SCOTUSblog by Amy Howe 1/7/2026
When the Supreme Court returns to the bench next week for the first argument of 2026, in Chevron USA Inc. v. Plaquemines Parish, Louisiana, it will confront a thorny dispute over the circumstances in which a federal contractor can transfer a case from state to federal court. The question comes to the justices in a high-profile case brought by Louisiana parishes – the equivalent of counties in that state – seeking to hold oil and gas companies liable for damage to the Louisiana coast. A federal appeals court in New Orleans rejected the companies’ latest attempt to move the case to federal court, but now the Supreme Court will weigh in. Litigants on both sides of the dispute tell the justices that the stakes are high, not only because of the amount of money in play, but also because of what the court’s ruling could mean for other companies that do business with the federal government.
More than a half-century ago, Congress passed a law that was intended to encourage states to regulate the land and waters on their coasts by promising federal funding for states whose coastal management programs were submitted to, and approved by, the Secretary of Commerce. In 1978, Louisiana adopted the State and Local Coastal Resources Management Act, which took effect in 1980, to opt into this federal program. The law, known as the SLCRMA, requires a permit to “use” the coastal zone, which is defined as “any use or activity within the coastal zone which has a direct and significant impact on coastal waters.” The law allows lawsuits against entities that violate or do not obtain a coastal use permit; it also contains a grandfather clause, which exempts “specific uses legally commenced or established prior to the effective date of the coastal use permit program.”
In 2013, a group of Louisiana coastal parishes, along with state officials, filed 42 lawsuits under SLCRMA against oil and gas companies whose predecessors had produced crude oil along the Louisiana coast during World War II. The parishes contended that the companies violated the law by either failing to obtain proper permits or violating the terms of any permits that they did obtain. Moreover, they contended, the companies’ pre-1980 activities were not covered by the grandfather clause because they did not follow prudent industry practices. The parishes sought to have the companies pay damages, including to have the areas where the oil companies were operating restored to their original condition.
Earlier efforts to rely on other legal theories to transfer the cases to federal court were unsuccessful. The efforts in the case now before the Supreme Court centers on a federal law known as the “federal officer removal statute.” The law gives federal courts the power to hear state court cases filed against “any officer (or any person acting under that officer) of the United States or of an agency thereof, in an official or individual capacity, for or relating to any act under color of such office.”
The companies argued that the case belonged in federal court under the federal officer removal statute because two of Chevron’s predecessors were federal contractors: They had contracts with the federal government during World War II to produce aviation gasoline, known as “avgas,” which (among other things) required them to refine crude oil.
The U.S. Court of Appeals for the 5th Circuit agreed with the companies that they were “acting under” a federal officer for purposes of the federal officer removal statute. But the divided three-judge panel concluded that the companies could not meet the law’s final prong, requiring that the case be filed “for or relating to any act under color of such office.” The parishes’ lawsuits, the panel majority wrote, “target Defendants’ oil production and exploration practices.” But there is nothing in the companies’ refinery contracts about oil production, and the federal government’s wartime regulation of crude oil production was “minimal,” the majority concluded.
More:
https://www.scotusblog.com/2026/01/court-to-hear-argument-in-case-seeking-to-hold-companies-liable-for-damaging-louisiana-coast/
