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Federal court friendlier venue for companies in such cases

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Appeal involved suits by Plaquemines and Cameron parishes

By Nate Raymond

June 16 (Reuters) - The U.S. Supreme Court agreed on

Monday to hear a bid by Chevron ( CVX ), Exxon Mobil ( XOM ) and

other oil and gas companies to have lawsuits brought by two

Louisiana localities accusing them of harming the state's coast

over a period of decades moved out of state court and into

federal court.

The justices took up an appeal by the companies of a lower

court's ruling rejecting their claims that the lawsuits belong

in federal court because the parishes of Plaquemines and Cameron

were suing over oil production activities undertaken to fulfill

U.S. government refinery contracts during World War Two. Federal

court is considered a friendlier venue for businesses in such

litigation.

The justices are due to hear the case in their next term,

which begins in October.

Beginning in 2013, six Louisiana parishes along the coast

filed 42 lawsuits accusing the oil and gas companies of

violating Louisiana's State and Local Coastal Resources

Management Act of 1978, a state permitting law.

In the first of those to go to trial, a jury in April found

that Chevron ( CVX ) must pay Plaquemines Parish $744.6 million.

The appeal by the companies to the U.S. Supreme Court

concerned the suit by Plaquemines and one by Cameron parish,

both of which raised jurisdictional issues common to a subset of

the 42 cases.

The various parishes accused the companies of damaging

coastal marshlands through dredging and pipeline development and

have sought billions of dollars in damages to fund land

restoration and storm protection efforts to mitigate erosion.

The companies have long argued those cases have no business

being in state court, a venue considered more favorable to

plaintiffs. They pointed to the April verdict to underscore the

stakes in the litigation in asking the Supreme Court to take up

their appeal. The justices in 2023 declined to hear an appeal of

an earlier ruling sending the cases back to state court on

different grounds.

The latest appeal was based on a U.S. law that authorizes

federal officers and contractors acting under them who are

facing litigation in state court involving their official duties

to move the matter to federal court, with the goal of avoiding

local interests prejudicing the proceedings.

The companies said the cases belonged in federal court

because the companies had federal contracts to supply the U.S.

government with refined petroleum products during World War Two

and produced oil to fulfill the contracts.

But the New Orleans-based 5th U.S. Circuit Court of Appeals

upheld decisions by lower courts remanding the cases back to

state court, saying the exploration and production activities at

issue were unrelated to the companies' contracted refining

operations.