U.S. Supreme Court justices on Monday expressed skepticism toward efforts by ExxonMobil and Chevron to move Louisiana coastal pollution lawsuits out of state court, questioning whether the companies’ World War II era oil production activities were sufficiently federal in nature to justify removal.
The oil companies, backed by the U.S. Department of Justice and industry groups, argue that lower courts relied on an outdated legal standard when refusing to transfer the cases to federal court. They contend that their wartime oil production and refining work was carried out under close federal direction and therefore falls within the federal officer removal statute, which allows defendants acting under U.S. government authority to litigate in federal court.
The lawsuits, brought by Louisiana and two coastal parishes, allege that oil companies unlawfully dredged and damaged coastal lands while searching for crude oil. The plaintiffs say the resulting environmental harm stems from commercial extraction activities that should be judged under state law, even if some of the refined oil was later used for military aviation fuel during World War II.
At issue is whether amendments Congress made to the federal officer removal statute in 2011 eliminated the need for a direct causal link between the alleged misconduct and a federal directive, and whether contractors can invoke the statute based on activities related to fulfilling government contracts.
Several justices questioned whether the companies’ interpretation would stretch federal jurisdiction too far. Justice Sonia Sotomayor warned that adopting such a broad view could sweep in a wide range of disputes involving federal contractors.
“If we define it capaciously as you do, I’m not sure what the stopping point would be or how we would limit the application to this case,” Sotomayor told Chevron attorney Paul D. Clement.
Justice Elena Kagan raised similar concerns, suggesting the theory could allow nearly any contractor to shift state law claims to federal court. Clement responded that removal would still require a connection between the government directed work and the conduct being challenged.
“That doesn’t do you any good unless what you did under the government contract is related to the thing you’re being sued for,” Clement said.
Clement argued that oil production during World War II was carried out under intense federal supervision as part of a coordinated national effort to fuel the war. He described the relationship as a wartime joint venture aimed at maximizing petroleum output to support military aviation.
“This was close supervision of what effectively amounted to a joint venture during World War II,” Clement told the court, emphasizing the government’s role in financing refinery expansion and directing output toward aviation gasoline.
Justice Department attorney Aaron Z. Roper said Congress deliberately broadened the statute in 2011 by adding language allowing removal for claims “relating to” actions taken under federal authority. He argued the Supreme Court has long recognized that phrase as expansive.
That interpretation drew pushback from Chief Justice John Roberts, who questioned how far the concept could extend.
“You’re right that ‘relating to’ is very broad, but it’s hard to see where you stop,” Roberts said, suggesting the logic could spiral into overly remote connections.
Justice Ketanji Brown Jackson also expressed doubt, noting that lawmakers described the 2011 change as a “conforming amendment,” rather than a major expansion of federal jurisdiction.
“If we are interested in being consistent with what Congress intended, I don’t understand why the evidence doesn’t show that Congress was not trying to change the standard,” Jackson said.
Representing Louisiana, Solicitor General J. Benjamin Aguiñaga argued that the oil companies cannot shield themselves from state court simply because they held contracts to refine aviation fuel. He said most crude oil production during the period served civilian uses and would have occurred regardless of any military contracts.
“Industry would have been engaged in the exact same conduct that we charge in our complaints, whether or not an avgas refining contract existed,” Aguiñaga told the justices.
In rebuttal, Clement argued that civilian use during wartime included powering factories critical to the war effort, blurring any clean distinction between military and non military purposes.
Following the hearing, Chevron said it remained confident that federal court is the appropriate forum. Louisiana Attorney General Liz Murrill countered that the cases belong squarely in state court, saying the federal government did not contract for oil production itself, but only for refined fuel.
The case, Chevron USA Inc. et al. v. Plaquemines Parish, Louisiana et al., places the Supreme Court at the center of a broader debate over the reach of federal jurisdiction and the limits of contractor immunity for historical industrial activity.
