The US Supreme Court on June 16, 2025 granted certiorari for an appeal from a divided opinion by the US Court of Appeals for the Fifth Circuit relating to the federal officer removal statute. The appeal comes after a jury awarded Plaquemines Parish a historic $744.6 million verdict in the first of 41 coastal erosion cases brought by Louisiana parishes against oil and gas companies.
The oil and gas companies argue that the case, which had been proceeding in Louisiana state court, should be removed to federal court because the oil exploration activities that give rise to the claims took place while fulfilling comprehensive federal refining contracts during World War II and therefore are subject to the federal officer removal statute. The Fifth Circuit and the trial court both found that removal was improper because the claims are unrelated to contract activities.
Federal officer removal statute 28 USC § 1442 allows “any person acting under” an officer of the United States to remove state court litigation to the appropriate United States district court. The statute requires at least some nexus between the litigation and government direction, allowing removal only “for or relating to any act under color of such office.”[1] The statute was amended in 2011 from language allowing removal “for any act under color of such federal office” to language allowing removal “for or relating to any act under color of such federal office,” unquestionably expanding the scope of federal officer removal rights. But exactly how far did the 2011 amendment expand the removal rights of a government contractor?
The Supreme Court will settle a circuit split and the divided 2-1 opinion of the Fifth Circuit regarding the extent to which the acts giving rise to the litigation must relate to any act under color of a federal officer. The Second and Eleventh Circuits, for example, have utilized a causal nexus test. The Fifth Circuit had previously required a “connection” or “association” between acts giving rise to litigation and government direction. It is unclear whether any judicially created tests interpreting federal officer removal survive the broadened scope of the 2011 amendments.
Factually, the Fifth Circuit found that the oil and gas companies operated under color of the federal government due to the presence of wartime refining contracts. However, the Fifth Circuit also found that those contracts did not sufficiently “relate to” the claims alleged here and therefore found removal was improper. The Fifth Circuit made a distinction between oil exploration activities and wartime refining under the contracts.
Accordingly, the appeal presents two related issues. First, the appeal raises whether prior tests evaluating the nexus required between the issues presented in the litigation and federal control under prior statutory language survive the 2011 amendment. Second, the appeal raises an evaluation of whether oil production activities taken under historically unprecedented wartime refining contracts with the federal government are sufficiently “related” to allow for removal under the amended statute.
The United States won World War II by mobilizing industry with extraordinary success. As to the oil and gas industry specifically, the United States, through wartime agencies like the Petroleum Administration for War, coordinated operations on a national, regional, and local scale. The United States maximized short-term refining of critical wartime products from fuel oil to high-octane aviation gasoline. The United States systematically coordinated the country’s oil exploration and production to make oil and high-octane feedstock supply meet refining capacity on a national scale.
In many instances, these arrangements were memorialized with government contracts. Given the historical significance of these wartime manufacturing contracts and the context in which they were put in place, robust records have been maintained in historical archives throughout the country. To the extent this case goes beyond the specific terms of the contracts at issue, a clear (and fascinating) factual record exists from which the Supreme Court can decide these issues.
Prior efforts to remove similar cases in 2023 failed because removal was based on a more general wartime government control over the refining industry through informal directives and orders. The Fifth Circuit, however, recognized that oil and gas companies operating pursuant to federal contracts were differently positioned and were acting under the direction of federal officers in carrying out those contracts. The appeal before the Supreme Court now turns on whether there is a sufficient nexus between the oil production activities complained of and World War II refining contracts—and what the test should be for evaluating that nexus.
The US Congress designed the federal officer removal statute specifically to protect companies working under the direction of the government from potentially hostile state court venues. The environmental issues presented here are sensitive and potentially inflammatory to a local jury. The $744.6 million Louisiana jury award to a nearby parish may be exactly the type of runaway local court the statute set out to protect against. Given that the massive jury award comes with dozens of similar cases waiting to also proceed in state court, billions of dollars are at stake.
Nuances of the federal officer removal statute have long split the circuits. Here, the Fifth Circuit split 2–1, with a powerful dissent. The Fifth Circuit also denied rehearing en banc by a vote of 7–6. More than a decade into litigation, Chevron U.S.A. Inc. v. Plaquemines Parish presents an important, close issue with wide-reaching impacts for both the State of Louisiana and industry parties.
The Supreme Court will hear the appeal in the next term.
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[1] 28 USC § 1442(a)(1).