[00:00:00] Speaker 01: Case number 22-7163, District of Columbia versus Jackson Mobile Corporation et al. [00:00:07] Speaker 01: at balance. [00:00:08] Speaker 01: Mr. John Mulgan for the New Balance, Mr. Patak for the Appellate. [00:00:14] Speaker 03: Good morning, counsel. [00:00:16] Speaker 03: Good morning. [00:00:18] Speaker 03: Thank you, your honors, and may it please the court. [00:00:20] Speaker 03: In this case, like dozens of others around the country, state or local government seeks to impose liability on energy providers for injuries allegedly caused by global climate change. [00:00:30] Speaker 03: This appeal presents the question of whether the case belongs in federal or state court. [00:00:34] Speaker 03: Federal jurisdiction exists over the district's claims for multiple reasons. [00:00:39] Speaker 03: To begin with, the district's claims are governed by federal common law. [00:00:43] Speaker 03: However, the district seeks to frame its theories of liability. [00:00:46] Speaker 03: It is seeking relief for injuries allegedly caused by global climate change. [00:00:51] Speaker 03: And its theory of causation of those injuries depends on worldwide greenhouse gas emissions. [00:00:57] Speaker 03: As the Second Circuit recently held in the city of New York, where a party seeks to hold fossil fuel producers liable for climate change related harms, federal common law necessarily governs those claims. [00:01:09] Speaker 04: You say federal common law governs, but it's been displaced by the Clean Air Act, which you don't even invoke. [00:01:18] Speaker 03: So if it has been displaced by the Clean Air Act, and it will not surprise you to learn that that is our underlying position here, [00:01:25] Speaker 03: That is a merits question. [00:01:27] Speaker 03: It doesn't go to the question of jurisdiction. [00:01:30] Speaker 03: And the question of jurisdiction, Judge Katzis, our fundamental submission is that federal law governs here really for the reasons that the Supreme Court has set out in a series of cases culminating with AEP. [00:01:43] Speaker 04: Where you have the complete preemption doctrine, which is on the outer bounds of well pleaded complaint rule, [00:01:53] Speaker 04: And you have federal common law, which is on the outer bounds of our authority. [00:01:58] Speaker 04: And there's a federal statute which occupies this field, and it either completely preempts or it doesn't. [00:02:06] Speaker 04: And you're asking us to ignore the federal statute and create an exception to the well-pleaded complaint rule just based on policy judgments in the air. [00:02:18] Speaker 03: So there's a lot in that question, Judge Katz. [00:02:21] Speaker 03: Let me address each of those premises in turn. [00:02:24] Speaker 03: So first, I would certainly recognize that we are not invoking the doctrine of complete preemption here. [00:02:31] Speaker 03: And that's the simple reason that here we're not arguing that it is a federal statute that does the jurisdictional work. [00:02:38] Speaker 03: We are arguing that it is federal common law that does the jurisdictional work. [00:02:43] Speaker 03: But as the Wright Miller treatise and other sources have indicated, it would be anomalous to treat a situation where federal common law supplies the rule of decision differently from a situation in which a federal statute does so. [00:02:58] Speaker 03: Where is here federal common law supplies the rule of decision? [00:03:02] Speaker 03: the claim arises under federal common law. [00:03:05] Speaker 03: And then the sole question that I think that remains is whether or not removal is appropriate in this circumstance. [00:03:11] Speaker 03: So I think the Supreme Court has made clear in the Oneida Indian Nation case and the National Farmers Union case, among others, that where federal common law supplies the rule of decision, the claim arises under federal law. [00:03:22] Speaker 04: Maybe so, but you're asking us to assess the relationship between state law [00:03:31] Speaker 04: and federal law without reference to the federal statute that is central to all of this. [00:03:43] Speaker 04: I don't see how we can do this. [00:03:46] Speaker 04: You might or might not be right that federal common law would have governed under Milwaukee 1 without the Clean Air Act, but we have the Clean Air Act. [00:03:57] Speaker 03: But I think that that is a merits question. [00:03:59] Speaker 03: In other words, once this court concludes that the claim and issue arises under federal law, [00:04:06] Speaker 03: Then the question of whether a federal statute displaces that claim is a merits issue that would be resolved presumably on a motion to dismiss. [00:04:15] Speaker 03: So in other words, Judge Katzis, I think the way that we think that this would work is that if this court agrees with us that this case is subject to the rule of Milwaukee 1 AEP and the other cases on which we rely, the court should then conclude that there is federal jurisdiction. [00:04:32] Speaker 03: And at that point, the question would become, do the plaintiffs have [00:04:36] Speaker 03: a valid cause of action. [00:04:38] Speaker 03: And one reason why they would not is if the cause of action is displaced by the Clean Air Act. [00:04:43] Speaker 03: And I think that the Supreme Court has made clear in the 190 Indian Nation case, Standard Oil, and others, that that is how the analysis should work. [00:04:51] Speaker 03: In other words, the jurisdictional question is discreet from the merits question of whether or not there is a valid cause of action. [00:05:00] Speaker 04: But the jurisdictional analysis here is complete preemption. [00:05:07] Speaker 03: Well, I think it is analogous in some respects to complete preemption. [00:05:11] Speaker 03: We are, again, not invoking the complete preemption doctrine because we're not relying on... You need more than a preemption defense. [00:05:19] Speaker 03: Correct. [00:05:19] Speaker 03: But I think the reason we have... You need preemption plus. [00:05:23] Speaker 03: So let me explain why I think we have more than a preemption defense, which was another part of your original question. [00:05:28] Speaker 03: Right. [00:05:28] Speaker 03: I think that the reason we have more than a preemption defense is that you've got to look at what federal common law is doing here. [00:05:36] Speaker 03: And I really do think that this is an area in which federal common law is not merely operating as a defense. [00:05:43] Speaker 03: It is actually supplying the rule of decision. [00:05:46] Speaker 03: I think we know that from how the Supreme Court has described the operation of federal common law in this context. [00:05:53] Speaker 03: If you look at cases like Milwaukee 2, if federal common law exists, it is because state law cannot be used. [00:05:59] Speaker 03: Milwaukee 1, there is an overriding federal interest in the need for a uniform rule of decision. [00:06:05] Speaker 03: And why I think this is critical is it goes not just to how federal common law operates here. [00:06:12] Speaker 03: It goes specifically to the issue of the well-feeded complaint rule. [00:06:16] Speaker 03: I want to address that as well directly. [00:06:19] Speaker 00: I'm sorry. [00:06:19] Speaker 00: I'm having trouble getting past why you can rely on federal common law if it's been displaced by the Clean Air Act. [00:06:26] Speaker 03: I think, Judge Pan, for the simple reason that this is an area in which, again, federal law supplies the rule of decision. [00:06:34] Speaker 03: And that is because, ultimately, we think that it would be inappropriate for a state to project its policy preferences onto other states. [00:06:43] Speaker 00: But the federal law is the Clean Air Act, and you're not invoking it. [00:06:47] Speaker 03: Well, it may very well be that the Clean Air Act displaces the cause of action. [00:06:54] Speaker 03: In other words, [00:06:56] Speaker 03: I think that the two steps of the analysis are the two steps contemplated by the Supreme Court when the Supreme Court has said [00:07:03] Speaker 03: but the question of whether there's a valid cause of action is discrete. [00:07:08] Speaker 03: Displacement operates kind of analogously to preemption in the sense that when you're operating in an area in which federal law governs, then if there's a federal statute that comes in and displaces any cause of action. [00:07:20] Speaker 00: I understand that's your argument, but I can't get past step one when you're saying federal law governs. [00:07:27] Speaker 00: The federal law [00:07:28] Speaker 00: in play here is the Clean Air Act, and you're not invoking it. [00:07:31] Speaker 00: I don't see why you can invoke federal common law that's been displaced. [00:07:35] Speaker 00: I'm having trouble with that analytical framework. [00:07:37] Speaker 03: Well, let me do my best to help Judge Pan. [00:07:39] Speaker 03: I think that I would actually point to the Second Circuit's decision in City of New York, which while a case that arose in federal court and therefore does not present the additional wrinkle of how the well-pleaded complaint rule applies, [00:07:52] Speaker 03: I think really does instruct on how this analysis works. [00:07:56] Speaker 03: So that was obviously a case in which the plaintiff, the city of New York, sought to proceed under state law. [00:08:03] Speaker 03: And the Second Circuit, in Judge Sullivan's opinion, said first, no, this is an area in which federal common law supplies the rule of decision. [00:08:11] Speaker 03: But then second, the federal common law cause of action is displaced, and that's why dismissal is appropriate. [00:08:18] Speaker 03: So we're really relying on the first part of that analysis for purposes of the jurisdictional question here. [00:08:26] Speaker 03: In other words, this is an area in which state law cannot supply the rule of decision. [00:08:32] Speaker 03: That's why federal jurisdiction lies here. [00:08:36] Speaker 01: Are there any cases in which federal common law provides the grounds for removal, and then that federal common law is found to be completely preempted by a statute? [00:08:49] Speaker 01: So I mean, that's part of the problem here, right? [00:08:52] Speaker 01: You're relying on federal common law to get into federal court. [00:08:56] Speaker 01: And as you've said, your view is that the Clean Air Act, in fact, preempts federal common law. [00:09:01] Speaker 01: So how do we square those things? [00:09:03] Speaker 03: Sure. [00:09:03] Speaker 03: So I think what I would say, Judge Rao, on that specific aspect of all of this is that I don't think there's anything odd about the notion [00:09:13] Speaker 03: that there might be federal jurisdiction, but no federal cause of action. [00:09:17] Speaker 03: And I would actually point to the Supreme Court's decision in standard oil for that proposition, because that was a case in which the court said, this is an area in which federal common law applies. [00:09:27] Speaker 03: We're actually not going to recognize a federal common law cause of action. [00:09:32] Speaker 03: We don't think that the federal interest justifies there being a cause of action. [00:09:37] Speaker 03: And again, that's no different. [00:09:39] Speaker 01: That's a little bit different, though, from the federal common law being entirely preempted. [00:09:43] Speaker 03: statute well but I think what I would say is that we're not arguing that federal common law is being completely preempted in the sense of the doctrine of complete preemption which is of course an alternative way of getting into federal court what we're saying is that once you have federal jurisdiction that any cause of action if in fact there is a federal common law cause of action would be displaced by the federal statute which provides that there is no remedy [00:10:12] Speaker 03: And again, I think that the Supreme Court has recognized that those are two discrete steps. [00:10:18] Speaker 03: But I do want to add one further thing to our argument, which I think is an important premise of our argument. [00:10:24] Speaker 03: And that is that it seems as if the district is setting great store by the well-pleaded complaint rule here. [00:10:32] Speaker 03: And I think that the well-pleaded complaint rule doesn't help the district for the simple reason that, as Judge Strauss indicated in his [00:10:40] Speaker 03: Concurring opinion in the Minnesota case in the Eighth Circuit. [00:10:44] Speaker 03: This is simply another form of artful pleading. [00:10:47] Speaker 03: A plaintiff cannot avoid the application of a federal rule of decision where that federal rule of decision provides the exclusive rule of decision simply by pleading a claim under state law. [00:10:59] Speaker 03: It would be no different from a circumstance in which a plaintiff on a matter of choice of law pleads the wrong state's law. [00:11:07] Speaker 03: I think under those circumstances, a court looks to the substance of the claims. [00:11:12] Speaker 00: I think what's really critical- So if you could address that then, because the substance of the claim is a claim under the DC Consumer Procedures Protection Act, and it's about making misstatements or misleading statements about global warming. [00:11:27] Speaker 00: How, where is the federal question or the federal law that's necessary to be applied there? [00:11:33] Speaker 03: I think the critical point here, Judge Pan, is that these are claims seeking relief for injuries allegedly caused by global climate change. [00:11:42] Speaker 00: And in our view, that is... Well, it's not about global climate change. [00:11:45] Speaker 00: It's about lying about global climate change. [00:11:48] Speaker 00: And that's an important difference, isn't it? [00:11:50] Speaker 03: Well, I think that this might be a different case if what the district was seeking were [00:11:55] Speaker 03: more limited remedies than more traditional sorts of remedies that are provided on consumer protection claims. [00:12:01] Speaker 03: But I want to point the court to the critical parts of the complaint that made clear that what the district is seeking here is something much different. [00:12:09] Speaker 03: If you take a look at the complaint, at pages 122 to 123 of the joint appendix, the district is focusing on the climate-related harms to the district, heat waves, rising sea levels, flooding, and the like. [00:12:22] Speaker 03: And then the district seeks [00:12:24] Speaker 03: very open-ended relief in the form of damages, restitution, and the like. [00:12:28] Speaker 03: And the district has never at any stage of this litigation disavowed an intent to seek damages or [00:12:34] Speaker 03: physical injuries and property damage resulting from the effects of climate change. [00:12:39] Speaker 00: I didn't read the complaint that way. [00:12:41] Speaker 00: I thought, I think there might be a proof issue here that they were saying that DC consumers relied upon these misstatements and made purchases of, I guess, oil and gas products that they otherwise would not have. [00:12:55] Speaker 00: And I think it's a question for the district as to how you would calculate these damages. [00:13:00] Speaker 00: But I guess the fact that they spent more money on these products than they otherwise would have, that was what I understood the damages to be. [00:13:09] Speaker 03: Well, I think it's a question for my friend Mr. Fatah as to whether or not that is all the district is seeking. [00:13:14] Speaker 03: So if the district were seeking to recover, you know, only the money that consumers paid for fossil fuel products, they would not have paid in the absence of the alleged misrepresentations. [00:13:25] Speaker 03: That might be one thing, but we read the complaint and even the district's brief before this court to be seeking something far more ambitious. [00:13:34] Speaker 03: Page 17 of their brief, the relief sought is to remedy [00:13:37] Speaker 03: local harms caused by defendant's deceptive advertising. [00:13:41] Speaker 03: I think that has to be understood in terms of the allegations in the complaint that I just cited where the district seems to be seeking relief for the effects of climate change. [00:13:53] Speaker 00: Oh, from the advertising, that's different. [00:13:55] Speaker 03: Well, but again, in terms of what the damages are, I think that the district is seeking to recover [00:14:02] Speaker 03: damages for the climate-related harms to the district. [00:14:04] Speaker 03: And this is a question that the court will have ample opportunity to ask my friend on the other side to really clarify what they're seeking. [00:14:12] Speaker 03: But I don't think that this is just a matter of calculation. [00:14:14] Speaker 00: Does your claim then rest upon them asking for damages for climate change? [00:14:21] Speaker 00: If that's not what they're asking for, do you lose? [00:14:23] Speaker 03: I think it would be a much [00:14:24] Speaker 03: A harder case and I want to give it something of an it depends answer to this because we have not heard any limitation yet on the damages that they are seeking. [00:14:36] Speaker 03: I think if the damages are effectively damages that seek to alter the production of fossil fuels, then there might still be an argument that federal common law applies. [00:14:47] Speaker 03: But our submission as we read this complaint is a much more straightforward one. [00:14:52] Speaker 03: It is that what the district is doing is seeking damages for injuries allegedly caused by global climate change. [00:14:59] Speaker 03: And that implicates all of the considerations that underlay the Supreme Court's decisions [00:15:05] Speaker 03: culminating an AEP. [00:15:07] Speaker 00: I understand that. [00:15:07] Speaker 00: I'm just wondering what happens to your argument if it turns out that your assumption that they're asking for damages for global climate change is wrong. [00:15:15] Speaker 00: What happens to your arguments then? [00:15:17] Speaker 03: I mean, I think that the district is dancing on the head of a pin here when it says that the relief that is seeking is to remedy. [00:15:24] Speaker 00: Think of this as a hypothetical. [00:15:25] Speaker 00: Hypothetically, say they're not asking for that. [00:15:27] Speaker 00: That's not what they're asking for at all. [00:15:30] Speaker 00: What happens to your argument? [00:15:31] Speaker 03: I think it's a harder argument because I think we would be left with the argument that the relief that is being sought is effectively relief that is seeking to seek [00:15:40] Speaker 03: recovery for injuries caused by climate change. [00:15:42] Speaker 00: So your arguments do hinge on that. [00:15:44] Speaker 00: So whether it's explicit or implicit, your arguments rely on the notion that the district is asking for damages for global climate. [00:15:52] Speaker 03: What I would say, Judge Pan, is that I think that the fact that they're seeking these broader damages is what illustrates that this is not really a paradigmatic consumer protection claim. [00:16:03] Speaker 03: And the district, I think, is not shy about this in the complaint. [00:16:06] Speaker 03: If you look at the very first page of the complaint, [00:16:09] Speaker 03: On page 80, the district says the deceptive marketing enabled the unabated and expanded extraction, production, promotion, marketing, and sale of defendant's fossil fuel products. [00:16:19] Speaker 03: So I would submit that when you look at the claim as a whole, which is what a court is supposed to do when applying the well-pleased complaint rule, this is not really a claim that is narrowly targeted to marketing. [00:16:31] Speaker 03: This is a claim that really focuses on global greenhouse gas emissions. [00:16:35] Speaker 03: And what I think makes that [00:16:37] Speaker 03: So unusual is that the relief that is being sought inevitably has to flow through global greenhouse gas emissions, which involve fossil fuels produced not just by these defendants, but of course by companies worldwide decisions to use fossil fuels. [00:16:53] Speaker 03: And while even if the district said we're only recovering from the effects of climate change in the district, all of this is intermediated through global greenhouse gas emissions worldwide. [00:17:03] Speaker 03: That's what makes this different. [00:17:04] Speaker 04: You may or may not be right. [00:17:06] Speaker 04: about what they're asking for. [00:17:09] Speaker 04: But all of this line of inquiry about remedies just seems like an argument not for removing or not any dispositive motion. [00:17:22] Speaker 04: It's just for narrowing the scope of the relief they can seek. [00:17:26] Speaker 04: I mean, when you look at the prayer for relief at 156, [00:17:33] Speaker 04: It can easily be construed as asking for plain vanilla statutory remedies and join the defendants from violating the statute. [00:17:43] Speaker 04: And there's a site to a provision which I assume affords injunctive relief. [00:17:49] Speaker 04: I mean, they can do that, right? [00:17:52] Speaker 04: There's no, there's no preemption or complete preemption of a, just a narrow fraud claim to not misrepresent. [00:18:01] Speaker 03: I think though we have understandably, I think, focus on the monetary relief that's being sought. [00:18:06] Speaker 03: I think even with regard to the injunctive relief. [00:18:09] Speaker 04: What damage, or suppose their damages theory is, you know, the amount that environmentally conscious DC consumers, the extra gas they wouldn't have bought had they known about [00:18:22] Speaker 03: I think that that would be analytically, arguably different for the reasons that I suggested to judge can't even the injunctive relief judge. [00:18:33] Speaker 03: Sorry, I'm interrupting you. [00:18:35] Speaker 03: Go ahead. [00:18:36] Speaker 03: Well, that's your prerogative, not mine. [00:18:38] Speaker 03: I think with regard to the objective relief. [00:18:40] Speaker 03: What I would say is, if they were seeking injunctive relief that seeks to prohibit only the making of misleading statements or omissions. [00:18:49] Speaker 03: Again, analogously, that would be limited. [00:18:51] Speaker 03: Here the injunctive relief is injunctive relief prohibiting defendants from violating the CPPA. [00:18:56] Speaker 03: That may be the same. [00:18:58] Speaker 03: It may be broader. [00:18:59] Speaker 03: It's unclear. [00:18:59] Speaker 03: And I think that that ambiguity is studied here because I do think that the district, if it's able to proceed in superior court, wants to retain the ability to seek much more ambitious remedies. [00:19:09] Speaker 03: And so I think at a minimum that clarification is potentially important to the analysis, but I think that our fundamental submission here is that if we are correct that the relief that is being sought is broader. [00:19:20] Speaker 03: that implicates all of the rationales for the application of federal common law in this context. [00:19:26] Speaker 03: It is a state or in this case, the district seeking to project its policy preferences on to other states in violation of the constitutional scene. [00:19:35] Speaker 03: I would just add one point in response to Judge Rao's earlier question, which is, I think that that's why it's not odd [00:19:42] Speaker 03: to look at the application of federal common law, even if it turns out that there's no federal common law cause of action. [00:19:49] Speaker 03: I would grant that I think some of the other circuits that have considered this issue have really struggled with that. [00:19:54] Speaker 03: But I think that the reason why it's appropriate to look to federal common law is precisely because there is an underlying constitutional principle here. [00:20:03] Speaker 03: It explains why federal law should apply and we obviously cite, you know, a number of cases that essentially rely on the underlying principle of equal footing to explain why it is in the context of interstate pollution in particular would be inappropriate for a state other than the point source state. [00:20:21] Speaker 03: to project its policy preferences to conduct that takes place outside the state's board. [00:20:26] Speaker 01: Mr. Schammaker, can we talk a little bit about removal jurisdiction under Grable? [00:20:30] Speaker 01: Sure. [00:20:30] Speaker 01: So under Grable, the state law claim must necessarily turn on federal law. [00:20:36] Speaker 01: And so if that is going to be the hook for removal jurisdiction, what specifically is the federal law that the state law claim here arises or turns on? [00:20:48] Speaker 03: So I would say three things, Judge Rao. [00:20:49] Speaker 03: First, that we obviously resist the proposition that complete preemption or grable are the only ways of getting into federal court. [00:20:57] Speaker 03: That's what we've obviously been discussing over the last 15 minutes. [00:21:01] Speaker 03: Second, we would submit that the easiest way to conclude that there is jurisdiction under grable is if the court agrees with us that federal common law applies in this context. [00:21:11] Speaker 03: Because if a claim implicates federal common law, we would submit that it necessarily raises [00:21:16] Speaker 03: substantial question to federal law, because each of the elements of the claim would be. [00:21:21] Speaker 01: So assuming the panel is skeptical about your federal common law argument, what other federal law is there? [00:21:27] Speaker 01: Because the briefing is very murky on this, sort of gestures at regulations and federal policies, but. [00:21:36] Speaker 03: Yeah, so I would say, I promised I was going to say one more thing, but I'm actually going to say two. [00:21:40] Speaker 03: I would say first that federal, we don't think that it is necessary for, [00:21:47] Speaker 03: Grable jurisdiction, that an essential element of the claim be an element of federal law. [00:21:54] Speaker 03: And we, of course, cite a number of cases that pose a Grable in the lower courts for that proposition. [00:21:59] Speaker 03: I think what we would say is that the claims here arise under federal law because they necessarily implicate the actions taken by federal officers in setting the balance between energy production [00:22:10] Speaker 03: and environmental protection, that the claims would ask this court to second guess those judgments and really to use district law to hack policy judgments made by the federal government, both in the domestic sphere and international. [00:22:23] Speaker 03: And that I would also submit is a reason why the application of federal common law follows a for sure from the cases that involve mere interstate. [00:22:31] Speaker 01: Does that argument then also turn on the scope of remedies that DC is seeking? [00:22:36] Speaker 01: You know, to the extent that they're seeking certain remedies, there is an interference with the decisions of federal actors. [00:22:43] Speaker 03: I think it's certainly true that the more ambitious the remedies, and in particular, to the extent that the remedies trench upon policy judgments made concerning the balance that inevitably is struck, again, between energy production and environmental protection, sure, that is relevant to the analysis. [00:23:00] Speaker 03: I would submit that it is also relevant to the analysis with regard to the other grounds for removal on which we rely. [00:23:06] Speaker 03: both federal officer removal and Oxler removal, I think that to the extent that Judge Kelly rejected those arguments, it was because he took, in our view, a narrow view of the claims, and he focused once again solely on the fact that these were claims that were targeted at the misrepresentation, not at the broader context of the claims and the relief that is being sought. [00:23:28] Speaker 03: I think with regard to both federal officer removal and Oxler removal, [00:23:32] Speaker 03: those are both types of removal that require only a very broad nexus between the federal activity or the activity on the outer continental shelf and the claims at issue. [00:23:44] Speaker 03: And so I think that it was only through taking this narrow view of the claims themselves that Judge Kelly could conclude that the nexus requirements were not satisfied. [00:23:53] Speaker 01: Mr. Mr. Cheney and ask you a question. [00:23:57] Speaker 01: There's some allusion to this in your briefing, but I'm wondering if it matters for the purpose of thinking about whether federal common law applies here that the District of Columbia is not a state. [00:24:08] Speaker 03: I think it does sort of place another an additional thumb on the scale for the reason that we set out in our brief. [00:24:16] Speaker 03: The district's authority is authority [00:24:19] Speaker 03: given by Congress to promulgate local laws. [00:24:22] Speaker 03: Obviously, the CPPA is an example of that. [00:24:27] Speaker 03: And so I think in some sense, this is really analogous to the lawsuits that are being brought by, not by states, but by localities. [00:24:35] Speaker 03: And to the extent that what is really going on in the underlying litigation more broadly here is a set of states making one set of policy judgments, other states, as reflected by the amici here, [00:24:47] Speaker 03: making other policy judgments. [00:24:49] Speaker 03: It seems a fortiori that where you have the district operating in a local lawmaking capacity and states, some states on the other side that have different policy judgments, but that really does implicate the underlying concern that triggered the application of federal common law in the first place, which is a real concern about states opposing other states with policy judgments about something of an interstate quality. [00:25:15] Speaker 03: That is what triggers the application of federal law. [00:25:18] Speaker 03: These cases arose in the context of the Supreme Court's original jurisdiction, but the court has made clear in AEP that the same considerations apply, even whereas here the defendants are private parties. [00:25:31] Speaker 04: Another problem I have with the federal common law analysis is you're sort of going back to Milwaukee one and [00:25:45] Speaker 04: taking the Clean Air Act out of this, right? [00:25:49] Speaker 04: If we were just starting from scratch with all extant and trying to figure out whether the plaintiffs can state the federal claim that you're necessarily, you're saying they're necessarily stating, right? [00:26:08] Speaker 04: We would start with the federal statute [00:26:13] Speaker 04: We would look at the remedies and causes of action afforded by the federal statute. [00:26:21] Speaker 04: We would say, we don't do implied rights of action anymore. [00:26:26] Speaker 04: And that would be the end of it, right? [00:26:31] Speaker 04: No private right of action under the Clean Air Act, which balances the competing state and federal interests. [00:26:42] Speaker 04: provides a backdrop for any analysis of how those interests shake out in a case. [00:26:49] Speaker 04: And you're just sort of pretending it doesn't exist. [00:26:54] Speaker 04: And, you know, in a world where we no longer create private rights of action, when we have a statute that frames the federal interests pretty clearly, you know, you're asking us to create the private right of action just based on [00:27:11] Speaker 04: federal policies in the air. [00:27:14] Speaker 03: So again, I think that this ultimately comes down to the one step versus two step issue that we discussed earlier. [00:27:23] Speaker 03: And I think that the Supreme Court really has made sort of remind me that to so that there is a sort of jurisdictional component and a merits component. [00:27:33] Speaker 03: What we are discussing. [00:27:34] Speaker 03: I think what you just said really in our view goes to the merits [00:27:38] Speaker 03: In other words, if we were successful on the jurisdictional argument, and we were back here two years from now on an appeal from the granting of a motion to dismiss, I think what I would say to you is precisely that, that we have displacement here because the Clean Air Act provides for no private cause of action. [00:27:57] Speaker 03: But I would point to the cases that we cite at page 30 of our opening brief, Oneida Indian Nation and Standard Oil, which made clear, in the words of the Supreme Court of Oneida Indian Nation, [00:28:08] Speaker 03: that a claim governed by federal common law rises under federal law for jurisdictional purposes, even if that claim may fail at a later stage for a variety of reasons. [00:28:19] Speaker 03: Now, I recognize that there is a sense in which, as an intuitive matter, it may seem odd to sort of think about whether federal common law applies if there is no federal common law remedy. [00:28:33] Speaker 03: But again, that's exactly what the Supreme Court did in the standard oil case. [00:28:37] Speaker 03: It didn't even get to displacement. [00:28:38] Speaker 03: It just said, we, the Supreme Court, exercising our federal common lawmaking authority, are not going to recognize the cause of action. [00:28:46] Speaker 00: Can I ask you, there's a quote in American Electric Power where the court says, in light of our holding that the Clean Air Act displaces federal common law, the availability well known of a state lawsuit depends inter alia on the preemptive effect of the federal act. [00:29:02] Speaker 00: Doesn't that mean that we are back to the preemptive effect of the federal act? [00:29:06] Speaker 00: Because we're talking about jurisdiction here. [00:29:09] Speaker 03: I don't think so, Judge Pan, because I think that what that sentence is contemplating is a state applying its own law where you have a point source, for instance, within the state. [00:29:21] Speaker 03: And that is a context in which the state has power to regulate, to apply state law, going back to the Supreme Court's decision in Ouellette. [00:29:29] Speaker 03: among others. [00:29:31] Speaker 03: And I think in that context, of course, you would apply an ordinary preemption analysis because the state would have the power to apply it. [00:29:38] Speaker 00: So you think this quote refers to an ordinary preemption analysis and not a jurisdictional analysis? [00:29:42] Speaker 03: I think that that is correct, which is to say it's referring to a situation in which the state retains the authority to regulate. [00:29:49] Speaker 03: The last thing I would say in response to Judge Katz's last question, which I think is related to this, is that [00:29:55] Speaker 03: One anomaly of adopting the district's approach here is that it would really leave state courts, or in this case, district courts, the superior court, in the power of determining the content of federal common law. [00:30:10] Speaker 03: And of course, ordinarily, that is the province of a federal court to determine. [00:30:16] Speaker 03: And I would come back to the proposition that this is an area in which the Supreme Court has made clear that federal common law is not simply operating as a defense, that it supplies the rule of decision. [00:30:28] Speaker 04: Let me try it one more way, which is I take your point. [00:30:34] Speaker 04: We have to be careful about distinguishing jurisdictional questions from merits ones. [00:30:43] Speaker 04: right? [00:30:43] Speaker 04: But when we're doing the jurisdictional analysis, I'm thinking of it as complete preemption, but you're thinking of it as you need to establish that there is a federal rule of a federal common law rule of decision right in order to do that. [00:31:01] Speaker 04: you have to compare, you have to do a conflict analysis comparing the operation of the state cause of action or state law rule against federal interests. [00:31:17] Speaker 04: You have to find some substantial impairment of federal interests. [00:31:21] Speaker 04: So if you can do that by reference to federal interests in the air, [00:31:30] Speaker 04: a la Milwaukee one at the jurisdictional stage, which seems very weird to say, but you know, once you consider a statute that occupies the field and balances all of this stuff that you have to ignore the statute when doing that, you know, conflict analysis as relevant to jurisdiction. [00:31:52] Speaker 03: So let me try perhaps a slightly different way of framing this that hopefully helps to capture what I think is the intuitive reason why [00:31:59] Speaker 03: This is the right way to think about this. [00:32:01] Speaker 03: I think the right way to think about this is to sort of start from the proposition, is this an area in which state law or federal law supplies the rule of decision? [00:32:11] Speaker 03: And the merits question then becomes, what is the content of federal law? [00:32:16] Speaker 03: So in other words, to the extent that we think that there is a constitutional underpinning in this context, as perhaps there is in other contexts in which federal common law applies, because of the fact that in the context of interstate pollution, where a state other than the point source state is trying to apply its law, it really is projecting its law beyond its boundaries. [00:32:36] Speaker 03: Then I think the right way to think about this is it doesn't matter whether or not federal common law supplies a rule of decision. [00:32:42] Speaker 03: It doesn't matter whether it's displaced [00:32:44] Speaker 03: If it is displaced, state law doesn't somehow come back to life for jurisdictional purposes. [00:32:50] Speaker 03: This is an area in which federal law necessarily exclusively supplies rule of decision. [00:32:56] Speaker 03: And then the merits question is, what is that rule of decision? [00:32:59] Speaker 03: Is there a valid cause of action? [00:33:01] Speaker 03: I think that that is what the Supreme Court was capturing. [00:33:04] Speaker 03: in the Winona Indian Nation case and standard oil cases that arise in other federal common law making contacts. [00:33:10] Speaker 00: So your federal common law argument also relies on framing this case as one about global warming writ large. [00:33:19] Speaker 00: If it is framed as a case about consumer protection and the DCC PPA, then there's no federal common law argument. [00:33:26] Speaker 03: Yes, but I would say that I don't think that it's dispositive to that as in any case involving [00:33:32] Speaker 03: an analysis under the well-pleaded complaint rule. [00:33:35] Speaker 03: What source of law the district invokes? [00:33:38] Speaker 03: In other words, I don't think that it is sufficient for the district to say we're bringing this case under the CPPA, any more than it would be sufficient if I got into a car accident with Mr. Fatah in the district to invoke Kansas law. [00:33:51] Speaker 00: No, I understand. [00:33:53] Speaker 00: You're saying that just because they invoke it doesn't make it so. [00:33:56] Speaker 00: But if we agree that this is a Consumer Protection Act case and not a case that challenges global warming writ large and you have no federal common law. [00:34:06] Speaker 03: But at a minimum that would require a limitation to traditional remedies. [00:34:10] Speaker 03: And I think this complaint lies the entire discussion that I cited. [00:34:14] Speaker 03: at pages 122 to 123 wouldn't be at all. [00:34:17] Speaker 00: That's something we need to ask the district about, what their remedies are. [00:34:20] Speaker 00: Yes. [00:34:21] Speaker 00: But the bottom line is, your entire argument rests upon interpreting this complaint and this lawsuit as one against global warming writ large. [00:34:29] Speaker 03: We're certainly not arguing, Judge Pan, that my clients or any other similarly situated defendants should somehow be categorically immune from traditional causes of action based on misrepresentations. [00:34:43] Speaker 03: What makes this different is that the district is seeking relief effectively. [00:34:48] Speaker 03: And I think explicitly these climate related harms and the fact that the district, even in its brief in response to this precise argument has not disclaimed that relief. [00:34:58] Speaker 03: It's a pretty skeptical that the district is going to do it today at oral arc. [00:35:02] Speaker 04: Suppose they were only seeking narrow remedies. [00:35:06] Speaker 04: Are you making the separate argument that the difference between [00:35:12] Speaker 04: a fraud claim targeting the advertising versus nuisance claim targeting the production of fossil fuels? [00:35:21] Speaker 04: Does that matter or not? [00:35:24] Speaker 04: So I'm sort of thinking in the tobacco context, there's an express preemption provision in the labeling act, which covers all sorts of failure to warn and other claims. [00:35:38] Speaker 04: The Supreme Court said, [00:35:40] Speaker 04: Affirmative misrepresentation claims are different, just targeting something different, the duty not to deceive. [00:35:47] Speaker 04: Is there that? [00:35:50] Speaker 04: How much of a difference does the fraud versus production of fossil fuels? [00:35:56] Speaker 03: Judge Katz, I think when you look at these lawsuits nationwide, the lawsuits that have been the subject of the decisions of other circuits, [00:36:03] Speaker 03: Some of the earlier filed lawsuits in particular really did pursue much more clearly. [00:36:08] Speaker 04: And this one seems designed to look and walk and smell like a fraud claim. [00:36:15] Speaker 03: I think that that is true. [00:36:17] Speaker 03: And I think that that is no accident because these cases, many of which are being brought by the same lawyers, I think are being moved to this earlier stage in the causal chain precisely in an effort to avoid the force of the analogy to interstate pollution [00:36:33] Speaker 03: What I would say in response to that is precisely what the Second Circuit said in the City of New York case, where although the claims were pleaded as nuisance claims, the lawyers were attempting to say, well, these are really claims that relate to the misrepresentation. [00:36:47] Speaker 03: And what the Second Circuit said is that you can't back up to an earlier stage in the causal chain, because that's just another form of artful pleading. [00:36:56] Speaker 03: And artful pleading, quote, cannot transform the city's complaint into anything other than a suit over [00:37:02] Speaker 03: global greenhouse gas emissions. [00:37:04] Speaker 03: And we would submit that that is precisely what is going on here. [00:37:09] Speaker 03: And even in the characterization of the claim itself, again, the claim itself is being described as a claim where the deceptive marketing enabled the unabated and expanded extraction, production, promotion, marketing, and sale of dependent fossil fuel products to the detriment of DC consumers and the public general, which I think underscores that the relief that is being sought here is indeed the broader relief to which we allude. [00:37:32] Speaker 01: Mr. Schengen, for artful pleading, do you have to have complete preemption, though, for the artful pleading doctrine to apply? [00:37:40] Speaker 01: I mean, there's certainly some implication in the Supreme Court's cases that suggests perhaps that's the only thing, the only way in which we can find artful pleading. [00:37:49] Speaker 03: I don't think so, Judge Rao. [00:37:50] Speaker 03: I'm certainly aware of the references. [00:37:52] Speaker 01: So what's the residual category of things? [00:37:54] Speaker 03: Well, I think what I would say is that I just don't think that artful pleading and complete preemption [00:38:00] Speaker 03: should be equated and to the extent that the Supreme Court in places has referred to complete caption and the Grable Doctrine as cases in which you look past the fact that a claim is pleaded under state law. [00:38:12] Speaker 03: I don't think that the Supreme Court has ever indicated that those categories are exclusive. [00:38:17] Speaker 03: And again, I can do no better. [00:38:18] Speaker 01: Have they ever recognized something beyond those categories? [00:38:21] Speaker 03: No, and I would recognize that that's the one place in which I can't point to a Supreme Court case [00:38:26] Speaker 03: that helps us. [00:38:27] Speaker 03: And I think, for instance, that Judge Strauss felt that his hands were tied by the fact that the Supreme Court had not explicitly recognized that. [00:38:36] Speaker 03: But I would say that as a matter of first principles, there's no reason to treat a situation where federal common law applies differently from a situation which a federal statute applies. [00:38:46] Speaker 03: And I can do no better than to cite what Wright Miller says about this when it says that there is no plausible reason why the appropriateness of and need for a federal forum [00:38:54] Speaker 03: to turn on whether the claim arose under a federal statute or under federal common law. [00:38:59] Speaker 01: That section, though, is not about this issue, I believe. [00:39:02] Speaker 03: It is not about the specific issue of removal. [00:39:05] Speaker 03: But on that, I would rely on the Supreme Court cases that say that when a claim is governed by federal common law, it arises under federal law. [00:39:15] Speaker 03: Then I think the sole additional step is, well, is removal appropriate, notwithstanding the well-pleaded complaint rule? [00:39:23] Speaker 03: On that, I'm content to rely on the decisions of other circuits in other contexts, to be sure, but the decisions of other circuits that have permitted removal of claims where federal common law supplies the rule of decision. [00:39:36] Speaker 03: That's the open question that maybe one day the Supreme Court will have to resolve. [00:39:40] Speaker 03: I would grant that I don't have a Supreme Court case point you to or else we wouldn't be here this morning. [00:39:45] Speaker 03: But I do think that that is, you know, ultimately [00:39:48] Speaker 03: consistent with the broader principles that the Supreme Court has set out, and in particular the principle that the jurisdictional question and the merits question are discreet. [00:39:57] Speaker 03: Thank you. [00:39:57] Speaker 03: Mr. Chairman, again, we're giving you your bottle time. [00:40:10] Speaker 04: Good morning. [00:40:11] Speaker 04: Is it the talk? [00:40:12] Speaker 02: The talk, yes. [00:40:13] Speaker 02: Whenever you're ready. [00:40:15] Speaker 02: Thank you, Judge Patsas, and may it please the court. [00:40:17] Speaker 02: Ashwin Pratik for the District of Columbia. [00:40:19] Speaker 02: And let me start with the discussion that my friend had with Judge Pan just now, which is that I can say clearly here that the district is not seeking damages for the physical effects of climate change in the district. [00:40:33] Speaker 02: And I think we've made that clear repeatedly. [00:40:36] Speaker 02: I point the court, first of all, to the complaint itself. [00:40:38] Speaker 02: At the end of the complaint, all they really point to is that we say, [00:40:43] Speaker 02: that we may seek as we can under the CPPA restitution or damages. [00:40:48] Speaker 02: But then when you turn to our remand motion in the district court, we specifically stated that the complaint refers to various harms that will result from the climate crisis, not because they are the target of the district's relief, [00:41:00] Speaker 02: but to illustrate one reason why the defendant's misrepresentations and omissions were and are material to consumers. [00:41:07] Speaker 02: And I think that explains the passages from the complaint that my friend referenced. [00:41:11] Speaker 02: 122 to 123, he suggested that there was no reason we could have included information about the effects of climate change in the district, other than because we're seeking damages for those effects. [00:41:24] Speaker 02: But the very reason that we're including that information in our complaint is because [00:41:29] Speaker 02: we have to show materiality under the CPPA. [00:41:31] Speaker 02: We have to show that particular deceptive comments were material that a reasonable consumer would have wanted to know that information when they made a purchasing decision. [00:41:40] Speaker 02: And we think that the fact that their products cause global climate change and have effects in the district and around the world means that those particular statements would be material to a reasonable DC consumer. [00:41:54] Speaker 00: And what damages are you seeking and how would you calculate those damages and restitution, which is something that you say you're seeking? [00:42:00] Speaker 02: So that obviously would be our burden when this case in discovery or when this case goes to trial. [00:42:06] Speaker 02: And the type of damages we would seek would be quintessential CPPA type damages. [00:42:10] Speaker 02: So if we can show that certain consumers wouldn't have purchased their products, have they known the information that we say they omitted or misled consumers about, then [00:42:19] Speaker 02: We could try to prove damages for restitution to consumers. [00:42:25] Speaker 02: We may also be able to show damages as a result of the fact that we have had to engage in education campaigns to counter the deceptive communications that they've engaged in. [00:42:37] Speaker 02: Perhaps. [00:42:37] Speaker 02: And again, we would have to prove this, and that would be our right. [00:42:40] Speaker 02: And we may choose not to try to prove some of this. [00:42:43] Speaker 02: But we could try to show that competitors to them, clean energy competitors, might have had an advantage had they not engaged in their deceptive statement. [00:42:53] Speaker 02: So I think there are some types of damages and restitution that we might be able to prove at trial. [00:42:59] Speaker 02: But that is not the focus. [00:43:01] Speaker 02: of our claim. [00:43:01] Speaker 02: The focus of our claim is for penalties and injunctive relief. [00:43:05] Speaker 02: Injunctive relief in the sense that they stop engaging in the deceptive and misleading statements that we think that they've been engaging in for decades here, despite knowing that climate change is real and is affecting everyone and despite taking actions themselves, [00:43:20] Speaker 02: to respond to climate change. [00:43:23] Speaker 02: They've raised the height of their platforms. [00:43:24] Speaker 02: They've explored in the Arctic now that the ice is melting up there. [00:43:29] Speaker 02: So they've taken those actions while at the same time engaging in a decades long deceptive plan to try to change consumer behavior in our view. [00:43:39] Speaker 02: And we have to prove that, obviously. [00:43:40] Speaker 02: We have to prove that at trial. [00:43:41] Speaker 01: Now... So, Mr. Protokos, do you see those seeking... will the plan to seek damages? [00:43:47] Speaker 01: A lot of the complaint talks about the fact that there has been an overuse of fossil fuels because of these alleged misrepresentations. [00:43:56] Speaker 01: So, if that's the case, I mean... [00:43:58] Speaker 01: What sort of damages result from that? [00:44:01] Speaker 01: The overuse of fossil fuels? [00:44:02] Speaker 01: I mean, the overuse of fossil fuels instead of alternatives isn't the idea that that overuse has contributed to global climate change and caused damages within the District of Columbia? [00:44:15] Speaker 02: Well, we do think that that overuse has contributed to global climate change, but we will not seek damages for that. [00:44:20] Speaker 02: I can confirm that now to the extent it's helpful to this court. [00:44:24] Speaker 02: We are not seeking damages for the physical effects of climate change in the district. [00:44:28] Speaker 01: When you say physical effects, are there other effects of climate change that the district is seeking damages for? [00:44:33] Speaker 02: No. [00:44:37] Speaker 02: No. [00:44:38] Speaker 01: Aesthetic, or I mean, I don't know what the other damages might be. [00:44:41] Speaker 02: I understand. [00:44:42] Speaker 02: No. [00:44:42] Speaker 02: The answer is no, Judge Rao. [00:44:43] Speaker 02: However, to the extent that consumers made a different purchasing decision as a result of the deceptive comments, we could seek damages for that. [00:44:53] Speaker 02: That would be sort of quintessential restitution under the CPPA. [00:44:56] Speaker 02: We would obviously have to prove that. [00:44:58] Speaker 02: That burden would be on us. [00:45:00] Speaker 02: And whether or not we can prove that will depend on what we discover during discovery, what we can prove at trial. [00:45:05] Speaker 02: But no, we are not seeking damages for the effects of climate change. [00:45:08] Speaker 02: Now, I think my friend suggested that perhaps there would still be, that many of their concerns would still arise and they would still try to remove [00:45:19] Speaker 02: this claim despite it. [00:45:20] Speaker 02: And we obviously think that it doesn't make a difference either way despite my statement today. [00:45:26] Speaker 02: Even if we were seeking those damages, I don't think there would be federal jurisdiction. [00:45:30] Speaker 02: And so I'm happy to begin with the complete preemption argument, which we just don't think applies here for three independent reasons. [00:45:39] Speaker 02: And so the first is simply that there is not a conflict here. [00:45:43] Speaker 02: They have not pointed to any federal common law cause of action that would stand in the place of the deceptive the consumer deception claim that we have brought here. [00:45:55] Speaker 02: And I haven't seen that claim offered here. [00:45:58] Speaker 02: today. [00:45:59] Speaker 02: And so that's the first reason. [00:46:00] Speaker 02: The second reason, which is an independent reason, is that federal common law just simply doesn't exist in this area anymore. [00:46:07] Speaker 02: And that's because the Supreme Court made this very clear in AEP. [00:46:11] Speaker 02: I think AEP was crystal clear on this point. [00:46:14] Speaker 02: I just point the court to some language from that decision. [00:46:17] Speaker 02: When Congress addresses a question previously governed by a decision rested on federal common law, the need for such an unusual exercise of lawmaking by federal courts [00:46:26] Speaker 02: Disappears it's off the books and at another point, the Clean Air Act and the EPA actions it authorizes displace any federal common law right to see abatement of carbon dioxide emissions. [00:46:38] Speaker 02: We think it would be quite strange to say that an entire body of federal common law has been wiped off the books as a result of a congressional act, but then to hinge federal jurisdiction and removal authority on that particular area of federal common law. [00:46:52] Speaker 02: And I would just note that some of the same parties that are here today made the argument in the Kivalina decision in the Ninth Circuit that the Clean Air Act [00:47:01] Speaker 02: totally displaces federal common law. [00:47:03] Speaker 02: So in our view, really, what's good for the goose is good for the gander. [00:47:06] Speaker 02: If you're saying that federal common law is simply not an avenue for relief in this area anymore, we really think that it cannot form the basis for federal jurisdiction. [00:47:17] Speaker 02: Rather, the Clean Air Act controls. [00:47:19] Speaker 02: So they are welcome to make, though they haven't made in this appeal, the arguments that the Clean Air Act completely preempts this area, and therefore they can come to federal court. [00:47:29] Speaker 02: Or they can argue, and I'm sure that they will argue, in DC Superior Court and before the DC Court of Appeals that the Clean Air Act preempts, just ordinarily preempts these claims. [00:47:39] Speaker 02: They're welcome to make that argument. [00:47:40] Speaker 02: We obviously disagree with that. [00:47:42] Speaker 02: And we will counter that argument. [00:47:44] Speaker 02: And if you go look at the DC Court of Appeals, if you plug in preemption into US law, they routinely hear preemption claims, as many state courts do. [00:47:54] Speaker 02: And they're well-equipped to hear those claims. [00:47:56] Speaker 04: What do you make of the argument [00:47:59] Speaker 04: that ultimately persuaded the Second Circuit. [00:48:04] Speaker 04: I know you think it's not before us, but the argument that in any case about global warming, the extent to which production or statements or anything in the district is a causal driver [00:48:26] Speaker 04: It's tiny. [00:48:28] Speaker 04: It just can't be. [00:48:29] Speaker 04: You need a uniform body of law, which has to be federal law, because no one state can address this. [00:48:42] Speaker 02: So that two responses to the City of New York decision. [00:48:45] Speaker 02: The first is directly to the point that you're raising. [00:48:48] Speaker 02: We think that the claims in this case versus that case are completely different. [00:48:52] Speaker 02: This is a pure state law consumer protection and deceptive comments case, whereas that case was a case raising sort of public nuisance. [00:49:01] Speaker 02: And it went directly to production and sales in particular of the product. [00:49:06] Speaker 02: So we think there's really a big distinction there. [00:49:08] Speaker 02: Now, there's another wrinkle, obviously, with City of New York, which is that it was in a totally different procedural posture than this case. [00:49:14] Speaker 02: So, you know, City of New York, I read to be an ordinary preemption case, not a complete preemption case, and certainly not a case that dealt with removal or federal jurisdiction. [00:49:25] Speaker 02: And the court explicitly distinguished all of the circuit court cases that have held in the opposite direction. [00:49:30] Speaker 02: I mean, the last part of the opinion, which [00:49:35] Speaker 04: addresses the statute, which your friends are not highlighting reads like a preemption defense. [00:49:42] Speaker 04: Clean Air Act preempts the first part of the opinion. [00:49:47] Speaker 04: It's a little circuitous, but there's a separate part of the opinion which says federal common law. [00:49:54] Speaker 04: And the rationales are pretty similar. [00:49:59] Speaker 04: You just can't imagine a state law rule of decision addressing a worldwide [00:50:06] Speaker 02: I agree, Judge Katzis. [00:50:08] Speaker 02: And at the end of the day, I do find that first half of the opinion to be a little bit curious. [00:50:14] Speaker 02: The second half of the opinion, sort of in the same breath, just immediately switches to saying that the Clean Air Act displaced federal common law. [00:50:21] Speaker 02: So it's a bit odd why it is that the Second Circuit even addressed federal common law in an ordinary preemption case. [00:50:29] Speaker 02: I honestly read that first half to be addicted in a way because at the end of the day, the decision was based on the Clean Air Act. [00:50:37] Speaker 02: But that's the reason they couldn't bring those claims because the Clean Air Act preempted the claims. [00:50:42] Speaker 02: So I agree with you. [00:50:44] Speaker 02: something strange, I think, about the Second Circuit decision. [00:50:48] Speaker 02: And I think we have some disagreements with it. [00:50:50] Speaker 02: But I think that case is distinguishable on many, many grounds. [00:50:55] Speaker 02: So it is not the case that this court would somehow have to come into conflict with the Second Circuit on this point. [00:51:00] Speaker 02: And I'd also note that the Second Circuit has heard a case exactly like this, addressing removal and federal jurisdiction that hasn't issued a decision yet. [00:51:09] Speaker 02: But it's here and that as a separate matter. [00:51:11] Speaker 04: And it's curious. [00:51:15] Speaker 04: Does it support Mr. Shanmugam in the sense, what they're saying is whether you think of this as a preemption phenomenon or a complete preemption phenomenon, whatever it is, the rule of decision has to be federal. [00:51:40] Speaker 04: And that gets you preemption at a minimum [00:51:46] Speaker 04: You say that's a defense you need. [00:51:51] Speaker 04: You need a substitute cause of action. [00:51:54] Speaker 04: It can't be state law because it's preempted. [00:51:57] Speaker 04: If it's a if there is a substitute cause of action, it has to be federal, and that sounds like at least a CF to complete preemption. [00:52:05] Speaker 04: And so. [00:52:07] Speaker 04: I mean, all roads lead to this not working because it's so obvious that state law can't operate in this area. [00:52:15] Speaker 02: I understand what you're saying, Judge Katz. [00:52:17] Speaker 02: So obviously, we think there's a distinction in this case because this is a consumer deception. [00:52:21] Speaker 02: It's not a public newspaper. [00:52:22] Speaker 02: But putting that aside, I think there's still a lot of hurdles that they would need to get over. [00:52:27] Speaker 02: So really, there are two avenues by which you can get removal jurisdiction outside of the well-pleaded complaint rule, and that is either grable or complete preemption. [00:52:37] Speaker 02: They sort of suggest, and I think this is what they're kind of relying on City of New York for, that there's some sort of third nebulous way having to do with federal common law. [00:52:47] Speaker 02: And I just don't see that anywhere in the case law. [00:52:50] Speaker 02: There is no Supreme Court case that they can cite for this proposition. [00:52:54] Speaker 02: And I think it would be quite a leap to suggest that federal common law can serve, that that doesn't exist anymore because it's been displaced, can serve, [00:53:06] Speaker 02: as a basis not only to preempt a state law claim, but to completely preempt a state law claim such that you can bring it into federal court. [00:53:13] Speaker 02: And I think that actually goes against a lot of the more recent decisions in the Supreme Court. [00:53:18] Speaker 02: The Supreme Court, in the last sort of 20 years, has tried to clean this area up, right? [00:53:22] Speaker 02: Justice Roberts refers to the Jackson Pollock painting that existed before Grable. [00:53:26] Speaker 02: And so Grable and Gunn, I think, really together tried to tell federal courts, look, [00:53:32] Speaker 02: you are supposed to go through the Grable analysis. [00:53:35] Speaker 02: That's the ordinary way that you get around the well-pleaded complaint rule, which means that there has to be a necessary federal legal question raised on the face of the complaint that the plaintiffs are omitting to try to get into state court. [00:53:49] Speaker 02: And so it's really unclear what that is here. [00:53:52] Speaker 02: They suggest some policy ideas about global climate change and the national response to [00:53:59] Speaker 02: to that crisis, but they don't suggest that there's any specific legal issue, even in federal common law, I might add. [00:54:07] Speaker 01: They suggest that there is federal common law. [00:54:09] Speaker 01: I mean, you know, the fact that the Supreme Court hasn't recognized this doesn't mean that the category conceptually would not exist. [00:54:18] Speaker 01: you know, arguing from first principles maybe, why would that category not exist? [00:54:23] Speaker 01: Why would it be limited only to complete preemption and, you know, engrable? [00:54:29] Speaker 02: Well, because I think the court has stated that the complete preemption doctrine really is a doctrine about congressional intent. [00:54:35] Speaker 02: I mean, it is a significant thing to say that a particular law totally erases [00:54:40] Speaker 02: an entire field of state law in all 50 states in the District of Columbia, everywhere, right? [00:54:45] Speaker 02: But that's a very substantial thing to say. [00:54:48] Speaker 02: So typically we would say Congress has to say that explicitly. [00:54:51] Speaker 02: There's another wrinkle, I think, as to federal common law. [00:54:54] Speaker 02: And I point the court to the Rodriguez FDIC decision, a unanimous decision by Justice Gorsuch from 2020, where Justice Gorsuch essentially said, [00:55:02] Speaker 02: Look, federal common law is something that courts should shy away from. [00:55:06] Speaker 02: It's not the type of thing that they should do as a regular basis. [00:55:09] Speaker 02: So I think if you kind of take those two things together, I think the court should be very reluctant to suggest that federal common law on its own can completely preempt all state laws and open up federal jurisdiction in a particular case until we've been told explicitly. [00:55:26] Speaker 01: I think we understand the district's complaint here to really be focusing on public, right? [00:55:31] Speaker 01: Because a lot of this is about, you know, fossil fuel use, you know, is causing global climate change. [00:55:38] Speaker 01: People have made choices based on these representations rather than choose alternatives. [00:55:43] Speaker 01: A lot of these claims arguably go to some kind of public harm. [00:55:47] Speaker 01: It's not just harming the consumers who chose to, you know, buy a, you know, [00:55:52] Speaker 01: regular car instead of an electric car or something like that right it's it's a public harm from this. [00:55:59] Speaker 02: That's that's fair enough Judge Rao obviously I sort of. [00:56:03] Speaker 01: And so then that starts to sound like the federal common law of nuisance or something like that where there are these broader public harms it's not really about individual consumer. [00:56:13] Speaker 02: I understand that, but my response is simply that the way that the reason that is not going to be a problem in these types of cases is because you can argue clean air. [00:56:23] Speaker 02: And I do think that is pretty, but I don't think it covers a consumer deception case like this, but it certainly does preempt some. [00:56:31] Speaker 02: state laws in this area. [00:56:33] Speaker 02: And so they could have also made a complete preemption argument about the Clean Air Act, but they haven't, I think, probably because it isn't going to cover a claim like this as well. [00:56:43] Speaker 02: But I don't think the court should be too worried about this notion that you'll have a lot of state law claims that are kind of [00:56:51] Speaker 02: Moving into the realm of what the federal government has decided are the parameters for emissions and production of these types of fuels, because you have the Clean Air Act at the end of the day that preempts many of those claims. [00:57:04] Speaker 02: And there's always an argument. [00:57:07] Speaker 02: So it's not clear to me you need the federal common law to sort of [00:57:12] Speaker 02: come in and do some work that the Clean Air Act isn't. [00:57:15] Speaker 01: And in fact, as the report has said in AEP, that the federal... Do you need federal common law to come in so that there is a federal forum for these claims? [00:57:24] Speaker 02: No, simply because we see this claim as a purely state law. [00:57:29] Speaker 02: And at the end of the day, I think that this consumer deception claim is really far, far afield from any type of claim that's seeking to regulate production or emission. [00:57:40] Speaker 02: We actually have absolutely no quarrel, nor do we think that this claim will in any way affect their ability to produce oil and gas. [00:57:48] Speaker 02: We have no quarrel in this litigation. [00:57:50] Speaker 02: with their emitting greenhouse gases. [00:57:52] Speaker 02: We don't even have a quarrel with them marketing their products in the District of Columbia, as long as they comply with the CPPA and don't market their products in a deceptive or misleading way. [00:58:03] Speaker 02: That is our only quarrel in this case. [00:58:05] Speaker 02: And we think that that really distinguishes this case even from the courts of appeals [00:58:10] Speaker 02: that has gone in our favor, the other courts of appeals that have gone in our favor on this removal question, we see this case as actually being quite a bit easier than even those cases. [00:58:20] Speaker 02: Because many of those cases did bring public nuisance claims that are sort of going after the damages as a result of climate change. [00:58:28] Speaker 01: Does federal law have a different role in displacing DC law as opposed to the law of the state? [00:58:34] Speaker 02: I don't think so. [00:58:35] Speaker 02: And the reason is simply that the federal law. [00:58:37] Speaker 01: And we have some circuit cases saying that. [00:58:39] Speaker 02: Well, you know, I just say, you know, in this particular area, obviously, the Home Rule Act provides the D.C. [00:58:45] Speaker 02: Council with lawmaking authority, the mayor with lawmaking authority. [00:58:48] Speaker 02: We've promulgated a Consumer Protection Procedures Act that does not allow deceptive marketing in the district, just like every other state does. [00:58:56] Speaker 02: Obviously, there's one additional hurdle in the district, which is that any law that we pass can be vetoed by Congress. [00:59:02] Speaker 02: And so there is sort of that layer, but once you get [00:59:06] Speaker 02: pass that and the law is enshrined in the D.C. [00:59:10] Speaker 02: code. [00:59:11] Speaker 01: It's not clear to me... It's just that all of the authority that the District of Columbia has comes from the federal government, which of course is not true of the 50 states, which have their own sovereign lawmaking authority. [00:59:21] Speaker 02: That's right. [00:59:21] Speaker 02: But the our local D. C. Courts are treated as state courts for purposes of removal jurisdiction. [00:59:27] Speaker 02: So it's not clear to me that removal, the removal doctrine should act any differently for the district as opposed to other states, even if there are other distinctions. [00:59:37] Speaker 02: I'm happy to address Grable or the federal officer doctrine or oxlet. [00:59:42] Speaker 02: If the court has any questions on those, I think we actually we understand why we don't support a firm. [00:59:47] Speaker 02: Thank you. [00:59:59] Speaker 03: Are you satisfied with the narrowing? [01:00:02] Speaker 03: I would make a couple of points starting with the narrowing. [01:00:05] Speaker 03: First, with regard to the narrowing, Mr. Fatah for the first time before this court certainly takes the position that the district is no longer seeking damages for the physical effects of climate change or overuse attributed to climate change. [01:00:20] Speaker 03: But I think it was telling that when Judge Pan asked, well, [01:00:23] Speaker 03: What relief are you affirmatively seeking here? [01:00:27] Speaker 03: That the relief was much more open-ended. [01:00:29] Speaker 03: It went beyond merely seeking compensation for consumers who would not have otherwise purchased fossil fuels, but for the alleged misrepresentations. [01:00:38] Speaker 03: For instance, he referred to compensation for clean energy competitors who might have had an advantage, but for the misrepresentation. [01:00:47] Speaker 03: He suggested that the injunctive relief goes beyond [01:00:50] Speaker 03: merely enjoining the defendants from making the statements at issue. [01:00:53] Speaker 03: And he said nothing about the restitution that's being sought or the civil penalties that are being sought, civil penalties that can amount to $10,000 probably in the district's view for every sale of gasoline that took place over the course of many decades. [01:01:08] Speaker 03: And so the relief, I think, remains quite broad here and certainly broader than the more traditional relief that would be sought in a paradigmatic consumer protection [01:01:18] Speaker 00: I thought that your argument does not hinge on the breadth of the relief, but instead that the relief needs to be targeted at global climate change. [01:01:29] Speaker 03: Well, I think that to the extent that the claim here is for relief that relates to injuries related to global climate change, that these broader forms of relief, again, are relief that I think [01:01:43] Speaker 03: could fairly be characterized as precisely that. [01:01:46] Speaker 03: In other words, it goes beyond the relief. [01:01:47] Speaker 03: But they need not be. [01:01:48] Speaker 00: They need not be, though, because all of the examples you just gave can be targeted towards the misrepresentations. [01:01:57] Speaker 03: I think the clearest example of relief that seems broader is the relief to these clean energy companies that Mr. Fatah explicitly referred to. [01:02:08] Speaker 03: But I think, once again, why? [01:02:11] Speaker 00: Yeah, why? [01:02:11] Speaker 00: It seems to me that [01:02:13] Speaker 00: The premise of that is that based on the false statements that your clients allegedly made, people continue to rely on fossil fuels instead of clean energy. [01:02:24] Speaker 03: So that's still targeted to false statements and not to... But again, I think that that is a relief that doesn't go directly to consumers. [01:02:33] Speaker 03: And again, Mr. Fontag said nothing about the restitutionary relief that is being sought here. [01:02:39] Speaker 03: And so I think that this disavowal is not really a complete disavowal because the relief that is being sought is broader than the traditional form of relief to consumers who would not have otherwise purchased. [01:02:52] Speaker 03: And I think the same is true with regard to the injunctive relief that's being sought here. [01:02:56] Speaker 03: Now I do want to say just one quick thing. [01:02:57] Speaker 04: In a conventional broad case, I should know this, I can't think of it off the top of my head, can a competitor [01:03:07] Speaker 04: bring a claim for lost sales, right? [01:03:10] Speaker 04: The defendant commits fraud, which causes consumers to buy the defendant's product rather than the plaintiff's. [01:03:19] Speaker 04: I mean, that seems conventional to me. [01:03:24] Speaker 03: I think that there might be some cause to action under that circumstance, but I think my submission is simply that that is not a traditional consumer protection form of remedy. [01:03:35] Speaker 03: And that that is, again, an example of the fact. [01:03:38] Speaker 04: That would be a question about the scope of the state cause of action. [01:03:44] Speaker 04: It just doesn't feel to me like a question that's necessarily going to start entrenching on federal interests. [01:03:52] Speaker 03: And to be clear on all of these issues, we would certainly advance arguments that these remedies are not appropriate remedies under the CPPOA. [01:04:01] Speaker 03: But I also think that it illustrates that, again, the district is reluctant, I would submit, to seek what are the sort of conventional remedies in a consumer protection case. [01:04:13] Speaker 03: And at bottom, I think this case is really no different from the Minnesota case or the other cases where plaintiffs have sought relief in consumer protection cases, characterized as relief and misrepresentations. [01:04:27] Speaker 03: It sweeps much more broadly. [01:04:28] Speaker 03: And I can do no better than what Judge Strauss said in his opinion, incurring in the Eighth Circuit's decision, that while Minnesota, in that case, reports to bring state law consumer protection claims, its lawsuit takes aim at the production and sale of fossil fuels worldwide. [01:04:44] Speaker 03: And so while it does seem as if the district is to some extent backing away from the most ambitious characterization of what it sought, one might well wonder why the district didn't do that in its brief, [01:04:54] Speaker 03: I think that the district has not backed away from it far enough in order for federal common law not to apply. [01:05:00] Speaker 03: I think the one thing I would say on the merits with the court's leave is that on this issue of the characterization of the Second Circuit's decision in the city of New York, I would point the court in particular to the discussion at pages 98 to 99 where Judge Sullivan said, and I'm quoting, state law does not suddenly become presently competent to address issues that demand a unified federal standard [01:05:22] Speaker 03: simply because Congress saw fit to displace a federal court-made standard with a legislative one. [01:05:28] Speaker 03: Such an outcome is too strange to seriously contemplate. [01:05:32] Speaker 04: Says that in the context of his ultimate ruling, which is the Clean Air Act, just as federal common law [01:05:41] Speaker 04: sprang to life on its own and preempted before displaced completely preempted gave you a cause of action before the Clean Air Act. [01:05:51] Speaker 04: Now the Clean Air Act to be sure. [01:05:54] Speaker 04: But I think that that last conclusion doesn't get you where you need to be. [01:05:58] Speaker 03: But I think that that reasoning applies with equal force with regard to the jurisdictional analysis for the simple reason that [01:06:07] Speaker 03: It would be anomalous to say that in a context where federal common law applies precisely because of the operation of the constitutional scheme, the displacement by a federal statute would somehow give state law new life for purposes of the jurisdictional inquiry. [01:06:25] Speaker 04: I mean, we're going around in circles. [01:06:27] Speaker 04: Displacement means it doesn't. [01:06:30] Speaker 03: Displacement, in our view, means that there is no valid cause of action. [01:06:35] Speaker 03: And I would certainly recognize that this last aspect is the one aspect of this on which the Supreme Court has not spoken. [01:06:43] Speaker 03: But again, I think that it would be anomalous to treat a situation in which federal common law supplies a rule of action, a decision, differently from a situation in which a federal statute does that. [01:06:52] Speaker 03: And I would point, like I said, Wright Miller, in my excitement, who's really a heart relaxer, [01:06:56] Speaker 03: I looked at it. [01:06:58] Speaker 03: I apologize to Professors Wright and Miller for attributing that to them. [01:07:02] Speaker 03: But I think that the reasoning applies with equal force here. [01:07:06] Speaker 03: And I don't think that the Supreme Court's decisions can be read to recognize that there's no room for federal common law to supply the rule of decision for jurisdictional purposes. [01:07:19] Speaker 04: Thanks to both counsel for your very skillful and vigorous arguments. [01:07:24] Speaker 04: The case is submitted.