(The Center Square) − The U.S. Justice Department has stepped in on Chevron’s side in a high-stakes Louisiana coastal lawsuit, urging the Supreme Court to move the case from state court to federal court.
The case – Plaquemines Parish v. Chevron USA, Inc. – is the first of 42 similar lawsuits seeking billions of dollars for decades of damage to Louisiana’s vanishing wetlands.
Chevron says because its predecessor companies produced oil and refined aviation gasoline under U.S. government contracts during World War II, they were effectively carrying out federal duties. The Justice Department agrees, saying the case should be heard in federal court because it directly relates to those wartime operations.
“World War II, from beginning to end, was a war of oil,” the brief notes, emphasizing that the federal Petroleum Administration for War tightly directed the nation’s petroleum industry. The Justice Department pointed out that Texaco (a Chevron predecessor) had federal contracts to produce avgas – a critical military fuel that powered Allied bombers and fighters – and operated under extraordinary wartime supervision.
According to the brief, Plaquemines Parish’s claims target production practices such as canal dredging, drilling methods, and waste disposal that it says harmed Louisiana’s coast. The Justice Department contends those practices were part of a federally supervised supply chain needed to deliver avgas to the war effort.
At issue is whether the case should be heard in federal court under a statute that allows removal of lawsuits against those “acting under” a federal officer when the suit relates to acts performed under federal authority.
The Department of Justice says the 5th U.S. Circuit Court of Appeals wrongly required Chevron to identify a specific federal contract provision directing its oil-production methods, a test the brief says is “unduly tight” and inconsistent with Congress’s intent to keep federal operations free from “local prejudice.”
The Justice Department also argues that federal oversight by the Petroleum Administration for War – which dictated production rates, allocated crude oil to refineries, and even controlled refinery expansions – strengthens, not weakens, Chevron’s case for removal.
“Every part of the wartime petroleum program was interlocked with another part,” the brief says, making crude oil production and refining “inseparable” from the federal mission.
The April verdict against Chevron was celebrated by environmental groups as a breakthrough in holding the oil industry accountable for coastal land loss.
Plaintiffs say companies cut more than 10,000 miles of canals through Louisiana’s wetlands without proper permits, accelerating land loss that now claims a football field of coast every 100 minutes.
Business groups and energy advocates warned the verdict would drive jobs and investment out of Louisiana. The Louisiana Association of Business and Industry called the decision “shortsighted,” saying it would “brand Louisiana as a state that will extort the most recognizable companies on earth for billions of dollars, decades later.”
The U.S. Chamber of Commerce has also submitted briefs in favor of Chevron.
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