US Supreme Court to hear Chevron, Exxon appeal over Louisiana coastal damage

By Nate Raymond

June 16 (Reuters) - The U.S. Supreme Court agreed on Monday to hear a bid by Chevron, Exxon Mobil 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.

Paul Clement, a lawyer for Chevron, welcomed the court's decision to hear the dispute.

"Chevron is pleased that the Supreme Court has decided to grant review in these cases, and we look forward to presenting our arguments to the court," Clement said.

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 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.

Reporting by Nate Raymond in Boston; Editing by Will Dunham