In Win for Chevron, Supreme Court Moves Louisiana Lawsuit to Federal Level

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Written by Paul Wiseman for IIR News Intelligence (Sugar Land, Texas)

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Summary

The decision vacates a Louisiana court order for Chevron to pay $744 million in environmental damages for violating a state law and allows Chevron to move the lawsuit to the federal court level.

Supreme Court Decides Feds Have Jurisdiction

The Supreme Court of the United States ruled 8-0 on Friday in favor of Chevron USA Incorporated, allowing the energy company to move an environmental lawsuit from state court to the federal level. This overturned a previous appeals court decision and gave Chevron new life after a state court's 2025 decision ordering them to pay $744 million, stating that the oil company had violated a 1978 Louisiana environmental law. According to Industrial Info Resources data, Chevron has four active projects in Louisiana, worth $2.21 billion, and five operational plants there.

Nature of the Case

It started in 2013 when Plaquemines Parish, bordering the Gulf Coast and host to many oil industry projects and facilities, joined other Louisiana parishes in filing 42 state-court suits against oil and gas companies under the state's 1978 State and Local Coastal Resources Management Act. The lawsuit maintains Chevron violated a Louisiana environmental law by damaging area wetlands.

The state law limited use of the state's coastal zone, targeting oil production, without proper permitting by the state. The first of the lawsuits finally went to court in 2025. It alleged that decades of oil and gas activities along the Gulf Coast have injured the area's wetlands and made Louisiana more susceptible to damage and erosion from hurricanes and other weather events.

Although the 1978 law exempted any uses that legally started prior to 1980, the plaintiffs extended their claims back to World War II-era activities, saying that because oil companies failed to follow prudent industry standards, the 1980 line was inapplicable.

Stating the Case to Federal Court

After the 2025 state-level ruling, Chevron's next action was to use the federal removal statute to transfer the case to federal court. That law, first passed in 1948, allows legal action that began in a state court to be moved to a federal court when the lawsuit regards actions "for or relating to" actions taken under a federal order.

Chevron contended that two of its predecessor companies acted under World War II-era federal contracts that required them to refine crude oil to help the war effort. This argument was rejected by the Fifth Circuit Court of Appeals. The appeals court ruled that the predecessors' federal contract did not require them to produce oil.

The U.S. Supreme Court opted 8-0 to reverse the appeals court decision, with Justice Samuel Alito abstaining due to a stock ownership connection with ConocoPhillips, one of the members of the legal action. Its opinion, penned by Justice Clarence Thomas, said because Chevron's activities are connected to its federal responsibilities, the case could indeed be removed to federal court.

Thomas wrote that actions in the 1940s, such as dredging canals, were "closely connected" to the companies' contractual duties to produce aviation fuel for the military.

What This Means

Attorney John Carmouche, who represents the parishes, said the Supreme Court action affects 11 of the 42 lawsuits. He told the Associated Press that "simply changing where the case will be heard, as has happened, will not deter our efforts to have Big Oil held accountable for the damages they caused and the enormous restoration they owe the people of Louisiana."

Chevron said it was pleased by the Supreme Court action.

"As the court recognized, the plaintiffs' claims are related to activities that Chevron and other energy companies performed under federal supervision during World War II," said company spokesperson Bill Turenne. "Those claims are flawed as a matter of both state law and federal law, and Chevron looks forward to litigating these cases in federal court, where they belong."

The Trump administration's "drill baby, drill" doctrine was well served in the decision, having sided with Chevron, arguing that the federal statute keeps state courts from intervening in federal operations.

By the Numbers

• 8-0: The U.S. Supreme Court ruled unanimously to remove a lawsuit against Chevron from state court to the federal level
• $744 million: The amount a Louisiana jury had ordered Chevron to pay in a 2025 ruling, now effectively overturned

Key Takeaways

• Louisiana parishes' lawsuit to get Chevron and other oil companies to help pay for coastal damage under a 1978 Louisiana law has been removed to federal courts.
• Oil companies believe they will get a better result in courts away from the state that would benefit from the decision.
• Both parties have vowed to fight on.

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