(Reuters) – U.S. Supreme Court justices wrestled on Monday over whether lawsuits by Louisiana officials seeking to hold oil and gas companies, including Chevron and Exxon Mobil, responsible for harming the state’s coast should be moved out of the Bayou State’s courthouses and into federal court.
The justices during a little more than an hour of oral arguments took up a narrow but crucial issue that will shape the outcome of more than 40 lawsuits filed more than a decade ago by several Louisiana coastal parishes and the state’s attorney general seeking billions of dollars from energy companies to cover restoration and remediation costs.
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The stakes are high for the companies, as a Louisiana jury in April 2025 found Chevron owed $744.6 million to Plaquemines Parish, a fact Chevron’s lawyer, Paul Clement, cited in arguing against state court jurisdiction. The court took up the question in one of the lawsuits, which was brought by Plaquemines and Cameron parishes, but the outcome would impact the other cases as well. Clement said the lawsuits belong in federal court — a venue generally seen as more favorable to corporate defendants — as they relate to activities undertaken to fulfill U.S. government refinery contracts during World War Two.
He pointed to a statute that grants federal jurisdiction over lawsuits against anyone acting under a federal officer, such as a contractor, “for or relating to any act under color of such office.” The “relating to” language was added in 2011, which Clement said broadened the standard in Chevron’s favor. A 2-1 panel of the New Orleans-based 5th U.S. Circuit Court of Appeals rejected that argument in 2024 when it held that the companies’ oil exploration and production activities were unrelated to the companies’ contracted refining operations. Louisiana Solicitor General Ben Aguinaga said that decision should be upheld to allow the litigation to proceed in state court. The lawsuits, which were filed in 2013, accuse the companies of violating Louisiana’s State and Local Coastal Resources Management Act, which took effect in 1980, by failing to obtain necessary coastal use permits or by violating the terms of permits.
“They do not dispute that they dumped billions of gallons of produced water from oil wells directly into our marsh, both before and after 1980,” Aguinaga said. “That’s why this is such a massive deal for the state of Louisiana.”
“Produced water” refers to a byproduct caused by oil and gas extraction.
‘BUTTERFLY EFFECT’
Members of the court’s liberal wing, as well as some in its 6-3 conservative majority questioned the scope of the 2011 amendment and where to draw the line in interpreting the broad “relating” language, which could be relied upon potentially by other government contractors in future cases.
“You’re right, obviously, that ‘relating to’ is very broad, but it’s hard to see where you stop,” conservative Chief Justice John Roberts told Clement. “I mean, is it a butterfly effect? A butterfly flaps its wings and has the end result halfway around the world.”
Liberal Justice Ketanji Brown Jackson noted that Congress had in adopting the 2011 amendment indicated it viewed the “relating to” as a minor tweak meant to conform the statute to a different more substantive amendment that was not pertinent to the case. “I’m a little worried about the suggestion that this is a substantial change in light of Congress’ statutory statement that this is a conforming amendment,” she said.
Conservative Justice Samuel Alito did not participate in the arguments after recusing himself less than a week ago as a result of his investments in ConocoPhillips, which has a subsidiary that is a party in the state court litigation.
Backing the companies’ appeal was President Donald Trump’s administration, despite normally being closely allied with Louisiana’s Republican leadership.
Assistant Solicitor General Aaron Roper said that “by assisting the federal government in obtaining a critical wartime product under federal supervision, petitioners acted under a federal officer.”
Conservative Justice Brett Kavanaugh appeared among those most open to that argument, telling Clement there “seems to be a concern about the fairness of the state court system that underlies your position in this case.”
“What is that concern?” he asked.
Clement responded by citing concerns about the makeup of the local jury pool and the “value in having your case litigated in a forum that respects the federal authority.”
“We’re not saying that they don’t get their chance to prove their case in court,” he said. “It just has to be proven in a federal court.”
A decision is expected by June.
The case is Chevron USA Incorporated, et al., v. Plaquemines Parish, et al., U.S. Supreme Court, No. 24-813.
For Chevron: Paul Clement of Clement & Murphy
For Louisiana: Solicitor General Ben Aguinaga For the U.S. government: Assistant Solicitor General Aaron Roper
Reporting by Nate Raymond in Boston
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