 when
`a federal question appears on the face of the complaint.
`Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).
`Because federal jurisdiction “depends solely on the plaintiff’s
`claims for relief and not on anticipated defenses to those
`claims,” ARCO Envtl. Remediation, L.L.C. v. Dep’t of Health
`& Envtl. Quality of Mont., 213 F.3d 1108, 1113 (9th Cir.
`2000), “a case may not be removed to federal court on the
`basis of a federal defense, including the defense of pre-
`emption, even if the defense is anticipated in the plaintiff’s
`
`5 Article III of the Constitution provides that “[t]he judicial Power
`shall extend to all Cases, in Law and Equity, arising under this
`Constitution, the Laws of the United States, and Treaties made, or which
`shall be made, under their Authority.” U.S. Const. art. III, § 2. “[T]he
`constitutional meaning of ‘arising under’ may extend to all cases in which
`a federal question is ‘an ingredient’ of the action.” Merrell Dow Pharm.,
`478 U.S. at 807 (quoting Osborn v. Bank of U.S., 22 U.S. (9 Wheat.) 738,
`823 (1824)).
`
`

`

`CITY OF OAKLAND V. BP
`
`17
`
`complaint, and even if both parties concede that the federal
`defense is the only question truly at issue,” Caterpillar,
`482 U.S. at 393. Therefore, as the “master of the claim,” the
`plaintiff can generally “avoid federal jurisdiction by exclusive
`reliance on state law.” Id. at 392.
`
`There are a few exceptions to the well-pleaded-complaint
`rule, however.
`
`1
`
`First, in a line of cases, beginning with Northern Pacific
`Railway Co. v. Soderberg, 188 U.S. 526 (1903), and
`extending most recently to Grable & Sons Metal Products,
`Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308
`(2005), the Supreme Court has recognized a “special and
`small category” of state-law claims that arise under federal
`law for purposes of § 1331 “because federal law is ‘a
`necessary element of the . . . claim for relief.’” Empire
`Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 699
`(2006) (citation omitted). Only a few cases have fallen into
`this “slim category,” id. at 701, including: (1) a series of
`quiet-title actions from the early 1900s that involved disputes
`as to the interpretation and application of federal law, see
`Hopkins v. Walker, 244 U.S. 486, 489 (1917) (federal
`jurisdiction was proper because “it [was] plain” that the case
`involved “a controversy respecting the construction and effect
`of” federal mining laws); Wilson Cypress Co. v. Pozo,
`236 U.S. 635, 642–43 (1915) (federal jurisdiction was proper
`because the plaintiffs relied “upon [a] treaty with Spain and
`laws of the United States . . . to defeat [the] defendant’s claim
`of title”); Soderberg, 188 U.S. at 528 (federal jurisdiction was
`proper because the plaintiff’s claim“depend[ed] upon the
`proper construction of an act of Congress”); (2) a shareholder
`
`

`

`18
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`CITY OF OAKLAND V. BP
`
`action seeking to enjoin a Missouri corporation from
`investing in federal bonds on the ground that the federal act
`pursuant
`to which
`the bonds were
`issued was
`unconstitutional, see Smith v. Kan. City Title & Tr. Co.,
`255 U.S. 180, 201 (1921); and (3) a state-quiet title action
`claiming that property had been unlawfully seized by the
`Internal Revenue Service (IRS) because the notice of the
`seizure did not comply with the Internal Revenue Code, see
`Grable, 545 U.S. at 311. In other cases where parties have
`sought to invoke federal jurisdiction for state-law claims, the
`Court has concluded that jurisdiction was lacking, even when
`the claims were premised on violations of federal law, see
`Merrell Dow Pharm., 478 U.S. at 805–07; Moore v.
`Chesapeake & Ohio Ry. Co., 291 U.S. 205, 210 (1934),
`required remedies “contemplated by a federal statute,”
`Empire Healthchoice, 547 U.S. at 690, or required the
`interpretation and application of a federal statute in a
`hypothetical case underlying a legal malpractice claim, see
`Gunn v. Minton, 568 U.S. 251, 259 (2013).
`
`The Court has articulated a test for deciding when this
`exception to the well-pleaded-complaint rule applies. As
`explained in Grable and later in Gunn, federal jurisdiction
`over a state-law claim will lie if a federal issue is
`“(1) necessarily raised, (2) actually disputed, (3) substantial,
`and (4) capable of resolution in federal court without
`disrupting the federal-state balance approved by Congress.”
`Gunn, 568 U.S. at 258 (citing Grable, 545 U.S. at 314). All
`four requirements must be met for federal jurisdiction to be
`proper. Id.
`
`The Court has often focused on the third requirement, the
`question whether a case “turn[s] on substantial questions of
`federal law.” Grable, 545 U.S. at 312. This inquiry focuses
`
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`

`CITY OF OAKLAND V. BP
`
`19
`
`on the importance of a federal issue “to the federal system as
`a whole.” Gunn, 568 U.S. at 260. An issue has such
`importance when it raises substantial questions as to the
`interpretation or validity of a federal statute, see Smith,
`255 U.S. at 201; Hopkins, 244 U.S. at 489–90, or when it
`challenges the functioning of a federal agency or program,
`see Grable, 545 U.S. at 315 (holding there was federal
`jurisdiction to address an action challenging the IRS’s ability
`to satisfy tax delinquencies by seizing and disposing of
`property); cf. Bennett v. Sw. Airlines Co., 484 F.3d 907, 911
`(7th Cir. 2007) (holding that federal jurisdiction was lacking
`because, among other reasons, the plaintiffs did not
`“challenge the validity of any federal agency’s or employee’s
`action”). Moreover, an issue may qualify as substantial when
`it is a “pure issue of law,” Empire Healthchoice, 547 U.S.
`at 700 (citation omitted), that directly draws into question
`“the constitutional validity of an act of Congress,” Smith,
`255 U.S. at 201, or challenges the actions of a federal agency,
`see Grable, 545 U.S. at 310, and a ruling on the issue is “both
`dispositive of the case and would be controlling in numerous
`other cases,” Empire Healthchoice, 547 U.S. at 700 (citing
`Grable, 545 U.S. at 313). By contrast, a federal issue is not
`substantial if it is “fact-bound and situation-specific,” see id.
`at 701, or raises only a hypothetical question unlikely to
`affect interpretations of federal law in the future, see Gunn,
`568 U.S. at 261. A federal issue is not substantial merely
`because of its novelty, see id. at 262, or because it will further
`a uniform interpretation of a federal statute, see Merrell Dow
`Pharm., 478 U.S. at 815–16.
`
`2
`
`A second exception to the well-pleaded-complaint rule is
`referred to as the “artful-pleading doctrine.” This doctrine
`
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`

`20
`
`CITY OF OAKLAND V. BP
`
`“allows removal where federal law completely preempts a
`plaintiff’s state-law claim,” Rivet v. Regions Bank of La.,
`522 U.S. 470, 475 (1998), meaning that “the pre-emptive
`force of the statute is so ‘extraordinary’ that it ‘converts an
`ordinary state common-law complaint into one stating a
`federal claim for purposes of the well-pleaded complaint
`rule,’” Caterpillar, 482 U.S. at 393 (quoting Metro. Life Ins.
`Co. v. Taylor, 481 U.S. 58, 65 (1987)). To have this effect,
`a federal statute must “provide[] the exclusive cause of action
`for the claim asserted and also set forth procedures and
`remedies governing that cause of action.” Beneficial Nat’l
`Bank v. Anderson, 539 U.S. 1, 8 (2003).
`
`The Supreme Court has identified only three statutes that
`meet this criteria: (1) § 301 of the Labor Management
`Relations Act (the LMRA), 29 U.S.C. § 185, which
`“displace[s] entirely any state cause of action ‘for violation of
`contracts between an employer and a labor organization,’”
`Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Tr.
`for S. Cal., 463 U.S. 1, 23 (1983) (citation omitted);
`(2) § 502(a) of the Employee Retirement Income Security Act
`of 1974 (ERISA), 29 U.S.C. § 1132(a), which preempts state-
`law claims asserting improper processing of a claim for
`benefits under an employee-benefit plan regulation by
`ERISA, Metro. Life Ins., 481 U.S. at 65–66; and (3) §§ 85
`and 86 of the National Bank Act, 12 U.S.C. §§ 85, 86, which
`provide the “exclusive cause of action for usury claims
`against national banks,” Beneficial Nat’l Bank, 539 U.S. at 9.
`In light of these cases, we have held that complete
`preemption for purposes of federal jurisdiction under § 1331
`exists when Congress: (1) intended to displace a state-law
`cause of action, and (2) provided a substitute cause of action.
`Hansen v. Grp. Health Coop., 902 F.3d 1051, 1057 (9th Cir.
`2018) (citing Beneficial Nat’l Bank, 539 U.S. at 8); accord
`
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`

`CITY OF OAKLAND V. BP
`
`21
`
`Hunter v. United Van Lines, 746 F.2d 635, 642–43 (9th Cir.
`1984).
`
`B
`
`We now consider whether the district court erred in
`concluding it had jurisdiction over the Cities’ complaints
`under § 1331. At the time of removal, each complaint
`asserted only a single cause of action for public nuisance
`under California law. Under the well-pleaded-complaint rule,
`the district court lacked federal-question jurisdiction unless
`one of the two exceptions to the well-pleaded-complaint rule
`applies.
`
`1
`
`We first consider whether the Cities’ state-law claim for
`public nuisance falls within the “special and small category”
`of state-law claims that arise under federal law. Empire
`Healthchoice,