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Mayor and City Council of Balt v. BP P.L.C., 19-1644 (2020)

Court: Court of Appeals for the Fourth Circuit Number: 19-1644 Visitors: 17
Filed: Mar. 06, 2020
Latest Update: Mar. 09, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 19-1644 MAYOR AND CITY COUNCIL OF BALTIMORE, Plaintiff – Appellee, v. BP P.L.C.; BP AMERICA, INC.; BP PRODUCTS NORTH AMERICA, INC.; CROWN CENTRAL LLC; CROWN CENTRAL NEW HOLDINGS LLC; CHEVRON CORP.; CHEVRON U.S.A. INC.; EXXON MOBIL CORP.; EXXONMOBIL OIL CORPORATION; ROYAL DUTCH SHELL, PLC; SHELL OIL COMPANY; CITGO PETROLEUM CORP.; CONOCOPHILLIPS; CONOCOPHILLIPS COMPANY; PHILLIPS 66; MARATHON OIL COMPANY; MARATHON OIL CORPORATION;
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                                         PUBLISHED

                           UNITED STATES COURT OF APPEALS
                               FOR THE FOURTH CIRCUIT


                                          No. 19-1644


MAYOR AND CITY COUNCIL OF BALTIMORE,

                        Plaintiff – Appellee,

                v.

BP P.L.C.; BP AMERICA, INC.; BP PRODUCTS NORTH AMERICA, INC.;
CROWN CENTRAL LLC; CROWN CENTRAL NEW HOLDINGS LLC;
CHEVRON CORP.; CHEVRON U.S.A. INC.; EXXON MOBIL CORP.;
EXXONMOBIL OIL CORPORATION; ROYAL DUTCH SHELL, PLC; SHELL
OIL COMPANY; CITGO PETROLEUM CORP.; CONOCOPHILLIPS;
CONOCOPHILLIPS COMPANY; PHILLIPS 66; MARATHON OIL COMPANY;
MARATHON       OIL  CORPORATION;     MARATHON    PETROLEUM
CORPORATION; SPEEDWAY LLC; HESS CORP.; CNX RESOURCES
CORPORATION; CONSOL ENERGY, INC.; CONSOL MARINE TERMINALS
LLC,

                        Defendants – Appellants,

                and

LOUISIANA LAND & EXPLORATION CO.; PHILLIPS 66 COMPANY;
CROWN CENTRAL PETROLEUM CORPORATION,

                        Defendants.

--------------------------------

CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA,

                        Amicus Supporting Appellants.

NATIONAL LEAGUE OF CITIES; U.S. CONFERENCE OF MAYORS;
INTERNATIONAL MUNICIPAL LAWYERS ASSOCIATION; PUBLIC
CITIZEN, INC.; SHELDON WHITEHOUSE; EDWARD J. MARKEY; STATE OF
MARYLAND; STATE OF CALIFORNIA; STATE OF CONNECTICUT; STATE
OF NEW JERSEY; STATE OF NEW YORK; STATE OF OREGON; STATE OF
RHODE ISLAND; STATE OF VERMONT; STATE OF WASHINGTON; MARIO
J. MOLINA; MICHAEL OPPENHEIMER; BOB KOPP; FRIEDERIKE OTTO;
SUSANNE C. MOSER; DONALD J. WUEBBLES; GARY GRIGGS; PETER C.
FRUMHOFF; KRISTINA DAHL; NATURAL RESOURCES DEFENSE
COUNCIL; ROBERT BRULLE; CENTER FOR CLIMATE INTEGRITY;
CHESAPEAKE CLIMATE ACTION NETWORK; JUSTIN FARRELL; BEN
FRANTA; STEPHAN LEWANDOWSKY; NAOMI ORESKES; GEOFFREY
SUPRAN; UNION OF CONCERNED SCIENTISTS,

                    Amici Supporting Appellee.



Appeal from the United States District Court for the District of Maryland, at Baltimore.
Ellen L. Hollander, District Judge. (1:18-cv-02357-ELH)


Argued: December 11, 2019                                      Decided: March 6, 2020


Before GREGORY, Chief Judge, and FLOYD and THACKER, Circuit Judges.


Affirmed by published opinion. Judge Floyd wrote the opinion in which Chief Judge
Gregory and Judge Thacker joined.


ARGUED: Theodore J. Boutrous, Jr., GIBSON, DUNN & CRUTCHER LLP, Los
Angeles, California, for Appellants. Victor Marc Sher, SHER EDLING LLP, San
Francisco, California, for Appellee. ON BRIEF: Joshua S. Lipshutz, Washington, D.C.,
Anne Champion, GIBSON, DUNN & CRUTCHER LLP, New York, New York; Ty Kelly,
Jonathan Biran, BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ,
P.C., Baltimore, Maryland, for Appellants Chevron Corporation and Chevron U.S.A., Inc.
John B. Isbister, Jaime W. Luse, TYDINGS & ROSENBERG LLP, Baltimore, Maryland;
Philip H. Curtis, Nancy G. Milburn, New York, New York, Matthew T. Heartney, John D.
Lombardo, ARNOLD & PORTER KAY SCHOLER LLP, Los Angeles, California, for
Appellants BP Products North America Inc., BP P.L.C., and BP America Inc. Craig A.
Thompson, VENABLE LLP, Baltimore, Maryland; Theodore V. Wells, Jr., Daniel J. Toal,
Jaren Janghorbani, New York, New York, Kannon Shanmugam, PAUL, WEISS,
RIFKIND, WHARTON, GARRISON LLP, Washington, D.C., for Appellants Exxon

                                           2
Mobil Corporation and ExxonMobile Oil Corporation. David C. Frederick, James M.
Webster, III, Brendan J. Crimmins, Grace W. Knofczynski, KELLOGG, HANSEN,
TODD, FIGEL & FREDERICK, P.L.L.C., Washington, D.C.; Daniel B. Levin, Los
Angeles, California, Jerome B. Roth, Elizabeth A. Kim, MUNGER, TOLLES & OLSON
LLP, San Francisco, California, for Shell Oil Company and Royal Dutch Shell, PLC.
Warren N. Weaver, Peter Sheehan, WHITEFORD TAYLOR AND PRESTON LLP,
Baltimore, Maryland; Nathan P. Eimer, Pamela R. Hanebutt, Ryan Walsh, Raphael Janove,
EIMER STAHL LLP, Chicago, Illinois, for Appellant Citgo Petroleum Corporation.
Michael A. Brown, NELSON MULLINS RILEY & SCARBOROUGH LLP, Baltimore,
Maryland; Sean C. Grimsley, Jameson R. Jones, BARTLIT BECK LLP, Denver, Colorado,
for Appellants ConocoPhillips and ConocoPhillips Company. Jonathan Chunwei Su,
LATHAM & WATKINS LLP, Washington, D.C., for Appellant Phillips 66. Steven M.
Bauer, Margaret A. Tough, LATHAM & WATKINS LLP, San Francisco, California, for
Appellants ConocoPhillips, ConocoPhillips Company, and Phillips 66. Shannon S.
Broome, San Francisco, California, Shawn Patrick Regan, New York, New York, Ann
Marie Mortimer, HUNTON ANDREWS KURTH LLP, Los Angeles, California, for
Appellants Marathon Petroleum Corp. and Speedway, LLC. Scott Janoe, Houston, Texas,
Megan Berge, Emily Wilson, BAKER BOTTS L.L.P., Washington, D.C., for Appellant
Hess Corp. Michelle N. Lipkowitz, Thomas K. Prevas, SAUL EWING ARNSTEIN &
LEHR LLP, Baltimore, Maryland, for Appellants Crown Central LLC and Crown Central
New Holdings LLC. Kathleen Taylor Sooy, Tracy Ann Roman, Washington, D.C., Honor
R. Costello, CROWELL & MORING LLP, New York, New York, for Appellants CNX
Resources Corporation, Consol Energy Inc., and Consol Marine Terminals LLC. Matthew
K. Edling, SHER EDLING LLP, San Francisco, California; Andre M. Davis, Suzanne
Sangree, BALTIMORE CITY LAW DEPARTMENT, Baltimore, Maryland, for Appellee.
Steven P. Lehotsky, Michael B. Schon, UNITED STATES CHAMBER LITIGATION
CENTER, Washington, D.C.; Peter D. Keisler, C. Frederick Beckner III, Ryan C. Morris,
Tobias S. Loss-Eaton, SIDLEY AUSTIN LLP, Washington, D.C., for Amicus Chamber of
Commerce of the United States of America. Michael Burger, Susan Kraham,
MORNINGSIDE HEIGHTS LEGAL SERVICES, INC., New York, New York, for Amici
The National League of Cities, The United States Conference of Mayors, and the
International Municipal Lawyers Association. Scott L. Nelson, Allison M. Zieve, PUBLIC
CITIZEN LITIGATION GROUP, Washington, D.C., for Amicus Public Citizen, Inc.
Gerson H. Smoger, SMOGER & ASSOCIATES, P.C., Dallas, Texas; Robert S. Peck,
CENTER FOR CONSTITUTIONAL LITIGATION, P.C., Washington, D.C., for Amici
Senators Sheldon Whitehouse and Edward J. Markey. Brian E. Frosh, Attorney General,
Joshua M. Segal, Special Assistant Attorney General, Steven J. Goldstein, Special
Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF
MARYLAND, Baltimore, Maryland, for Amicus State of Maryland. Xavier Becerra,
Attorney General, OFFICE OF THE ATTORNEY GENERAL OF CALIFORNIA,
Sacramento, California, for Amicus State of California. William Tong, Attorney General,
OFFICE OF ATTORNEY GENERAL OF CONNECTICUT, Hartford, Connecticut, for
Amicus State of Connecticut. Gurbir S. Grewal, Attorney General, OFFICE OF THE

                                          3
ATTORNEY GENERAL OF NEW JERSEY, Trenton, New Jersey, for Amicus State of
New Jersey. Letitia James, Attorney General, OFFICE OF THE ATTORNEY GENERAL
OF NEW YORK, Albany, New York, for Amicus State of New York. Ellen F. Rosenblum,
Attorney General, OREGON DEPARTMENT OF JUSTICE, Salem, Oregon, for Amicus
State of Oregon. Peter F. Neronha, Attorney General, OFFICE OF THE ATTORNEY
GENERAL OF RHODE ISLAND, Providence, Rhode Island, for Amicus State of Rhode
Island. Thomas J. Donovan, Attorney General, OFFICE OF THE ATTORNEY
GENERAL OF VERMONT, Montpelier, Vermont, for Amicus State of Vermont. Robert
W. Ferguson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF
WASHINGTON, Olympia, Washington, for Amicus State of Washington. William A.
Rossbach, ROSSBACH LAW, PC, Missoula, Montana, for Amici Mario J. Molina,
Michael Oppenheimer, Bob Kopp, Friederike Otto, Susanne C. Moser, Donald J.
Wuebbles, Gary Griggs, Peter C. Frumhoff, and Kristina Dahl. Peter Huffman,
NATURAL RESOURCES DEFENSE COUNCIL, Washington, D.C., for Amicus Natural
Resources Defense Council. Mark A. Griffin, Amy Williams-Derry, Daniel P. Mensher,
Alison S. Gaffney, KELLER ROHRBACK L.L.P., Seattle, Washington, for Amici Robert
Brulle, Center for Climate Integrity, The Chesapeake Climate Action Network, Justin
Farrell, Benjamin Franta, Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran, and
the Union of Concerned Scientists.




                                        4
FLOYD, Circuit Judge:

         This appeal is about whether a climate-change lawsuit against oil and gas companies

belongs in federal court. But this decision is only about whether one path to federal court

lies open. Because 28 U.S.C. § 1447(d) confines our appellate jurisdiction, the narrow

question before us is whether removal of this lawsuit is proper under 28 U.S.C. § 1442,

commonly referred to as the federal officer removal statute. And because we conclude that

§ 1442 does not provide a proper basis for removal, we affirm the district court’s remand

order.


                                              I.

         In July 2018, the Mayor and City of Baltimore (“Baltimore”) filed suit in Maryland

state court against twenty-six multinational oil and gas companies (“Defendants”) that it

says are partly responsible for climate change. 1 According to Baltimore, Defendants

substantially contributed to climate change by producing, promoting, and (misleadingly)

marketing fossil fuel products long after learning the dangers associated with them.

Specifically, Baltimore alleges that, despite knowing about the direct link between fossil


         1
       Defendants consist of BP entities (BP P.L.C., BP America, Inc., and BP Products
North America Inc.); Crown Central entities (Crown Central Petroleum Corporation,
Crown Central LLC, and Crown Central New Holdings LLC); Chevron entities (Chevron
Corp. and Chevron U.S.A. Inc.); Exxon Mobil entities (Exxon Mobil Corp. and
ExxonMobil Oil Corporation); Shell entities (Royal Dutch Shell PLC and Shell Oil
Company); Citgo Petroleum Corp.; ConocoPhillips entities (ConocoPhillips,
ConocoPhillips Company, Louisiana Land & Exploration Co., Phillips 66, and Phillips 66
Company); Marathon entities (Marathon Oil Company, Marathon Oil Corporation,
Marathon Petroleum Corporation, and Speedway LLC); Hess Corp.; and CONSOL entities
(CNX Resources Corporation, CONSOL Energy Inc., and CONSOL Marine Terminals
LLC).
                                              5
fuel use and global warming for nearly fifty years, Defendants have engaged in a

“coordinated, multi-front effort” to conceal that knowledge; have tried to discredit the

growing body of publicly available scientific evidence by championing sophisticated

disinformation campaigns; and have actively attempted to undermine public support for

regulation of their business practices, all while promoting the unrestrained and expanded

use of their fossil fuel products. See J.A. 43–47. As a result of Defendants’ conduct,

Baltimore avers that it has suffered various “climate change-related injuries,” J.A. 92,

including an increase in sea levels, storms, floods, heatwaves, droughts, and extreme

precipitation. So Baltimore sued Defendants to shift some of the costs of these injuries on

to them.

       The Complaint asserts eight causes of action, all founded on Maryland law: public

and private nuisance (Counts I–II); strict liability for failure to warn and design defect

(Counts III–IV); negligent design defect and failure to warn (Counts V–VI); trespass

(Count VII); and violations of the Maryland Consumer Protection Act, Md. Code, Com.

Law §§ 13-101 to 13-501 (Count VIII). As relief, Baltimore seeks monetary damages,

civil penalties, and equitable relief. It does not “seek to impose liability on Defendants for

their direct emissions of greenhouse gases” or to “restrain Defendants from engaging in

their business operations.” J.A. 47.

       Two Defendants, Chevron Corporation and Chevron U.S.A. Inc. (collectively,

“Chevron”), timely removed the case to the United States District Court for the District of

Maryland.



                                              6
       Before continuing, a brief introduction to the various grounds for removal is helpful.

Under 28 U.S.C. § 1441, the general removal statute, “any civil action brought in a State

court of which the district courts of the United States have original jurisdiction” may be

removed by the defendants “to the district court of the United States for the district and

division embracing the place where such action is pending.” 
Id. § 1441(a);
see also, e.g.,

28 U.S.C. § 1331 (conferring “original jurisdiction” over cases that “aris[e] under” federal

law). In addition, a civil action filed in state court may be removed to federal court if a

specialized removal provision applies, such as the bankruptcy removal statute, 28 U.S.C.

§ 1452, or, as pertinent here, the federal officer removal statute, 28 U.S.C. § 1442.

       In this case, Chevron asserted eight grounds for removal. Four of those grounds

were premised on federal-question jurisdiction under 28 U.S.C. § 1331. Chevron argued

that Baltimore’s claims arose under federal law within the meaning of § 1331 because they

(1) were governed by federal common law, rather than state law; (2) raised disputed and

substantial issues of federal law under Grable & Sons Metal Products, Inc. v. Darue

Engineering & Manufacturing, 
545 U.S. 308
(2005); (3) were completely preempted by

the Clean Air Act, 42 U.S.C. §§ 7401–7671q, as well as the foreign affairs doctrine; and

(4) were based on conduct or injuries that occurred on federal enclaves. The remaining

grounds relied on alternative jurisdictional and removal statutes, including: (1) the

jurisdictional grant in the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C.

§ 1349(b); (2) the admiralty jurisdiction statute, 28 U.S.C. § 1333; (3) the bankruptcy




                                             7
removal statute, 28 U.S.C. § 1452; and (4) the federal officer removal statute, 28 U.S.C.

§ 1442. 2

       Baltimore then moved to remand the case back to state court under 28 U.S.C.

§ 1447(c), which some Defendants opposed. 3 In its forty-five-page opinion granting

Baltimore’s remand motion, the district court rejected each of the eight theories asserted

by Defendants in support of removal. See generally BP P.L.C., 
388 F. Supp. 3d 538
.

       This timely appeal followed. Shortly after noticing their appeal, Defendants moved

the district court to stay the execution of the remand to state court pending this appeal. The

district court denied the motion, as did this Court. The Supreme Court likewise denied

Defendants’ application for a stay. See BP P.L.C. v. Mayor & City Council of Balt., 
140 S. Ct. 449
(2019) (mem.).




       2
          Because the OCSLA and admiralty statute are jurisdictional, Chevron relied upon
the general removal statute, § 1441(a), as the statutory hook for removal for these grounds
as well. As previously noted, the bankruptcy and federal officer statutes are specialized
removal provisions. The bankruptcy statute authorizes removal in cases over which the
district court has original jurisdiction per 28 U.S.C. § 1334, including in civil proceedings
that “aris[e] in or relate[] to cases under title 11.” See 28 U.S.C. § 1452(a). The federal
officer removal statute lies at the heart of this appeal and is discussed in greater detail in
Part III.
       3
         Five of the twenty-six Defendants did not oppose remand. See Mayor & City
Council of Balt. v. BP P.L.C., 
388 F. Supp. 3d 538
, 549 n.2 (D. Md. 2019) (noting that
three Defendants—Crown Central Petroleum Corp., Louisiana Land & Exploration Co.,
and Phillips 66 Company—appeared to have been improperly named in the Complaint, and
two others—Marathon Oil Company and Marathon Oil Corporation—did not join in the
opposition to remand).
                                              8
                                             II.

       As in all cases involving an appeal of a remand order, we must confront the

threshold question of our appellate jurisdiction.

       “The authority of appellate courts to review district-court orders remanding

removed cases to state court is substantially limited by statute,” namely, 28 U.S.C.

§ 1447(d). Powerex Corp. v. Reliant Energy Servs., Inc., 
551 U.S. 224
, 229 (2007). When

a remand is based on a lack of subject-matter jurisdiction, see Carlsbad Tech., Inc. v. HIF

Bio, Inc., 
556 U.S. 635
, 638 (2009), review of the remand order “on appeal or otherwise”

is typically barred—however “manifestly” and “inarguably erroneous” it may be, In re

Norfolk S. Ry., 
756 F.3d 282
, 287 (4th Cir. 2014) (internal quotation mark omitted)—unless

the case was removed pursuant to one of two specialized removal statutes. Specifically,

§ 1447(d) provides:

       An order remanding a case to the State court from which it was removed is
       not reviewable on appeal or otherwise, except that an order remanding a case
       to the State court from which it was removed pursuant to section 1442 or
       1443 of this title shall be reviewable by appeal or otherwise.

28 U.S.C. § 1447(d); see also 28 U.S.C. § 1442 (“Federal officers or agencies sued or

prosecuted”); 28 U.S.C. § 1443 (“Civil rights cases”).

       Therefore, as a matter of statutory interpretation, we must first determine the scope

of our appellate jurisdiction under § 1447(d) de novo. See Stone v. Instrumentation Lab.

Co., 
591 F.3d 239
, 242–43 (4th Cir. 2009). As explained below, we conclude that such

jurisdiction does not extend to the non-§ 1442 grounds that were considered and rejected

by the district court.


                                             9
       In Noel v. McCain, 
538 F.2d 633
(4th Cir. 1976), this Court held that when a case

is removed on several grounds, appellate courts lack jurisdiction to review any ground

other than the one specifically exempted from § 1447(d)’s bar on review. Thus, in that

case, we dismissed an appeal to the extent that it sought review of an order remanding a

case for “failure to raise federal questions.” 
Id. at 635.
“Jurisdiction to review remand of

a § 1441(a) removal,” we explained, “is not supplied by also seeking removal under

§ 1443(1).” 
Id. Because the
only ground for removal that is made reviewable by § 1447(d) here is

federal officer removal under § 1442, Noel teaches that our jurisdiction is confined to this

ground alone; it does not extend to the seven other grounds for removal raised by

Defendants, even though the district court rejected them in the same remand order.

       Notwithstanding our holding in Noel, Defendants insist that we have jurisdiction to

review the entire remand order. That is so, Defendants say, because Noel has been

effectively abrogated by the Supreme Court’s decision in Yamaha Motor Corp., U.S.A. v.

Calhoun, 
516 U.S. 199
(1996), as well as the Removal Clarification Act of 2011, Pub. L.

No. 112-51, 125 Stat. 545 (codified in scattered sections of 28 U.S.C.). They are wrong.

       We begin with Yamaha. There, the Supreme Court interpreted the word “order”

within the meaning of the interlocutory appeal statute, 28 U.S.C. § 1292(b). In particular,

the Court addressed whether, under § 1292(b), federal courts of appeals may exercise

jurisdiction over any question that is included within an order certified for interlocutory

appeal or, alternatively, whether such jurisdiction is limited to review of the controlling

question of law identified by the district court—i.e., the question that makes an

                                            10
interlocutory appeal appropriate in the first place. See 
Yamaha, 516 U.S. at 204
–05.

Section 1292(b) provides, in relevant part, that if a district judge concludes that “an order

not otherwise appealable” in a civil action “involves a controlling question of law as to

which there is substantial ground for difference of opinion,” and that “an immediate appeal

from the order may materially advance the ultimate termination of the litigation,” then the

judge shall “so state in writing in such order.” 28 U.S.C. § 1292(b). “The Court of

Appeals . . . may thereupon, in its discretion, permit an appeal to be taken from such order.”

Id. Based on
the text of § 1292(b), the Yamaha Court held that appellate jurisdiction under

that statute “applies to the order certified to the court of appeals, and is not tied to the

particular question formulated by the district 
court.” 516 U.S. at 205
. As such, courts of

appeals “may address any issue fairly included within the certified order because it is the

order that is appealable.” 
Id. (internal quotation
mark omitted).

       Although at least one other circuit has found Yamaha persuasive in interpreting the

word “order” under § 1447(d) as a matter of first impression, see Lu Junhong v. Boeing

Co., 
792 F.3d 805
, 810–13 (7th Cir. 2015), 4 we simply cannot conclude that our contrary

interpretation in Noel is abrogated. True, the Supreme Court’s interpretation of the word

“order” in Yamaha was entirely textual. But it did not purport to establish a general rule


       4
         Though the Sixth Circuit reached a similar conclusion in Mays v. City of Flint, 
871 F.3d 437
, 442 (6th Cir. 2017), cert. denied, 
138 S. Ct. 1557
(2018), it merely cited Lu
Junhong in doing so and did not so much as address its earlier precedent applying a contrary
rule, see, e.g., Detroit Police Lieutenants & Sergeants Ass’n v. City of Detroit, 
597 F.2d 566
, 567–68 (6th Cir. 1979). Similarly, although the Fifth Circuit has followed Lu
Junhong’s lead, see Decatur Hosp. Auth. v. Aetna Health, Inc., 
854 F.3d 292
, 295–97 (5th
Cir. 2017), it, too, has potentially conflicting authority on the issue, see City of Walker v.
Louisiana, 
877 F.3d 563
, 566 & n.2 (5th Cir. 2017).
                                             11
governing the scope of appellate jurisdiction for every statute that uses that word. See

Yamaha, 516 U.S. at 205
. And for good reason: Section 1292(b) governs when an appellate

court may review a particular question within its discretion. Section 1447(d), by contrast,

limits which issues are “reviewable on appeal or otherwise.” Put another way, § 1292(b)

permits appellate review of important issues before final judgment, but it does not make

otherwise non-appealable questions reviewable. Reading “order” to authorize plenary

review thus makes sense in the § 1292(b) context, as § 1292(b) only affects the timing of

review for otherwise appealable questions. But giving the word “order” the same meaning

in the § 1447(d) context would mandate review of issues that are ordinarily unreviewable,

period—even following a final judgment. See generally Yates v. United States, 
135 S. Ct. 1074
, 1082 (2015) (“[I]dentical language may convey varying content when used in

different statutes, sometimes even in different provisions of the same statute.”).

       The Removal Clarification Act of 2011 does not alter this conclusion. The Act

amended § 1447(d), among other statutes, “by inserting ‘1442 or’ before ‘1443.’” 125 Stat.

at 546. Because the Act “retain[s] § 1447(d)’s reference to reviewable ‘orders,’ even after

Yamaha,” Defendants contend that Congress must have intended to authorize “plenary

review” of such orders. Opening Br. 12. Although Defendants are correct that courts may

generally “presume” that Congress is “aware of judicial interpretations” of statutes,

Jackson v. Home Depot U.S.A., Inc., 
880 F.3d 165
, 171 (4th Cir. 2018), we find Yamaha

distinguishable for the reasons stated above. Yamaha did not interpret the scope of

§ 1447(d), let alone involve a remand order. Cf. 
Jackson, 880 F.3d at 170
–71 (interpreting

word “defendant” to have same meaning in “interlocking removal statutes”). Moreover,

                                             12
to the extent that Defendants attempt to argue that we are not bound by Noel’s interpretation

of § 1447(d) because Noel was decided before orders remanding cases removed pursuant

to § 1442 were made reviewable, 
see 538 F.2d at 635
(interpreting prior version of

§ 1447(d) in which § 1443 was sole exception), we find that argument unpersuasive.

Simply put, the fact that Congress later added § 1442 as an exception to § 1447(d)’s

no-appeal rule for remand orders does not undermine our holding in Noel that appellate

courts only have jurisdiction to review those grounds for removal that are specifically

enumerated in § 1447(d).

       In sum, Noel remains binding precedent in this Circuit. 5 Accordingly, “we dismiss

this appeal for lack of jurisdiction,” 
id., insofar as
it seeks to challenge the district court’s

determination with respect to the propriety of removal based on federal-question, OCSLA,

admiralty, and bankruptcy jurisdiction.


                                              III.

       Having determined that we only have jurisdiction to review the district court’s

conclusion that removal was improper under the federal officer removal statute, we now

turn to that issue.




       5
         We note that we are not alone in continuing to interpret § 1447(d) consistently
with Noel, even in the wake of Yamaha and the passage of the Removal Clarification Act.
See Jacks v. Meridian Res. Co., 
701 F.3d 1224
, 1229 (8th Cir. 2012); see also Claus v.
Trammell, 773 F. App’x 103, 103 (3d Cir. 2019) (citing Davis v. Glanton, 
107 F.3d 1044
,
1047 (3d Cir. 1997)); Wong v. Kracksmith, Inc., 764 F. App’x 583, 584 (9th Cir. 2019)
(citing Patel v. Del Taco, Inc., 
446 F.3d 996
, 998 (9th Cir. 2006)).
                                               13
       “We review de novo issues of subject matter jurisdiction, including removal.”

Ripley v. Foster Wheeler LLC, 
841 F.3d 207
, 209 (4th Cir. 2016). Although Defendants

bear the burden of establishing jurisdiction as the party seeking removal, see Dixon v.

Coburg Dairy, Inc., 
369 F.3d 811
, 816 (4th Cir. 2004), the federal officer removal statute

must be “liberally construed,” Watson v. Philip Morris Co., 
551 U.S. 142
, 150 (2007)

(quoting Colorado v. Symes, 
286 U.S. 510
, 517 (1932)).                 As such, the ordinary

“presumption against removal” does not apply. See Betzner v. Boeing Co., 
910 F.3d 1010
,

1014 (7th Cir. 2018).

       The federal officer removal statute authorizes the removal of state-court actions

filed against “any officer (or any person acting under that officer) of the United States or

of any agency thereof, in an official or individual capacity, for or relating to any act under

color of such office.” 28 U.S.C. § 1442(a)(1). Its “basic purpose” is to protect against the

interference with federal operations that would ensue if a state were able to arrest federal

officers and agents acting within the scope of their authority and bring them to trial in a

state court for an alleged state-law offense. 
Watson, 551 U.S. at 150
(explaining that

state-court proceedings may “reflect local prejudice against unpopular federal laws or

federal officials,” “impede [enforcement of federal law] through delay,” or “deprive federal

officials of a federal forum in which to assert federal immunity defenses” (internal

quotation marks omitted)).

       Thus, to remove a case under § 1442(a)(1), a private defendant must show: “(1) that

it ‘act[ed] under’ a federal officer, (2) that it has ‘a colorable federal defense,’ and (3) that

the charged conduct was carried out for [or] in relation to the asserted official authority.”

                                               14
Sawyer v. Foster Wheeler LLC, 
860 F.3d 249
, 254 (4th Cir. 2017) (first alteration in

original) (citations omitted). Here, Defendants assert that Baltimore’s state-court action is

removable under the federal officer removal statute “because the City bases liability on

activities undertaken at the direction of the federal government.” BP P.L.C., 
388 F. Supp. 3d
at 567 (internal quotation mark omitted). It is the first and third prongs that are therefore

in dispute. See Resp. Br. 14–21. We begin with the first, though the acting-under and

causal-nexus prongs often “collapse into a single requirement.” In re MTBE Prods. Liab.

Litig., 
488 F.3d 112
, 124 (2d Cir. 2007); see also 28 U.S.C. § 1442(a)(1) (targeting for

removal state-court actions “for or relating to any act under color of [federal] office”).


                                              A.

       The statutory phrase “acting under” describes “the triggering relationship between

a private entity and a federal officer.” 
Watson, 551 U.S. at 149
. Although the words

“acting under” are “broad,” the Supreme Court has emphasized that they are not

“limitless.” 
Id. at 147.
In cases involving a private entity, the “acting under” relationship

requires that there at least be some exertion of “subjection, guidance, or control” on the

part of the federal government. See 
id. at 151
(quoting Webster’s New International

Dictionary 2765 (2d ed. 1953)). Additionally, “precedent and statutory purpose” make

clear that “‘acting under’ must involve an effort to assist, or to help carry out, the duties or

tasks of the federal superior.” 
Id. at 152.
       In Watson, the Supreme Court held that “simply complying with the law” does not

constitute the type of “help or assistance necessary to bring a private [entity] within the


                                              15
scope of the statute,” 
id., no matter
how detailed the government regulation or how

intensely the entity’s activities are supervised and monitored, see 
id. at 153.
In doing so,

the Court distinguished several decisions cited by the defendant there in which lower courts

had held that private contractors fell within the terms of § 1442(a)(1), at least where the

relationship was “an unusually close one involving detailed regulation, monitoring, or

supervision.” 
Id. at 153
(citing Winters v. Diamond Shamrock Chem. Co., 
149 F.3d 387
(5th Cir. 1998)). The difference between those cases and a case involving a highly

regulated private firm, the Court reasoned, was the fulfillment of a government need:

       The answer to this question lies in the fact that the private contractor in such
       cases is helping the Government to produce an item that it needs. The
       assistance that private contractors provide federal officers goes beyond
       simple compliance with the law and helps officers fulfill other basic
       governmental tasks. In the context of Winters, for example, Dow Chemical
       fulfilled the terms of a contractual agreement by providing the Government
       with a product that it used to help conduct a war. Moreover, at least arguably,
       Dow performed a job that, in the absence of a contract with a private firm,
       the Government itself would have had to perform.

Id. at 153
–54.

       The Supreme Court found these circumstances sufficient to distinguish Dow

Chemical (the contractor in Winters) from the regulated tobacco companies who sought

removal in Watson, and so it did not address “whether and when particular circumstances

may enable private contractors to invoke the statute.” 
Id. at 154.
Nevertheless, in light of

the Court’s reasoning, we have relied on Watson to hold that certain private contractors

“act under” federal officials. See 
Sawyer, 860 F.3d at 255
. In Sawyer, we observed that

“courts have unhesitatingly treated the ‘acting under’ requirement as satisfied where a

contractor seeks to remove a case involving injuries arising from equipment that it
                                             16
manufactured for the government.” 
Id. Thus, in
that case, we found that the defendant

“acted under” the United States Navy when it manufactured boilers to be used aboard naval

vessels per a detailed government contract. See 
id. at 252–53,
255.


                                            B.

       Here, Defendants collectively seek removal under § 1442 based on three contractual

relationships between certain Defendants and the federal government: (1) fuel supply

agreements between one Defendant (Citgo) and the Navy Exchange Service Command

(“NEXCOM”) from 1988 to 2012; (2) oil and gas leases administered by the Secretary of

the Interior under the OCSLA; and (3) a 1944 unit agreement between the predecessor of

another Defendant (Chevron) and the U.S. Navy for the joint operation of a strategic

petroleum reserve in California known as the Elk Hills Reserve. For the reasons that

follow, we agree with Baltimore that none of these relationships are sufficient to justify

removal under the federal officer removal statute in this case, either because they fail to

satisfy the acting-under prong or because they are insufficiently related to Baltimore’s

claims for purposes of the nexus prong.


                                            1.

       First, we have little trouble concluding that the NEXCOM fuel supply agreements

do not satisfy the “acting under” requirement. These agreements required Defendant Citgo

to advertise, supply, and distribute gasoline and diesel to NEXCOM, which NEXCOM

resold at a discount to “active duty military, retirees, reservists, and their families” at

“service stations operated by NEXCOM on Navy bases located in a number of states across

                                            17
the country.” J.A. 216. Although Defendants contend that Citgo helped “the Government

to produce an item that it needs” by selling NEXCOM fuel for resale on Navy bases, see

Watson, 551 U.S. at 153
, such logic would bring every seller of contracted goods and

services within the ambit of § 1442 when the government is a customer.

       We refuse to adopt such a sweeping interpretation of Watson. In our view, the key

lesson from Watson is that closely supervised government contractors are distinguishable

from intensely regulated private firms because the former assist the government in carrying

out basic governmental functions. 
See 551 U.S. at 153
–54 (“The assistance that private

contractors provide federal officers goes beyond simple compliance with the law and helps

officers fulfill other basic governmental tasks . . . . [that] the Government itself would

[otherwise] have . . . to perform.”). And the provision of means to engage in chemical

warfare, as in Winters, or even the provision of specific component parts to be used aboard

military vessels, as in Sawyer, is different in kind from the provision of motor vehicle fuel

for resale on Navy bases—both in terms of the nature of the “item” provided and the level

of supervision and control that is contemplated by the contract.

       To be sure, other circuits have applied the Watson dictum beyond the military-

procurement-contract context, and we do not suggest that only defense contractors may

invoke the federal officer removal statute. 6 Yet none of those cases have confronted a



       6
          For cases involving people other than defense contractors, see, for example,
Goncalves ex rel. Goncalves v. Rady Children’s Hosp. San Diego, 865 F.3d 1237,1245–49
(9th Cir. 2017); In re Commonwealth’s Motion to Appoint Counsel Against or Directed to
Defender Ass’n of Phila., 
790 F.3d 457
, 469 (3d Cir. 2015); Bell v. Thornburg, 743 F.3d
(Continued)
                                             18
contract like the one we have here, which involves the sale of a standardized consumer

product. Indeed, the Ninth Circuit has held, albeit in an unpublished decision, that the fact

that the federal government purchases “off-the-shelf” products from a manufacturer “does

not show that the federal government [has] supervised [the] manufacture of [such products]

or directed [that they be] produce[d] in a particular manner, so as to come within the

meaning of ‘act[ed] under.’” Washington v. Monsanto Co., 738 F. App’x 554, 555 (9th

Cir. 2018) (sixth alteration in original) (quoting 28 U.S.C. § 1442(a)(1)).

       Although Defendants strongly resist the off-the-shelf-products analogy by pointing

to particular provisions in the fuel supply agreements, we find those provisions unavailing.

Defendants emphasize that the agreements: (1) “set forth detailed ‘fuel specifications’ that

required compliance with specified American Society for Testing and Materials standards,

and compelled NEXCOM to ‘have a qualified independent source analyze the products’

for compliance with those specifications”; (2) “authorized the Contracting Officer to

inspect delivery, site, and operations”; and (3) “established detailed branding and

advertising requirements.” Reply Br. 19–20 (footnotes omitted). But we have reviewed

the contractual provisions cited by Defendants, and they are a far cry from the type of close

supervision that existed in both Sawyer and Winters. See 
Sawyer, 860 F.3d at 253
(noting

that the Navy provided “highly detailed ship [and military] specifications” that boilers were

required to match, and exercised “intense direction and control . . . over all written




84, 89 (5th Cir. 2014); Jacks v. Meridian Res. Co., 
701 F.3d 1224
, 1232–35 (8th Cir. 2012);
Bennett v. MIS Corp., 
607 F.3d 1076
, 1088 (6th Cir. 2010).

                                             19
documentation to be delivered with its naval boilers,” including warnings (internal

quotation marks omitted)); 
Winters, 149 F.3d at 398
–99 (noting that the Department of

Defense required Dow Chemical to provide Agent Orange under threat of criminal

sanctions, maintained strict control over the chemical’s development, and required that it

be produced according to its specifications); cf. Isaacson v. Dow Chem. Co., 
517 F.3d 129
,

138 (2d Cir. 2008) (rejecting “off-the-shelf argument” because “commercially available

products did not contain the Agent Orange herbicides in a concentration as high as that

found in Agent Orange”). Rather, the cited provisions seem typical of any commercial

contract. They are incidental to sale and sound in quality assurance. 7


                                             2.

       Next up are the oil and gas leases. Defendants allege that Chevron and “other

Defendants” have extracted oil and gas on the federal Outer Continental Shelf (“OCS”) 8

pursuant to a leasing program administered by the Secretary of the Interior under the

OCSLA. J.A. 212; see, e.g., J.A. 233–39 (boilerplate lease); see also 
Jewell, 779 F.3d at 7
         In light of the misleading-marketing allegations that are at the center of
Baltimore’s Complaint, we pause to note that the “detailed branding and advertising
requirements” cited by Defendants have absolutely nothing to do with those allegations.
They simply address whether and when the government will market a branded product
under a contractor’s brand or trade name. See BP P.L.C. v. Mayor & City Council of Balt.,
No. 18-2357 (D. Md.), ECF No. 127-6 at 23 (§ C.11), ECF No. 127-7 at 15 (§ C.9).
       8
        The OCS is “a vast underwater expanse” that begins “a few miles from the U.S.
coast, where states’ jurisdiction ends,” and “extends roughly two hundred miles into the
ocean to the seaward limit of the international-law jurisdiction of the United States.” Ctr.
for Sustainable Econ. v. Jewell, 
779 F.3d 588
, 592 (D.C. Cir. 2015); see also 43 U.S.C.
§ 1331(a) (defining “outer Continental Shelf”). “Billions of barrels of oil and trillions of
cubic feet of natural gas lie beneath [it].” 
Jewell, 779 F.3d at 592
.
                                            20
592 (“The [OCSLA] created a framework to facilitate the orderly and environmentally

responsible exploration and extraction of oil and gas deposits on the OCS. It charges the

Secretary of the Interior with preparing a program every five years containing a schedule

of proposed leases for OCS resource exploration and development.”).

       The leases grant lessees “the exclusive right and privilege to drill for, develop, and

produce oil and gas resources” in the submerged lands of the OCS in exchange for certain

royalties on production, see J.A. 233–34, and requires them to exercise diligence in the

development of the leased area by engaging in exploration, development, and production

activities in accordance with government-approved plans, see J.A. 234; see also 30 C.F.R.

§§ 550.200–.299 (expounding plans referenced in lease). The leases also place certain

conditions on the disposition of oil and gas that is produced. Defendants highlight two

such conditions. The first mandates that twenty percent of production be offered to “small

or independent refiners.” J.A. 235. The second gives the government a right of first refusal

to purchase all production “[i]n time of war or when the President of the United States shall

so prescribe.” J.A. 235.

       Defendants argue that the foregoing provisions demonstrate that the Defendant

lessees were “acting under” the Secretary of the Interior in extracting, producing, and

selling fossil fuel products on the OCS. We disagree.

       For starters, we note that many of lease terms are mere iterations of the OCSLA’s

regulatory requirements.     Though OCS resource development is highly regulated,

“differences in the degree of regulatory detail or supervision cannot by themselves

transform . . . regulatory compliance into the kind of assistance” that triggers the “acting

                                             21
under” relationship. See 
Watson, 551 U.S. at 157
. Of course, the presence of a contractual

relationship (here, a lease) is an important distinction. But we are skeptical that the

willingness to lease federal property or mineral rights to a private entity for the entity’s

own commercial purposes, without more, could ever be characterized as the type of

assistance that is required to trigger the government-contractor analogy. See, e.g., Bd. of

Cty. Comm’rs v. Suncor Energy (U.S.A.) Inc., 
405 F. Supp. 3d 947
, 977 (D. Colo. 2019)

(“At most, the leases appear to represent arms-length commercial transactions whereby

ExxonMobil agreed to certain terms (that are not in issue in this case) in exchange for the

right to use government-owned land for their own commercial purposes.”), appeal

docketed, No. 19-1330 (10th Cir. Sept. 9, 2019).

       Moreover, we need not decide whether the OCSLA leases are distinguishable from

other more run-of-the-mill natural-resources leases because they implicate national energy

needs. Either way, we are not convinced that the supervision and control to which OCSLA

lessees are subject connote the sort of “unusually close” relationship that courts have

previously recognized as supporting federal officer removal. See 
Watson, 551 U.S. at 153
–

54; see also supra pp. 19–20 (discussing Winters and Sawyer). As Baltimore points out,

the leases do not appear to dictate that Defendants “extract fossil fuels in a particular

manner.” Resp. Br. 18. Nor do they appear to vest the government with control over “the

composition of oil or gas to be refined and sold to third parties,” let alone purport to affect

“the content or methods of Defendants’ communications with customers, consumers, and




                                              22
others about Defendants’ [fossil fuel] products.” Resp. Br. 18; accord Suncor 
Energy, 405 F. Supp. 3d at 976
–77. 9

       Finally, even to the extent that the OCSLA leases toe the “acting under” line, we

still agree with the district court’s analysis as to § 1442’s third prong. Any connection

between fossil fuel production on the OCS and the conduct alleged in the Complaint is

simply too remote.

       To satisfy the third prong, the conduct charged in the Complaint need only “relate

to” the asserted official authority. See 
Sawyer, 860 F.3d at 257
–58; see also 28 U.S.C.

§ 1442(a)(1) (“for or relating to any act under color of such office” (emphasis added)).

That is, there must be “a connection or association between the act in question and the

federal office.” 
Sawyer, 860 F.3d at 258
(emphasis omitted) (quoting Papp v. Fore-Kast

Sales Co., 
842 F.3d 805
, 813 (3d Cir. 2016)). We elaborated upon this requirement in

Sawyer. There, we held that the district court imposed “a stricter standard of causation

than that recognized by the statute” by demanding a showing of “specific government

direction” as to whether the defendant manufacturer should have warned shipyard workers

who assembled boilers for use aboard naval vessels about the dangers of asbestos, which


       9
         Defendants do not seriously contend otherwise. Instead, in their documents here
and below, they repeatedly point to the same lease provisions that we cite above, without
further explanation. This is a complex case, and we do not intend to suggest that
Defendants were required to outline the leases’ requirements in painstaking detail in order
to satisfy their burden of justifying federal officer removal. But they must provide
“‘candid, specific and positive’ allegations that they were acting under federal officers.”
In re 
MTBE, 488 F.3d at 130
(citation omitted) (quoting Willingham v. Morgan, 
395 U.S. 402
, 408 (1969)). Here, the lack of any specificity as to federal direction leaves us unable
to conclude that the leases rise to the level of an unusually close relationship, as required
by the first “acting under” prong.
                                             23
was a component of the boilers manufactured by the defendant under a contract with the

Navy. See 
id. at 252,
258. Notably, the Navy required the use of asbestos in boilers despite

its known dangers; dictated the content of the warnings that accompanied the boilers; and

the defendant manufacturer complied with those requirements. Accordingly, we concluded

that the defendant’s performance of the contract was “sufficient to connect the plaintiffs’

claims, which fault[ed] warnings that were not specified by the Navy, to the warnings that

the Navy specified and with which [the defendant] complied.” 
Id. at 258
(emphasis added);

see also 
id. (“These claims
undoubtedly ‘relat[e] to’ all warnings, given or not, that the

Navy determined in its discretion.” (alteration in original)).

       In this case, the district court held that even if the “acting under” and “colorable

federal defense” requirements were satisfied, Defendants did not plausibly assert that the

charged conduct was carried out “for or relating to” the alleged official authority, given the

“wide array of conduct” for which they were sued. See BP P.L.C., 
388 F. Supp. 3d
at 568–

69. Specifically, the court explained that Defendants were sued “for their contribution to

climate change by producing, promoting, selling, and concealing the dangers of fossil fuel

products,” and yet failed to show that a federal officer “controlled their total production

and sales of fossil fuels,” or “directed them to conceal the hazards of fossil fuels or

prohibited them from providing warnings to consumers.” 
Id. at 568.
       On appeal, Defendants take issue with primarily two aspects of the district court’s

analysis. First, they argue that the lack of direction as to concealment or warnings is

irrelevant to some of Baltimore’s claims, namely, strict liability for design defect. Second,



                                             24
they contend that a lack of control as to total production and sales is not dispositive under

Sawyer’s relaxed reading of the third “nexus” prong.

       We disagree with Defendants on both fronts. When read as a whole, the Complaint

clearly seeks to challenge the promotion and sale of fossil fuel products without warning

and abetted by a sophisticated disinformation campaign. Of course, there are many

references to fossil fuel production in the Complaint, which spans 132 pages. But, by and

large, these references only serve to tell a broader story about how the unrestrained

production and use of Defendants’ fossil fuel products contribute to greenhouse gas

pollution. Although this story is necessary to establish the avenue of Baltimore’s climate

change-related injuries, it is not the source of tort liability. Put differently, Baltimore does

not merely allege that Defendants contributed to climate change and its attendant harms by

producing and selling fossil fuel products; it is the concealment and misrepresentation of

the products’ known dangers—and simultaneous promotion of their unrestrained use—that

allegedly drove consumption, and thus greenhouse gas pollution, and thus climate

change. 10


       10
          The same holds true for Baltimore’s strict-liability design-defect claim. As
Defendants point out, design-defect claims generally focus on “the product itself,” rather
than “the conduct of the manufacturer.” Phipps v. Gen. Motors Corp., 
363 A.2d 955
, 958
(Md. 1976). But that is not how Baltimore has framed its claim. Instead, Baltimore relies
on the same misleading-marketing and denialist-campaign allegations cited above,
averring that Defendants not only failed to warn the public about the climate effects they
knew would result from the normal use of their products, but also took affirmative steps to
misrepresent the nature of those risks, such as by disseminating information aimed at
casting doubt on the integrity of scientific evidence that was generally accepted at the time
and by advancing their own pseudo-scientific theories. According to Baltimore, these
tactics “prevented reasonable consumers from forming an expectation that fossil fuel
(Continued)
                                              25
       For this reason, the lack of federal control over the production and sale of all fossil

fuel products is relevant to the nexus analysis, and the district court did not err in relying

upon that fact in finding that any connection between the charged conduct and the asserted

official authority was even further diminished. If production and sales went to the heart of

Baltimore’s claims, we might be inclined to think otherwise. After all, the alleged

government-directed conduct (here, the production and sale of fossils fuels extracted on

the OCS) need only “relate to” the conduct charged in the Complaint. But given the

foregoing allegations, we agree with the district court’s conclusion that the relationship

between Baltimore’s claims and any federal authority over a portion of certain Defendants’

production and sale of fossil fuel products is too tenuous to support removal under § 1442.

       In sum, we hold that the Defendants who participated in the OCSLA leasing

program were not “acting under” federal officials in extracting and producing fossil fuels




products would cause grave climate changes.” J.A. 161; see also Maryland v. Exxon Mobil
Corp., 
406 F. Supp. 3d 420
, 461 (D. Md. 2019) (explaining that Maryland applies a
consumer-expectation test in design-defect cases, and only applies the risk-utility test when
the product malfunctions in some way (citing Halliday v. Sturm, Ruger & Co., 
792 A.2d 1145
(Md. 2002)). Under Baltimore’s own theory of liability, then, its design-defect claim
hinges on its ability to demonstrate that Defendants’ promotional efforts deprived
reasonable consumers of the ability to form expectations that they would have otherwise
formed. Though we agree with Defendants that Baltimore’s theory appears to be a novel
one, at least in the design-defect context, this may be a function of the unique circumstances
that have allegedly given rise to this litigation. For our purposes, it is sufficient that
Baltimore has limited its design-defect theory to one that turns on the promotion
allegations, which have nothing to do with the action purportedly taken under federal
authority. The viability of such a theory under Maryland law is a question for the Maryland
courts to decide.
                                             26
on the OCS, and any connection between such activity and Baltimore’s claims is too

attenuated in any event.


                                            3.

       That leaves the 1944 unit agreement governing the operation of the Elk Hills

Reserve. Because the agreement has a complicated history, we begin with its origin and

purpose, followed by a general overview of its terms (or at least those in dispute). In the

end, however, we decline to pass on the question of whether it satisfies the “acting under”

prong. Like the OCSLA leases, we hold that the agreement fails to meet the third prong in

any event.


                                            a.

      The Elk Hills Reserve is located in Kern County, California, and originated from a

1912 Executive Order.

      At the turn of the [twentieth] century, Government lands in the West were
      rapidly being turned over to private ownership. At the same time, there was
      a growing realization of the importance of oil for the Navy, which was then
      changing its ships from coal to oil burning. In response to arguments that the
      Government should preserve oil for Naval purposes, President Taft withdrew
      large portions of land in California and Wyoming from eligibility for private
      ownership, and in 1912 set aside [the Elk Hills Reserve] by an Executive
      Order. . . .

      The establishment of the Reserve was expressly made subject to pre-existing
      private ownership. There are approximately 46,000 acres within the Reserve,
      approximately one-fifth [was] owned by [the Standard Oil Company of
      California] and the remainder, approximately four-fifths by Navy. The
      Standard lands [were] not in one block, but [were] checker-boarded
      throughout the Reserve. The Executive Order establishing the Reserve
      affected the Government lands in the field as far as future use and disposition


                                            27
       were concerned, but it had no effect on the privately owned lands, and the
       owners of those lands were free to use and dispose of them as they saw fit.

United States v. Standard Oil Co., 
545 F.2d 624
, 626–27 (9th Cir. 1976). 11

       Because production from one part of the Elk Hills Reserve could have reduced the

amount of oil underlying another part of the Reserve, the Navy and Standard Oil (a Chevron

predecessor) initially “had an understanding to the effect that neither would drill

wells . . . without six months’ notice to the other.” 
Id. at 627;
see also 
id. (explaining that
underlying both parties’ lands were “separate accumulations of hydrocarbons,” which,

“unlike solid minerals, do not remain in place but move because of changes in underground

pressure and [thus] move toward producing wells”). But the tension between Standard’s

legitimate goal of producing oil on its land and the Navy’s duty to conserve its

hydrocarbons in the ground until needed in an emergency became untenable on the brink

of World War II. So the parties began negotiations over “an exchange, purchase or

condemnation of Standard’s land in the Reserve on the one hand, or their operation as a

unit with the Navy land,” on the other. 
Id. These negotiations
ultimately resulted in the 1944 Unit Plan Contract (“UPC”). 12 A

“unit agreement” is “a common arrangement in the petroleum industry where two or more


       11
         Standard Oil involved a prior dispute over the same agreement, in which the Ninth
Circuit endorsed the foregoing summary agreed upon by the parties in a pretrial statement.
       12
          The parties entered into an earlier contract in 1942, but it was voluntarily
terminated in 1943 due to doubts expressed by the Attorney General as to its legality. 
Id. The parties
entered into the UPC in 1944, after Congress passed enabling legislation. See
id. The UPC
governed the joint operation and development of three initial “commercially
productive zones” underlying the Elk Hills Reserve, two of which contained oil (the
(Continued)
                                              28
owners have interests in a common pool,” which is operated as a “unit.” 
Id. The parties
share production and costs in agreed-upon proportions, and, ordinarily, the objective is “to

produce currently, at minimum expense and pursuant to good engineering practices.” 
Id. The UPC
involved here, however, was unique in that “its purpose was not to produce

currently, and its effect was to conserve as much of the hydrocarbons in place as was

feasible until needed for an emergency.” 
Id. “This required
curtailing production of

Standard’s hydrocarbons along with that of Navy, for which Standard would have to

receive compensation.” 
Id. Accordingly, “in
consideration for Standard curtailing its

production plus giving up certain other rights,” 
id. at 627–28,
the UPC gave Standard the

right to take specified volumes of oil from certain zones in the pool—namely, an average

of 15,000 barrels per day, or a lesser amount fixed by the Secretary of the Navy, with (a) a

ceiling of 25,000,000 barrels or one-third of Standard’s total share, whichever was less,

and (b) a floor of an amount sufficient to cover Standard’s out-of-pocket expenses in

maintaining the Reserve in good oil-field condition, see 
id. at 628;
J.A. 245–46, 250–52.




Stevens Zone and Shallow Oil Zone). Only the latter zone is at issue here, and all of the
provisions discussed in this opinion pertain to that zone.
                                            29
                                             b.

       With this background in mind, we turn to the specific UPC provisions relied upon

by Defendants to establish that one of their predecessors (Standard) “acted under” the Navy

when it engaged in fossil fuel production during the twentieth century.

       In the main, Defendants stress that the UPC gave the Navy “exclusive control over

the exploration, prospecting, development, and operation of the [Elk Hills] Reserve,” and

the “full and absolute power to determine . . . the quantity and rate of production from[]

the Reserve.” Reply Br. 18 (second alteration in original); accord J.A. 249–50. In

particular, they note that the UPC “obligated” Standard “to operate the Reserve in such

manner as to produce ‘not less than 15,000 barrels of oil per day,’” and allowed the Navy

to suspend or increase the rate of production in its “discretion,” Reply Br. 18–19 (first

quoting J.A. 250, § 4(b); then citing J.A. 250–51, §§ 4(b), 5(d)(1)).

       Baltimore counters that these provisions do not establish that Standard was

producing oil at the direction of a federal officer. According to Baltimore, these provisions

merely required that the pool be maintained in a manner that would have made it capable

of producing at least 15,000 barrels per day until Standard received its share under the

contract.   See J.A. 250, § 4(b) (“Until Standard shall have received . . . its share of

production . . . , the Reserve shall be developed and operated in such manner and to such

extent as will, so far as practicable, permit production . . . to be maintained at a rate

sufficient to produce therefrom not less than 15,000 barrels of oil per day . . . .”). As a

result, Baltimore argues that Standard could have complied with the contract by producing

no oil at all, unless and until the Navy elected to increase the rate of production via

                                             30
congressional authorization. 13    And even then, Baltimore says, the contract did not

necessarily make Standard responsible for production on the Navy’s behalf. See generally

J.A. 249, § 3(a) (“Navy shall, subject to the provisions hereof, have the exclusive control

over the exploration, prospecting, development, and operation of the Reserve, and Navy

may, in its discretion, explore, prospect, develop, and/or operate the Reserve directly with

its own personnel or it may contract for all or any part of such [activities] with competent

and responsible parties[, including] . . . Standard . . . .” (emphasis added)).

       At oral argument, Defendants shifted their focus away from whether the 15,000-

barrels-per-day provision actually required Standard to produce any oil, as they argued in

their briefs. Instead, Defendants pointed to the Naval Petroleum Reserves Production Act

of 1976 (“1976 Act”), which “authorized and directed” the Secretary of the Navy to

produce the Elk Hills Reserve “at the maximum efficient rate consistent with sound

engineering practices for a period not to exceed six years,” Pub. L. No. 94-258, 90 Stat.

303, 308; see also supra note 13 (discussing UPC’s congressional-authorization

requirement). Congress authorized this increase in production after determining that “the

Navy’s intent to maintain a petroleum reserve, in case of national emergency in 1944, was



       13
           See generally J.A. 246, recitals § 8 (“[The UPC] does not and cannot, in and of
itself, authorize the production of any of Navy’s share of the oil, . . . as distinct from that
portion of Standard’s share hereinafter permitted to be produced and received by Standard
under the terms of [the above-cited provisions]. The production of the remainder of
Standard’s share and of all of Navy’s share must, except for the purpose of protecting,
conserving, maintaining, or testing the Reserve, be preceded by and based upon
[congressional] authorization . . .; and references hereinafter to an authorization or election
by Navy to order the production of any such oil are intended to be limited to action by the
Navy within the terms of any such [authorization].”).
                                              31
no longer relevant,” Chevron U.S.A., Inc. v. United States, 
71 Fed. Cl. 236
, 244 (2006),

and in response to the 1973 oil crisis, J.A. 214. The 1976 Act also gave the Secretary the

authority “to sell or otherwise dispose of the United States share of such petroleum

produced from” the Elk Hills Reserve. See 90 Stat. at 308.

       Shortly thereafter, in 1977, Congress transferred authority over the Elk Hills

Reserve to the Department of Energy and assigned to it the Navy’s interest in the Reserve

as well as the UPC. 
Chevron, 71 Fed. Cl. at 244
–45. Standard, and later Chevron as a

successor, “continued its interest in the joint operation” of the Reserve until 1997. J.A.

214.


                                             c.

       The parties’ dispute about the UPC and its significance for purposes of federal

officer removal thus can be distilled to two main issues. First, was any oil ever produced

from the Elk Hills Reserve at the Navy’s direction? And second, if so, was it Standard

who carried out those orders?

       In light of the 1976 Act, we think the answer to the first question is yes. But as to

the second, we simply have no idea whether production authorized by Congress was carried

out by Standard. At oral argument, counsel for Chevron merely stated that it was his

“understanding” that Standard extracted oil on the Navy’s behalf under the unit agreement,

and, more generally, that the government relies upon private companies because it does not

have its own oil and gas engineers or drilling equipment. And although counsel later

submitted a Rule 28(j) Letter stating that the government had final authority over all


                                            32
production, “which was carried out by Standard, and later Chevron,” Appellants’ Letter

Suppl. Authorities 1, ECF No. 133, the letter merely cites the UPC as a whole in support

of this assertion. In other words, it does not explain why Baltimore’s reliance on the

operational-control provision cited above is misplaced, see J.A. 249, § 3(a), nor does it

point to any other provision or provisions that support a different reading. 14 Thus, we are

left wanting for pertinent details about Standard’s role in operating the Elk Hills Reserve

and producing oil therefrom on behalf of the Navy, which might bear directly upon the

“acting under” analysis. Indeed, if Standard was not responsible for producing the oil

authorized by Congress in 1976, the upshot is that any extensive government control

contemplated by the UPC only affected the parties’ relative shares and the development of

the Reserve, not Standard’s duties with respect to any production carried out for the Navy’s

benefit.

       Nevertheless, even if we were to conclude that Standard was responsible for such

production under the UPC—and that this responsibility transformed Standard into a person

“acting under” the Navy for purposes of § 1442—the production of oil from the Elk Hills

Reserve by the predecessor of one of the twenty-six Defendants, like the production of

fossil fuels on the OCS, is not sufficiently “related” to Baltimore’s claims. See supra pp.




       14
          Because Baltimore only claimed that Standard was not responsible for production
at oral argument—in response to Defendants’ reliance on the 1976 Act, which Defendants,
in turn, did not rely upon in their briefs on appeal—this issue is not addressed in
Defendants’ briefing, either. Nor can we find any relevant explanation in the federal-
officer allegations in the Notice of Removal.
                                            33
23–26. Accordingly, the district court was correct in concluding that the UPC cannot

support federal officer removal in this case.


                                            IV.

       For the foregoing reasons, we affirm the district court’s order granting Baltimore’s

motion to remand.

                                                                              AFFIRMED




                                                34

Source:  CourtListener

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