City and County of Honolulu v. Sunoco LP. Concurring Opinion by Eddins, J. [ada].

537 P.3d 1173, 153 Haw. 326

• Court: Hawaii Supreme Court
• Decided: October 31, 2023
• Docket: SCAP-22-0000429
• Status: Published

Opinion

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Electronically Filed Supreme Court SCAP-XX-XXXXXXX 31-OCT-2023 08:57 AM Dkt. 74 OP

IN THE SUPREME COURT OF THE STATE OF HAWAI‘I

---o0o---

CITY AND COUNTY OF HONOLULU and HONOLULU BOARD OF WATER SUPPLY, Plaintiffs-Appellees,

vs.

SUNOCO LP; ALOHA PETROLEUM, LTD.; ALOHA PETROLEUM LLC; EXXON MOBIL CORPORATION; EXXONMOBIL OIL CORPORATION; ROYAL DUTCH SHELL PLC; SHELL OIL COMPANY; SHELL OIL PRODUCTS COMPANY LLC; CHEVRON CORPORATION; CHEVRON U.S.A. INC.; BHP HAWAII INC.; BP PLC; BP AMERICA INC.; MARATHON PETROLEUM CORPORATION; CONOCOPHILLIPS; CONOCOPHILLIPS COMPANY; PHILLIPS 66; and PHILLIPS 66 COMPANY, Defendants-Appellants,

and

BHP GROUP LIMITED and BHP GROUP PLC, Defendants-Appellees.

SCAP-XX-XXXXXXX

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CAAP-XX-XXXXXXX; CASE NO. 1CCV-XX-XXXXXXX)

October 31, 2023

RECKTENWALD, C.J., McKENNA, AND EDDINS, JJ., CIRCUIT JUDGE JOHNSON AND CIRCUIT JUDGE TONAKI, ASSIGNED BY REASON OF VACANCIES, AND EDDINS, J., CONCURRING *** FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER ***

OPINION OF THE COURT BY RECKTENWALD, C.J.

I. INTRODUCTION

The City and County of Honolulu and the Honolulu Board

of Water Supply (collectively, Plaintiffs) brought suit against

a number of oil and gas producers 1 (collectively, Defendants)

alleging five counts: public nuisance, private nuisance, strict

liability failure to warn, negligent failure to warn, and

trespass. Defendants appeal the circuit court’s denial of their

motions to dismiss for both lack of jurisdiction and failure to

state a claim. We conclude that the circuit court properly

denied both motions, and accordingly, this lawsuit can proceed.

Plaintiffs argue this is a traditional tort case

alleging that Defendants engaged in a deceptive promotion

campaign and misled the public about the dangers of using their

oil and gas products. Plaintiffs claim their theory of

liability is simple: Defendants knew of the dangers of using

their fossil fuel products, “knowingly concealed and

misrepresented the climate impacts of their fossil fuel

products,” and engaged in “sophisticated disinformation

campaigns to cast doubt on the science, causes, and effects of

1 Defendants are: Sunoco LP, Aloha Petroleum, Ltd., Aloha Petroleum LLC, Exxon Mobil Corporation, ExxonMobil Oil Corporation, Shell plc (f/k/a Royal Dutch Shell plc), Shell U.S.A. Inc. (f/k/a Shell Oil Company), Shell Oil Products Company LLC, Chevron Corporation, Chevron U.S.A. Inc., Woodside Energy Hawaii Inc. (f/k/a BHP Hawaii Inc.), BP plc, BP America Inc., Marathon Petroleum Corporation, ConocoPhillips, ConocoPhillips Company, Phillips 66, and Phillips 66 Company. The circuit court dismissed BHP Group Limited and BHP Group plc – that dismissal was not appealed and is not before this court.

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global warming,” causing increased fossil fuel consumption and

greenhouse gas emissions, which then caused property and

infrastructure damage in Honolulu. Simply put, Plaintiffs say

the issue is whether Defendants misled the public about fossil

fuels’ dangers and environmental impact.

Defendants disagree. They say this is another in a

long line of lawsuits seeking to regulate interstate and

international greenhouse gas emissions, all of which have been

rejected. Greenhouse gas emissions and global warming are

caused by “billions of daily choices, over more than a century,

by governments, companies, and individuals,” and Plaintiffs

“seek to recover from a handful of Defendants for the cumulative

effect of worldwide emissions leading to global climate change

and Plaintiffs’ alleged injuries.” They argue: (1) the circuit

court lacked specific jurisdiction over the Defendants; (2)

Plaintiffs’ claims are preempted by federal common law, which in

turn, was displaced by the Clean Air Act (CAA); and (3)

alternatively, Plaintiffs’ claims are preempted by the CAA.

We agree with Plaintiffs. This suit does not seek to

regulate emissions and does not seek damages for interstate

emissions. Rather, Plaintiffs’ complaint “clearly seeks to

challenge the promotion and sale of fossil-fuel products without

warning and abetted by a sophisticated disinformation campaign.”

Mayor & City Council of Baltimore v. BP P.L.C., 31 F.4th 178,

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233 (4th Cir. 2022), cert. denied, 143 S. Ct. 1795 (2023)

(characterizing a complaint brought against many of the same

Defendants in this case alleging broadly the same counts, theory

of liability, and injuries). This case concerns torts committed

in Hawaiʻi that caused alleged injuries in Hawaiʻi.

Thus, Defendants’ arguments on appeal fail. First,

Defendants are subject to specific jurisdiction in Hawaiʻi

because: (1) Plaintiffs’ allegations that Defendants misled

consumers about fossil fuels products’ dangers “arise out of”

and “relate to” Defendants’ contacts with Hawaiʻi, i.e.,

Defendants’ sale and marketing of those fossil fuel products in

Hawaiʻi, Ford Motor Co. v. Montana Eighth Judicial District

Court, 141 S. Ct. 1017, 1025 (2021); (2) it is reasonable for

Hawaiʻi courts to exercise specific jurisdiction over Defendants,

and doing so does not conflict with interstate federalism

principles because Hawaiʻi has a “significant interest[] . . .

[in] ‘providing [its] residents with a convenient forum for

redressing injuries inflicted by out-of-state actors,’” see id.

at 1030 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,

473 (1985)); and (3) the Supreme Court has never imposed a

“clear notice” requirement, see id. at 1025.

Second, the CAA displaced federal common law governing

interstate pollution damages suits; after displacement, federal

common law does not preempt state law. See Am. Elec. Power Co.

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v. Connecticut, 564 U.S. 410, 423-24 (2011) (“AEP”); Bd. of

Cnty. Comm’rs of Boulder Cnty. v. Suncor Energy (U.S.A.) Inc.,

25 F.4th 1238, 1260 (10th Cir. 2022), cert. denied, 143 S. Ct.

1795 (2023) (“[T]he federal common law of nuisance that formerly

governed transboundary pollution suits no longer exists due to

Congress’s displacement of that law through the CAA.”). We must

only consider whether the CAA preempts state law. AEP, 564 U.S.

at 429 (“[T]he availability vel non of a state lawsuit depends

inter alia on the preemptive effect of the [CAA].”).

Third, the CAA does not preempt Plaintiffs’ claims.

The CAA does not occupy the entire field of emissions

regulation. See Merrick v. Diageo Ams. Supply, Inc., 805 F.3d

685, 695 (6th Cir. 2015) (determining that there is “no evidence

that Congress intended that all emissions regulation occur

through the [CAA’s] framework”). There is no “actual conflict”

between Plaintiffs’ state tort law claims and the CAA’s

overriding federal purpose or objective. See In re Methyl

Tertiary Butyl Ether (MTBE) Prod. Liab. Litig. (MTBE), 725 F.3d

65, 101 (2d Cir. 2013) (concluding that CAA did not preempt

state tort law claims relating to a gasoline additive where it

was possible to comply with both state and federal law).

Therefore, we affirm the circuit court’s orders

denying Defendants’ motion to dismiss for lack of jurisdiction

and motion to dismiss for failure to state a claim.

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II. BACKGROUND

A. Circuit Court Proceedings

1. Original complaint, removal, and remand

In March 2020, Plaintiffs filed their original

complaint in the Circuit Court for the First Circuit alleging

that for decades, Defendants knew their fossil fuel products

caused greenhouse gas emissions and global warming, but they

failed to warn consumers of the threat, and actively worked to

discredit scientific evidence that supported the existence of

global warming. In April 2020, Defendants removed the case to

federal court. Defendants argued that removal jurisdiction was

appropriate because federal common law governed, and the CAA and

other federal statutes preempted Plaintiffs’ claims. 2

On Plaintiffs’ motion, the federal district court

remanded the case to state circuit court. The federal court

explained that the Ninth Circuit, in City of Oakland v. BP PLC,

969 F.3d 895, 906-08 (9th Cir. 2020), recently rejected

2 Defendants asserted eight grounds for federal jurisdiction: (1) the Outer Continental Shelf Lands Act (OCSLA) because “[a] significant portion of oil and gas exploration and production” occurs on the shelf; (2) the federal officer removal statute, see 28 U.S.C. § 1442(a)(1), because oil and gas production “took place under the direction of a federal officer to support critical national security, military, and other core federal government operations;” (3) federal enclave jurisdiction because some oil production occurred on federal enclaves like the Outer Continental Shelf; (4) federal common law, which defendants argue governs Plaintiffs’ claims; (5) federal question jurisdiction because Plaintiffs’ claims “necessarily raise[] federal questions under the [CAA], EPA and other federal regulations and international treaties on climate change to which the United States is a party;” (6) federal preemption by the CAA and other related statutes; (7) bankruptcy jurisdiction; and (8) admiralty jurisdiction.

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Defendants’ federal-common-law, federal-preemption, and federal-

question-jurisdiction arguments. City & Cnty. of Honolulu v.

Sunoco LP, No. 20-CV-00163-DKW-RT, 2021 WL 531237, at *2 n.8 (D.

Haw. Feb. 12, 2021). The court explained that the “principal

problem with Defendants’ arguments is that they misconstrue

Plaintiffs’ claims.” Id. at *1. “More specifically, contrary

to Defendants’ contentions, Plaintiffs have chosen to pursue

claims that target Defendants’ alleged concealment of the

dangers of fossil fuels, rather than the acts of extracting,

processing, and delivering those fuels.” Id. Further,

Plaintiffs’ nuisance claims arise “not through [Defendants’]

‘fossil fuel production activities,’ . . . but through their

alleged failure to warn about the hazards of using their fossil

fuel products and disseminating misleading information about the

same.” Id. at *3.

On appeal, the Ninth Circuit affirmed the district

court’s order remanding the case to state circuit court. City &

Cnty. of Honolulu v. Sunoco LP, 39 F.4th 1101, 1113 (9th Cir.

2022). Defendants filed an application for writ of certiorari

to the U.S. Supreme Court, which was denied. Sunoco LP v. City

& Cnty. of Honolulu, 143 S. Ct. 1795 (2023) (denying application

for certiorari).

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2. First Amended Complaint

In its First Amended Complaint (Complaint), Plaintiffs

added the Board of Water Supply (BWS) as a plaintiff and amended

certain allegations to incorporate damages specific to BWS.

Plaintiffs also added an allegation that the wrongful conduct

giving rise to the second cause of action (private nuisance) was

committed with actual malice, permitting punitive damages.

First, Plaintiffs allege that human activity is

causing the atmosphere and oceans to warm, sea levels to rise,

snow cover to diminish, oceans to acidify, and hydrologic

systems to change. Greenhouse gas emissions, which are largely

a byproduct of combustion of fossil fuels, are the chief cause

of this warming. The accumulation of greenhouse gases in the

atmosphere has adverse impacts on the earth, including: warming

of the average surface temperature, resulting in increasingly

frequent heatwaves; sea level rise; flooding of land and

infrastructure; changes to the global climate, including longer

periods of drought; ocean acidification; increased frequency of

extreme weather; changes to ecosystems; and impacts on human

health associated with extreme weather, decreased air quality,

and vector-borne illnesses.

Next, Plaintiffs allege that Defendants knew about the

dangers associated with their products because they, or their

predecessors in interest, were members of the American Petroleum

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Institute (API). Beginning in the 1950s, scientists warned the

API that fossil fuels were causing atmospheric carbon dioxide

levels to increase. In 1965, President Lyndon B. Johnson’s

Scientific Advisory Committee warned of global warming and the

catastrophic impacts that could result. The API President

related these findings to industry leaders at the association’s

annual meeting that year. Plaintiffs allege that by 1965,

industry leaders were aware of the global warming phenomenon

caused by their products. Defendants continued to gather

information on the climate change impacts of their products

throughout the 1960s, 1970s, and 1980s.

During the 1980s, many of the defendants in the

present case formed their own research units focused on climate

modeling. API provided a forum where Defendants shared research

efforts and corroborated each other’s findings. Plaintiffs

allege that by 1988, Defendants “had amassed a compelling body

of knowledge about the role of anthropogenic greenhouse gases,

and specifically those emitted from the normal use of

Defendants’ fossil fuel products, in causing global warming and

its cascading impacts[.]”

Plaintiffs allege that around 1990, public discussion

shifted from gathering information on climate change to

international efforts to curb emissions. At this point,

Defendants – rather than collaborating with the international

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community to help curb emissions - “embarked on a decades-long

campaign designed to maximize continued dependence on their

products and undermine national and international efforts to

rein in greenhouse gas emissions.” Defendants began a public

relations campaign to cast doubt on the science connecting

global climate change to their products. Defendants promoted

their products through misleading advertisements and funding

“climate change denialist organizations.”

According to Plaintiffs, Defendants’ efforts to cast

doubt on climate science continued throughout the 1990s and

2000s. Defendants “bankroll[ed]” scientists with “fringe

opinions” in order to create a false sense of disagreement in

the scientific community. Defendants’ own scientists, experts,

and managers had previously acknowledged climate change’s

effects. At the same time, Defendants worked to change public

opinion over climate change’s existence and avoid regulation.

Defendants funded dozens of think tanks, front groups, and dark

money foundations pushing climate change denial, with ExxonMobil

alone spending almost $31 million.

Plaintiffs allege that, while Defendants publicly cast

doubt on climate change, they simultaneously invested in

operational changes to prepare for its adverse consequences.

For example, Defendants allegedly raised offshore oil platforms

to protect against rising sea levels, reinforced them against

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storms, and developed new technologies for extracting oil in

places previously blocked by polar sea ice.

Defendants now claim they are investing in renewable

energy, but Plaintiffs claim these statements are a pretense.

Defendants’ advertisements and promotional materials do not

disclose the risks of their products, and they continue to ramp

up fossil fuel production, including new fossil fuel

development.

Plaintiffs allege that they have sustained damages

caused by Defendants’ failure to warn and deceptive promotion of

dangerous products. Defendants’ conduct “is a substantial

factor in causing global warming,” which has had adverse effects

on Plaintiffs. These effects include sea level rise (causing

flooding, erosion, and beach loss); more extreme weather events;

ocean warming (causing destruction of coral reefs); loss of

endemic species; and diminished availability of fresh water.

Because of Defendants’ conduct, Plaintiffs suffered damage to

their facilities and property, incurred increased planning and

preparation costs to adapt communities to global warming’s

effects, collected less tax revenue due to impacts on tourism,

and suffered the cost of public health impacts such as an

increase in heat-related illnesses. Plaintiffs have already

suffered damage to beach parks, roads, and drain way

infrastructure from flooding and sea level rise.

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Plaintiffs bring five counts under state law: public

nuisance, private nuisance, strict-liability failure to warn,

negligent failure to warn, and trespass. All counts rely on the

same theory of liability: Defendants knew about the dangers of

using their fossil fuel products, failed to warn consumers about

those known dangers, and engaged in a sophisticated

disinformation campaign to increase fossil fuel consumption, all

of which exacerbated the impacts of climate change in Honolulu.

3. Defendants’ joint motions to dismiss

Defendants filed two motions to dismiss, the first for

lack of jurisdiction and the second for failure to state a

claim. In their first motion to dismiss, Defendants argued the

circuit court did not have specific jurisdiction because

“(1) the Complaint avers, as it must, that Plaintiffs’ alleged injuries arise out of and relate to worldwide conduct by countless actors, not Defendants’ alleged contacts with Hawai‘i; (2) Defendants did not have ‘clear notice’ that as a result of their activities in Hawai‘i they could be sued here for activity occurring around the world; and (3) exercising jurisdiction would be constitutionally unreasonable.”

In their second motion to dismiss, Defendants argued:

(1) Plaintiffs’ claims are interstate pollution claims, which

must be brought under federal common law, not state common law,

and that the CAA preempts interstate pollution federal common

law claims; or alternatively, (2) Plaintiffs’ state common law

claims are preempted by the CAA. Plaintiffs opposed.

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At the motion hearing, Plaintiffs summarized their

theory of liability, which is central to the jurisdictional and

preemption issues on appeal. Plaintiffs explained that

defendants “concealed and misrepresented the climate impacts of

their products, using sophisticated disinformation campaigns to

discredit the science of global warming.” Defendants also

allegedly misled “consumers and the rest of the world about the

dangers of using their products as intended in a profligate

manner.” Thus, “these deceptive commercial activities . . .

inflated the overall consumption of fossil fuels, which

increased greenhouse gas emissions, which exacerbated climate

change, which created the hazardous environmental conditions”

that have allegedly injured Plaintiffs.

4. The circuit denied Defendants’ motions to dismiss

The circuit court subsequently denied both motions. 3

The circuit court denied Defendants’ motion to dismiss

for lack of jurisdiction, concluding that it had specific

jurisdiction because Plaintiffs’ claims arose out of and related

to Defendants’ sales and marketing contacts in Hawaiʻi. See,

e.g., Ford Motor, 141 S. Ct. at 1025. The circuit court also

determined it would be reasonable to exercise specific

3 The Honorable Jeffrey P. Crabtree presided.

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jurisdiction over Defendants. See Hawaii Forest & Trial Ltd. v.

Davey, 556 F. Supp. 2d 1162, 1168-72 (D. Haw. 2008).

The circuit court also denied Defendants’ joint motion

to dismiss for failure to state a claim. The court explained

that the standard for the review of a motion to dismiss “is

generally limited to the allegations in the complaint, which

must be deemed true for purposes of the motion,” Kahala Royal

Corp. v. Goodsill Anderson Quinn & Stifel, 113 Hawai‘i 251, 266,

151 P.3d 732, 747 (2007), but courts are “not required to accept

conclusory allegations,” Civ. Beat L. Ctr. for the Pub. Int.,

Inc. v. City & Cnty. of Honolulu, 144 Hawai‘i 466, 474, 445 P.3d

47, 55 (2019). And “the issue is not solely whether the

allegations as currently pled are adequate.” Rather, “[a]

complaint should not be dismissed for failure to state a claim

unless it appears beyond doubt that the plaintiff can prove no

set of facts in support of his or her claim that would entitle

him or her to relief under any set of facts or any alternative

theory.” (Citations omitted).

The circuit court first concluded that City of New

York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021), cited by

Defendants, “has limited application to this case, because the

claims in the instant case are both different from and were not

squarely addressed in [that] opinion.” The circuit court then

determined that federal common law did not govern Plaintiffs’

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state law claims. The circuit court also determined that

Plaintiffs’ claims were not preempted by the CAA.

The circuit court also rejected Defendants’ argument

that a large damages award in this case could act as a de facto

emissions regulation because an unfavorable judgment would “not

prevent Defendants from producing and selling as much fossil

fuels as they are able, as long as Defendants make the

disclosures allegedly required, and do not engage in

misinformation.” The circuit court concluded:

A broad doctrine that damages awards in tort cases impermissibly regulate conduct and are thereby preempted would intrude on the historic powers of state courts. Such a broad “damages = regulation = preemption” doctrine could preempt many cases common in state court, including much class action litigation, products liability litigation, claims against pharmaceutical companies, and consumer protection litigation.

Last, the circuit court concluded that it was

appropriate for state common law to govern Plaintiffs’ claims:

Defendants argue (and the City of New York opinion expresses) that climate change cases are based on “artful pleading.” Respectfully, we often see “artful pleading” in the trial courts, where new conduct and new harms often arise:

The argument that recognizing the tort will result in a vast amount of litigation has accompanied virtually every innovation in the law. Assuming that it is true, that fact is unpersuasive unless the litigation largely will be spurious and harassing. Undoubtedly, when a court recognizes a new cause of action, there will be many cases based on it. Many will be soundly based and the plaintiffs in those cases will have their rights vindicated. In other cases, plaintiffs will abuse the law for some unworthy end, but the possibility of abuse cannot obscure the need to provide an appropriate remedy.

Fergerstrom v. Hawaiian Ocean View Estates, 50 Haw. 374, 377 (1968) (opinion by Levinson, J.)[.] Here, the causes

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of action may seem new, but in fact are common. They just seem new due to the unprecedented allegations involving causes and effects of fossil fuels and climate change. Common law historically tries to adapt to such new circumstances.

The circuit court then granted Defendants leave to

file an interlocutory appeal.

B. Appellate Proceedings

Defendants timely filed their joint notice of

interlocutory appeal from the circuit court’s Order Denying

Defendants’ Joint Motion to Dismiss for Failure to State a Claim

and its Order Denying Defendants’ Joint Motion to Dismiss for

Lack of Personal Jurisdiction. This court subsequently granted

Plaintiffs’ application for transfer from the Intermediate Court

of Appeals.

On appeal, Defendants frame this case as one where

Plaintiffs “seek[] to hold Defendants liable under Hawai‘i tort

law for harms allegedly attributable to global climate change.”

This case should be dismissed because “these emissions flow from

billions of daily choices, over more than a century, by

governments, companies, and individuals about what types of

fuels to use, and how to use them.” Plaintiffs “seek to recover

from a handful of Defendants for the cumulative effect of

worldwide emissions leading to global climate change and

Plaintiffs’ alleged injuries.”

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Plaintiffs dispute Defendants’ characterization of the

Complaint. Plaintiffs argue that the Complaint does “not ask

for damages for all effects of climate change; rather, [it]

seek[s] damages only for the effects of climate change allegedly

caused by Defendants’ breach of Hawai‘i law regarding failure to

disclose, failures to warn, and deceptive promotion.”

Plaintiffs contend their Complaint is “straightforward”:

“Defendants knowingly concealed and misrepresented the climate

impacts of their fossil fuel products” and that “deception

inflated global consumption of fossil fuels, which increased

greenhouse gas emissions, exacerbated climate change, and

created hazardous conditions in Hawai‘i.” Despite Defendants’

contention that this suit seeks to regulate fossil fuel

production, “so long as Defendants start warning of their

products’ climate impacts and stop spreading climate

disinformation, they can sell as much fossil fuel as they wish

without fear of incurring further liability.”

Defendants raise three points of error: (1) the

circuit court lacked specific jurisdiction over the Defendants;

(2) Plaintiffs’ claims are preempted by federal common law,

which in turn, was displaced by the CAA; and (3) alternatively,

Plaintiffs’ claims are preempted by the CAA.

First, Defendants argue that specific jurisdiction

does not attach because: (1) Plaintiffs cannot show that their

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claims “arise out of or relate to,” Ford Motor, 141 S. Ct. at

1025, Defendants’ contacts with Hawai‘i because Plaintiffs’

alleged injuries did not “occur in-state as a result of the use

of the product in-state;” (2) Defendants’ in-state conduct “did

not reasonably place them on clear notice” they would be subject

to specific jurisdiction in Hawai‘i as required by the federal

Due Process Clause; and (3) the exercise of “personal

jurisdiction here would conflict with federalism principles”

limiting state jurisdiction in areas of national interest.

Plaintiffs dispute Defendants’ arguments, contending:

(1) the U.S. Supreme Court explained in Ford Motor that it had

“never framed the specific jurisdiction inquiry as always

requiring proof of causation — i.e., proof that the plaintiff’s

claim came about because of the defendant’s in-state conduct,”

id. at 1026; (2) Defendants had fair warning they could be haled

into Hawaiʻi courts, and Ford Motor did not create a “clear

notice” requirement, id. at 1027; and (3) Plaintiffs’ suit does

not interfere with national energy policy because Defendants can

continue to produce as much oil as they want as long as they

stop their tortious marketing conduct.

Second, Defendants argue that Plaintiffs’ state law

claims are governed by federal common law “because they seek

redress for harms allegedly caused by interstate and

international emissions.” Relying on City of New York,

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Defendants say that federal common law preempts Plaintiffs’

state common law tort claims, and in turn, the CAA preempts the

federal common law. See City of New York, 993 F.3d at 93-96.

Defendants contend that “[o]nce this court correctly concludes

that Plaintiffs’ claims are necessarily governed by federal law,

it follows that Plaintiffs also have no remedy under federal

law.”

Plaintiffs counter that the CAA displaced federal

common law governing interstate pollution, and that law “no

longer exists.” Boulder, 25 F.4th at 1260; see also AEP, 564

U.S. at 423. Plaintiffs claim that “once federal common law

disappears, the question of state law preemption is answered

solely by reference to federal statutes, not the ghost of some

judge-made federal law.” See AEP, 564 U.S. at 429 (“[T]he

availability . . . of a state lawsuit depends . . . on the

preemptive effect of the [CAA].”). According to Plaintiffs, the

proper preemption analysis requires examining only whether the

CAA preempts their state law claims. The court need not

consider first whether displaced federal common law preempts

Plaintiffs’ state claims, and second whether displaced federal

common law is preempted by the CAA.

Third and finally, Defendants alternatively argue that

the CAA preempts Plaintiffs’ claims. Defendants say Plaintiffs

seek damages for injuries allegedly caused by out-of-state

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sources’ emissions. Relying on N. Carolina ex rel. Cooper v.

Tenn. Valley Auth., 615 F.3d 291, 303, 306 (4th Cir. 2010),

Defendants contend that the “CAA preempts state-law claims

concerning out-of-state emissions.” Plaintiffs counter that the

“CAA does not concern itself in any way with the acts that

trigger liability under [its] Complaint, namely: the use of

deception to promote the consumption of fossil fuel products.”

They say the CAA regulates “pollution-generating emissions from

both stationary sources, such as factories and powerplants, and

moving sources, such as cars, trucks, and aircraft,” Util. Air

Regul. Grp. v. EPA, 573 U.S. 302, 308 (2014), not the

traditional state tort claims for failure to warn and deceptive

promotion.

III. STANDARD OF REVIEW

A. Motion to Dismiss

A trial court’s ruling on a motion to dismiss is reviewed de novo. The court must accept plaintiff's allegations as true and view them in the light most favorable to the plaintiff; dismissal is proper only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his or her claim that would entitle him or her to relief.

Delapinia v. Nationstar Mortg. LLC, 150 Hawai‘i 91, 97–98, 497

P.3d 106, 112–13 (2021) (quoting Goran Pleho, LLC v. Lacy, 144

Hawai‘i 224, 236, 439 P.3d 176, 188 (2019)).

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B. Jurisdiction

“A trial court’s determination to exercise personal

jurisdiction is a question of law reviewable de novo when the

underlying facts are undisputed.” Shaw v. N. Am. Title Co., 76

Hawai‘i 323, 326, 876 P.2d 1291, 1294 (1994) (citing Bourassa v.

Desrochers, 938 F.2d 1056, 1057 (9th Cir. 1991)). Plaintiffs

“need make only a prima facie showing that: (1) [defendant’s]

activities in Hawai‘i fall into a category specified by Hawai‘i's

long-arm statute, [Hawai‘i Revised Statutes (HRS)] § 634–35; and

(2) the application of HRS § 634–35 comports with due process.”

Id. at 327, 876 P.3d at 1295 (citing Cowan v. First Ins. Co. of

Hawai‘i, 61 Haw. 644, 649, 608 P.2d 394, 399 (1980)). When the

circuit court relies on pleadings and affidavits, without

conducting an “‘full-blown evidentiary hearing,’” the

plaintiff’s “‘allegations are presumed true and all factual

disputes are decided in [plaintiff’s] favor.’” Id. (citations

omitted).

C. Preemption

Questions of federal preemption “are questions of law

reviewable de novo under the right/wrong standard.” Rodrigues

v. United Pub. Workers, AFSCME Loc. 646, AFL-CIO, 135 Hawai‘i

316, 320, 349 P.3d 1171, 1175 (2015).

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IV. DISCUSSION

We affirm the circuit court’s orders denying

Defendant’s motions to dismiss. Similar to Baltimore,

Plaintiffs’ Complaint “clearly seeks to challenge the promotion

and sale of fossil-fuel products without warning and abetted by

a sophisticated disinformation campaign.” 31 F.4th at 233.

While Plaintiffs’ Complaint does reference global emissions

repeatedly, “these references only serve to tell a broader story

about how the unrestrained production and use of Defendants’

fossil-fuel products contribute to greenhouse gas pollution.”

Id. Plaintiffs do “not merely allege that Defendants

contributed to climate change and its attendant harms by

producing and selling fossil-fuel products; it is the

concealment and misrepresentation of the products’ known dangers

- and the simultaneous promotion of their unrestrained use -

that allegedly drove consumption, and thus greenhouse gas

pollution, and thus climate change.” Id. at 233-34.

As the circuit court explained:

The court recognizes that nuisance, trespass, and failure to warn vary somewhat in terms of their specific elements. All of these claims, however, share the same basic structure of requiring that a defendant engage in tortious conduct that causes injury to a plaintiff. Moreover, as the court understands it, Plaintiffs are relying on the same basic theory of liability to prove each of their claims, namely: that Defendants’ failures to disclose and deceptive promotion increased fossil fuel consumption, which – in turn – exacerbated the local impacts of climate change in Hawaiʻi.

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Because this is a traditional tort case alleging

Defendants misled consumers and should have warned them about

the dangers of using their products, Defendants’ arguments fail.

Defendants’ contacts with Hawaiʻi (selling oil and gas here)

arise from and relate to Plaintiffs’ claims (deceptive promotion

and failure to warn about the dangers of using the oil and gas

sold here). Defendants are alleged to have engaged in tortious

acts in Hawaiʻi and have extensive contacts in Hawaiʻi, and it is

therefore reasonable for Defendants to be haled into court here.

Further, neither displaced federal common law nor the CAA

preempts Plaintiffs’ state-law tort claims.

A. Defendants Are Subject to Specific Jurisdiction in Hawaiʻi

Specific jurisdiction attaches where (1) Defendants’

activity falls under the State’s long-arm statute, and (2) the

exercise of jurisdiction comports with due process. See Shaw,

76 Hawai‘i at 327, 876 P.2d at 1295. As we recently explained,

“the two-step inquiry may in fact be redundant” because Hawaiʻi’s

long-arm statute “was adopted to expand the jurisdiction of the

State’s courts to the extent permitted by the due process clause

of the Fourteenth Amendment.” Yamashita v. LG Chem, Ltd., 152

Hawai‘i 19, 21-22, 518 P.3d 1169, 1171-72 (2022), opinion after

certified question answered, 62 F.4th 496 (9th Cir. 2023)

(quoting Cowan, 61 Haw. at 649, 608 P.2d at 399). But while

“this collapsed inquiry yields the same practical result as the

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two-step test” and is “not improper,” “there is value in

remembering that personal jurisdiction rests on both negative

federal limits and positive state assertions of jurisdiction.”

Id. at 22, 518 P.3d at 1172. Accordingly, we engage in the two-

step test outlined in Yamashita.

First, Defendants’ activity in Hawai‘i falls under the

long-arm statute. Plaintiffs’ Complaint alleges that Defendants

conducted fossil fuel business in Hawaiʻi, committed torts in

Hawaiʻi, and caused injury in Hawaiʻi. See HRS § 634-35(a)

(1)-(2)(2016) 4 (persons subject to Hawaiʻi’s personal

jurisdiction when transact business or commit tort within

state). Further, Defendants did not dispute below and do not

dispute on appeal that their in-state activity falls under the

long-arm statute.

Second, exercising specific jurisdiction over

Defendants comports with due process. Specific jurisdiction

4 HRS § 634-35, Hawai‘i’s long-arm statute, provides:

Acts submitting to jurisdiction. (a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, the person's personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of the acts: (1) The transaction of any business within this State; (2) The commission of a tortious act within this State; (3) The ownership, use, or possession of any real estate situated in this State; (4) Contracting to insure any person, property, or risk located within this State at the time of contracting.

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comports with due process where: (1) defendants “purposefully

avail[ed] [themselves] of the privilege of conducting activities

in the forum, thereby invoking the benefits and protections of

its laws”; (2) plaintiffs’ claim “arises out of or relates to

the defendant[s’] forum-related activities”; and (3) exercising

specific jurisdiction “comport[s] with fair play and substantial

justice, i.e. it must be reasonable.” Int. of Doe, 83 Hawai‘i

367, 374, 926 P.2d 1290, 1297 (1996). This three-part test is

“commonly referred to as the minimum contacts test.” Greys Ave.

Partners, LLC v. Theyers, 431 F. Supp. 3d 1121, 1128 (D. Haw.

2020). “The minimum contacts test ‘ensures that a defendant

will not be haled into a jurisdiction solely as a result of

random, fortuitous, or attenuated contacts[.]’” Freestream

Aircraft (Bermuda) Ltd. v. Aero L. Grp., 905 F.3d 597, 603 (9th

Cir. 2018) (quoting Burger King, 471 U.S. at 475).

Defendants do not contest the first prong of the

minimum contacts test - that they “purposefully avail[ed]”

themselves of the forum. See id. Therefore, at issue is

whether Plaintiffs’ claims “arise out of or relate to”

Defendants’ Hawaiʻi contacts and whether the exercise of specific

jurisdiction is reasonable. Ford Motor, 141 S. Ct. at 1025.

Defendants further argue that, under Ford Motor, they did not

have “clear notice” they could be subject to specific

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jurisdiction in Hawaiʻi. Id. at 1030 (quoting World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

As set forth below, Defendants are subject to specific

jurisdiction in Hawaiʻi because: (1) Plaintiffs’ allegations that

Defendants misled consumers about the dangers of using their

products “arise out of” and “relate to” Defendants’ contacts

with Hawaiʻi, here Defendants’ sale and promotion of oil and gas

in Hawaiʻi, id. at 1025 (quoting Bristol-Myers Squibb Co. v.

Superior Ct. of Cal., 137 S. Ct. 1773, 1786 (2017)); (2) it is

reasonable for Hawaiʻi courts to exercise specific jurisdiction

over Defendants and doing so does not conflict with interstate

federalism principles because Hawaiʻi has a “significant

interest[] [in] ‘providing [its] residents with a convenient

forum for redressing injuries inflicted by out-of-state

actors,’” see id. at 1030 (quoting Burger King, 471 U.S. at

473); and (3) the U.S. Supreme Court has never imposed a “clear

notice” requirement, despite having the opportunity to do so,

see id. at 1025.

Courts typically analyze jurisdictional contacts on a

claim-by-claim basis. See, e.g., Seiferth v. Helicopteros

Atuneros, Inc., 472 F.3d 266, 274–75 (5th Cir. 2006). But

courts “need not assess contacts on a claim-by-claim basis if

all claims arise from the same forum contacts.” See, e.g.,

Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150-51

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(Tex. 2013). Plaintiffs bring five claims: public nuisance,

private nuisance, strict liability failure to warn, negligent

failure to warn, and trespass. Plaintiffs’ claims all arise

from the same alleged forum contacts for all Defendants – here,

Defendants’ products were transported, traded, distributed,

promoted, marketed, refined, manufactured, sold, and/or consumed

in Hawaiʻi. Plaintiffs’ claims also all arise from the same

alleged acts – here, Defendants’ deceptive promotion of and

failure to warn about the dangers of using oil and gas.

Accordingly, we examine all claims against all Defendants

together. See id.

1. Plaintiffs’ claims “arise out of or relate to” Defendants’ in-state conduct

Quoting Ford Motor, Defendants argue that when

personal jurisdiction is based on “‘advertising, selling, and

servicing,’” the alleged injuries must be “caused by the use and

malfunction of the defendant’s products within the forum State”

for specific jurisdiction to attach. 141 S. Ct. at 1022. In

short, Defendants say “the injury must occur in-state as a

result of the use of the product in-state” for specific

jurisdiction to attach. In this case, Defendants contend that

Hawaiʻi is a small state, with only 0.02% of the world’s

population, that accounts for only 0.06% of the world’s carbon

dioxide emissions per year. Quoting Native Vill. of Kivalina v.

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ExxonMobil Corp., Defendants argue that “‘the undifferentiated

nature of greenhouse gas emissions from all global sources and

their world-wide accumulation over long periods of time’ mean

that ‘there is no realistic possibility of tracing any

particular alleged effect of global warming to any particular

emissions by any specific person, entity, [or] group at any

particular point in time.’” 5 663 F. Supp. 2d 863, 876 (N.D. Cal.

2009) (“Kivalina I”), aff’d, 696 F.3d 849 (9th Cir. 2012).

Given the “undifferentiated nature of greenhouse gas emissions,”

Defendants argue the circuit court erred in asserting specific

jurisdiction.

5 In Kivalina I, the Village of Kivalina brought a federal common law nuisance claim for damages against 24 oil, energy, and utility companies. 663 F. Supp. 2d at 868. Defendants’ Kivalina I quotations are taken from the court’s Article III standing analysis, not from an analysis of whether the court had specific jurisdiction under the minimum contacts test. See id. at 881. The court concluded that because Kivalina sought damages for greenhouse gas emissions, which come from “global sources and their worldwide accumulation”, the “multitude of alternative culprits” meant Kivalina could not establish its injury was fairly traceable to Defendants. Id. at 880-81 (quotation marks omitted). Accordingly, the court dismissed the case for lack of standing. Id. at 882. Kivalina I involved different claims than those before us in this case, and was disposed of on standing, not minimum contacts grounds – it is inapposite with respect to Defendants’ jurisdictional arguments. See id. at 868, 882.

But Native Vill. of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012) (“Kivalina II”) is relevant to Defendants’ federal common law arguments. There, the Ninth Circuit affirmed the trial court’s dismissal for lack of jurisdiction in Kivalina I, but not because Kivalina lacked standing. Id. at 856–58. Instead, the Ninth Circuit determined that “AEP extinguished Kivalina’s federal common law public nuisance damage action, along with the federal common law public nuisance abatement actions.” 696 F.3d at 858. Accordingly, Kivalina could not bring its federal common law nuisance claim, and dismissal was proper. Id.

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We agree with Plaintiffs that “Defendants’ arguments

for reversal flow[] from a single, fatally flawed premise: they

say, in various formulations, that they can only be subject to

personal jurisdiction if the climate change injuries Plaintiffs

allege were caused by Defendants’ fossil fuels being burned in

Hawaiʻi.” 6 Indeed, the U.S. Supreme Court rejected an argument

similar to Defendants’ causation argument in Ford Motor, holding

that the “causation-only approach finds no support in this

Court’s requirement of a ‘connection’ between a plaintiff’s suit

and a defendant’s activities.” 141 S. Ct. at 1026.

In Ford Motor, the U.S. Supreme Court consolidated two

cases with the same underlying facts: in both, there was a car

accident in the forum state involving an allegedly

malfunctioning Ford vehicle designed, manufactured, and sold

outside of the forum state. Id. at 1023. Ford moved to dismiss

both cases, arguing that “the state court . . . had jurisdiction

only if the company’s conduct in the State had given rise to the

plaintiff’s claims.” Id. Ford argued that a “causal link” was

required: it was only subject to specific jurisdiction in the

forum state “if the company had designed, manufactured, or –

6 Defendants’ causation arguments are better saved for the merits stage of this litigation where Plaintiffs must prove causation with respect to all of its tort claims. Of course, we express no opinion as to the validity of those arguments.

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most likely – sold in the State the particular vehicle involved

in the accident.” Id.

The Supreme Court held that for specific jurisdiction

to attach, a defendant “must take ‘some act by which [it]

purposefully avails itself of the privilege of conducting

activities within the forum State.’” Id. at 1024 (quoting

Hanson v. Denckla, 357 U.S. 235, 253 (1958)). “The contacts

must be the defendant’s own choice and not ‘random, isolated, or

fortuitous.’” Id. at 1025 (quoting Keeton v. Hustler Mag.,

Inc., 465 U.S. 770, 774 (1984)). The contacts “must show that

the defendant deliberately ‘reached out beyond’ its home — by,

for example, ‘exploi[ting] a market’ in the forum State or

entering a contractual relationship centered there.” Id.

(quoting Walden v. Fiore, 571 U.S. 277, 285 (2014)).

Accordingly, for specific jurisdiction to attach, a

plaintiff’s claims “‘must arise out of or relate to defendant’s

contacts’ with the forum.” Id. (quoting Bristol-Myers, 137 S.

Ct. at 1786). “The first half of that standard asks about

causation; but the back half, after the ‘or,’ contemplates that

some relationships will support jurisdiction without a causal

showing.” Id. at 1026. Ford Motor thus requires only “a

‘connection’ between a plaintiff’s suit and a defendant’s

activities” for specific jurisdiction to attach. Id. at 1026

(quoting Bristol-Myers, 137 S. Ct. at 1776). “Or put just a bit

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differently, there must be an affiliation between the forum and

the underlying controversy, principally, [an] activity or an

occurrence that takes place in the forum State and is therefore

subject to the State’s regulation.” Id. at 1025 (quoting

Bristol-Myers, 137 S. Ct. at 1779) (quotation marks omitted).

Similar to Defendants’ arguments here, the Ford Motor

defendants contended that the link between their forum contacts

and plaintiffs’ claims “must be causal in nature: Jurisdiction

attaches ‘only if the defendant’s forum conduct gave rise to the

plaintiff’s claims.’” Id. at 1026. But the Supreme Court made

clear that it has “never framed the specific jurisdiction

inquiry as always requiring proof of causation — i.e., proof

that the plaintiff’s claim came about because of the defendant’s

in-state conduct.” Id.

The Court relied on World-Wide Volkswagen, 444 U.S. at

295, which “held that an Oklahoma court could not assert

jurisdiction over a New York car dealer just because a car it

sold later caught fire in Oklahoma.” Ford Motor, 141 S. Ct. at

1027. The World-Wide Volkswagen court “contrasted the dealer’s

position to that of two other defendants — Audi, the car’s

manufacturer, and Volkswagen, the car’s nationwide importer

(neither of which contested jurisdiction).” Id. “[I]f Audi and

Volkswagen’s business deliberately extended into Oklahoma (among

other States), then Oklahoma’s courts could hold the companies

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accountable for a car’s catching fire there — even though the

vehicle had been designed and made overseas and sold in New

York.” Id. And while “technically ‘dicta,’” the

Audi/Volkswagen scenario from World-Wide Volkswagen has become

the “paradigm case of specific jurisdiction” and has been

“reaffirmed” in other cases. Id. at 1027-28. This paradigm

case appeared again in Daimler, where the court again “did not

limit jurisdiction to where the car was designed, manufactured,

or first sold.” Id. at 1028.

Turning back to the facts in Ford Motor, the Court

explained that “[b]y every means imaginable - among them,

billboards, TV and radio spots, print ads, and direct mail -

Ford urges [people in the forum states] to buy its vehicles.”

Id. Ford dealers regularly maintained and repaired Ford cars,

and Ford distributed replacement parts throughout both states.

Id. Ford “systematically served a market in [the forum states]

for the very vehicles that the plaintiffs allege malfunctioned

and injured them in those States.” Id. Accordingly, “there is

a strong ‘relationship among the defendant, the forum, and the

litigation’ – the ‘essential foundation’ of specific

jurisdiction.” Id. (quoting Helicopteros Nacionales de

Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)).

The same is true here. Defendants do not contest that

they purposefully availed themselves of the rights and

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privileges of conducting extensive business in Hawaiʻi. Indeed,

the Complaint alleges that each Defendant conducted substantial

business in Hawaiʻi. Each defendant is alleged to have

transported, traded, distributed, promoted, marketed, refined,

manufactured, sold, and/or consumed oil and gas in Hawaiʻi.

Plaintiffs also allege that Defendants failed to warn consumers

in Hawaiʻi about the dangers of using the oil and gas Defendants

sold in the state and that Defendants engaged in a deceptive

marketing campaign to conceal, deny, and discredit efforts to

make those dangers known to the public. Plaintiffs further

allege that Defendants’ tortious failure to warn and deceptive

promotion caused extensive injuries in Hawaiʻi, including:

injury or destruction of City - or [Honolulu Board of Water Supply] - owned or operated facilities and property deemed critical for operations, utility services, and risk management, as well as other assets that are essential to community health, safety, and well-being; increased planning and preparation costs for community adaptation and resiliency to global warming’s effects; decreased tax revenue due to impacts on the local tourism - and ocean- based economy; increased costs associated with public health impacts; and others.

Just as in Ford Motor, “there is a strong

‘relationship among the defendant, the forum, and the

jurisdiction.” See id. (quoting Helicopteros, 466 U.S. at

414). Defendants sold and marketed oil and gas in Hawaiʻi,

availed themselves of Hawaiʻi markets and laws, and the at-issue

litigation alleges tortious acts and damages in Hawaiʻi that

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“arise out of” or “relate to” Defendants Hawaiʻi contacts, i.e.,

oil and gas business conducted in the state. See id. at 1026.

Indeed, the connection between Defendants, Hawaiʻi, and this

litigation is more closely intertwined than that of Ford Motor.

See id. at 1028. Unlike in Ford Motor, here, the alleged

injury-causing products (oil and gas) were marketed and sold in

the forum state. See id. Therefore, Defendants are subject to

specific jurisdiction because there is a clear and unambiguous

“affiliation between the forum and the underlying controversy.”

See id. (quoting Bristol-Myers, 137 S. Ct. at 1779) (quotation

marks omitted).

Defendants rely on Martins v. Bridgestone Am. Tire

Ops., LLC, 266 A.3d 753, 759, 761 (R.I. 2022). Martins is

inapposite. In Martins, a Rhode Island resident drove a truck

from Massachusetts to Connecticut, and struck a tree in

Connecticut when an allegedly defective tire made in and

installed in Tennessee failed. Id. at 756. The Rhode Island

resident was severely injured and was taken to and later died in

Rhode Island. Id. The only connection between Rhode Island

(the forum state) and the litigation was that the decedent was a

Rhode Island resident who passed away in Rhode Island. Id. at

761. The Rhode Island Supreme Court did not endorse the

causation test put forth by Defendants here – the court instead

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determined that the plaintiffs’ claims did not arise out of or

relate to the tire companies’ Rhode Island contacts. Id.

The Supreme Court has “endorse[d] an ‘effects’ test of

jurisdiction in situations involving tortious acts.” Shaw, 76

Hawaiʻi at 330, 876 P.2d at 1298 (quoting Calder v. Jones, 465

U.S. 783, 789 (1984)). “Under this theory, asserting

jurisdiction against nonresident defendants who commit torts

directed at a forum state with the intention of causing in-state

‘effects’ satisfies due process.” Id. The effects test inquiry

“focuses on conduct that takes place outside the forum state and

that has effects inside the forum state.” Freestream Aircraft,

905 F.3d at 604. Generally, “[t]he commission of an intentional

tort in a state is a purposeful act that will satisfy the first

two requirements [of the minimum contacts test].” Id. at 603

(quoting Paccar Int’l, Inc. v. Com. Bank of Kuwait, S.A.K., 757

F.2d 1058, 1064 (9th Cir. 1985)). Therefore, where a

nonresident defendant is alleged to have committed a tort

directed at the forum state, the effects test is an alternate

due process theory capable of establishing that: (1) the

defendant purposefully availed themselves of the forum; and (2)

the plaintiff’s claim arises out of or relates to the

defendant’s forum contacts. Id. at 1062.

Plaintiffs argues that “the effects test . . . is

satisfied here” because “the Complaint alleges that the targets

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of Defendants’ deceptive marketing and failure to warn included

audiences and consumers in Hawaiʻi, and those misrepresentations

and omissions, directed at least in part to Hawaiʻi, contributed

to Plaintiff’s injuries.” Defendants counter that Plaintiffs

failed to identify in their Complaint “a single deceptive

message that Defendants allegedly made in or directed at

Hawaiʻi,” which “defeats personal jurisdiction under the effects

test.”

The circuit court did not engage in an “effects” test

analysis, and the parties’ briefs almost exclusively address the

traditional “minimum contacts” test. Because Defendants are

subject to specific jurisdiction under the minimum contacts

test, see infra Section IV(A)(1), it is not necessary to engage

in an effects test analysis as to the first two prongs of the

due process inquiry. See Louis Vuitton Malletier, S.A. v.

Mosseri, 736 F.3d 1339, 1357 (11th Cir. 2013) (determining that

because the plaintiff had met the “purposeful availment” prong

of the “minimum contacts” test, the court “need not analyze the

‘effects test’ here”).

Relatedly, Defendants argue that, under Shaw,

Plaintiffs’ claims “bear at most an ‘incidental’ . . .

relationship to Defendants’ in-state activities and thus lack

the requisite close connection found in Ford Motor that

permitted exercise of specific jurisdiction.” In Shaw, the

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court held that for the purposes of the long-arm statute’s

“transacting business” subsection, see HRS § 634-35(a)(1), the

alleged Hawaiʻi business conduct (the signing of escrow

documents) was “merely incidental” to business at the crux of

the case (the escrow transaction, which happened in California).

Shaw, 76 Hawaiʻi at 328, 876 P.2d at 1296. Thus, the plaintiff

failed to sufficiently allege, for the purposes of the long-arm

statute, that the defendant “transact[ed] business” in Hawaiʻi.

Id.

The Court in Shaw held that the plaintiff sufficiently

alleged under another subsection of the long-arm statute that

the defendant committed a “tortious act” in Hawaiʻi, see HRS

§ 634-35(a)(2), and that due process was satisfied under the

“effects” test. Shaw, 76 Hawaiʻi at 329-330, 332, 876 P.2d at

1297-98, 1300. Notably, Shaw’s “merely incidental” holding did

not affect the court’s due process analysis – the defendant was

still subject to specific jurisdiction. See Shaw, 76 Hawaiʻi at

328, 876 P.2d at 1296. Here, Defendants’ in-state conduct is

anything but “merely incidental” to Plaintiffs’ claims. See id.

2. Exercising specific jurisdiction is reasonable and does not “conflict with federalism principles”

The exercise of specific jurisdiction must “comport

with fair play and substantial justice, i.e. it must be

reasonable.” Doe, 83 Hawai‘i at 374, 926 P.2d at 1297. In Doe,

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this court adopted the Ninth Circuit’s seven-factor test for

determining whether the exercise of jurisdiction is reasonable,

which is as follows:

(1) the extent of the defendants’ purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of any conflict with the sovereignty of the defendants’ state; (4) the forum state’s interest in adjudicating the dispute; (5) concerns of judicial efficiency; (6) the significance of the forum to the plaintiff's interest in relief; and (7) the existence of alternative fora.

Id. (citing Caruth v. Int’l Psychoanalytical Ass’n, 59 F.3d 126,

127 (9th Cir. 1995)).

“None of the factors is solely dispositive; all seven

are weighed in the factual circumstances in which they arise.”

Id. (citation omitted). And, as here, “where a defendant who

purposefully has directed [their] activities at forum residents

seeks to defeat jurisdiction, [they] must present a compelling

case that the presence of some other considerations would render

jurisdiction unreasonable.” Burger King, 471 U.S. at 477

(emphasis added). Therefore, “we begin with a presumption of

reasonableness.” Caruth, 59 F.3d at 128.

Defendants do not engage with the Doe factors, but

appear to argue that factors three and four weigh against

determining that the exercise of jurisdiction over Defendants is

“reasonable.” Doe, 83 Hawai‘i at 374, 926 P.2d at 1297.

Defendants say that “exercising personal jurisdiction here would

be ‘[un]reasonable, in the context of our federal system of

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government.’” Quoting Ford Motor, 141 S. Ct. at 1024)(brackets

in original). According to Defendants, permitting specific

jurisdiction in this context would subject companies to climate

change suits in every court in the country. And if Plaintiffs’

theory were adopted abroad, “American companies could be sued on

climate change-related claims in courts around the world.”

According to Defendants, “[d]ue process does not countenance

that result.” We review each of the Doe factors in turn, and

conclude that they weigh in favor of exercising specific

jurisdiction over Defendants because doing so is “reasonable.”

Id. Defendants have not “present[ed] a compelling case” that

the exercise of specific jurisdiction here would be

unreasonable. See Burger King, 471 U.S. at 477.

The first factor examines “the extent of the

defendants’ purposeful interjection into the forum state’s

affairs.” Doe, 83 Hawai‘i at 374, 926 P.2d at 1297. Defendants

are alleged to have engaged in repeated, purposeful business in

Hawaiʻi. Their products were transported, traded, distributed,

promoted, marketed, refined, manufactured, sold, and/or consumed

in Hawaiʻi.

The second factor examines “the burden on the

defendant of defending in the forum.” Doe, 83 Hawai‘i at 374,

926 P.2d at 1297. Defendants are multi-national oil and gas

corporations with billions in annual revenues. The burden on

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Defendants in defending a suit in a state where Defendants

conduct extensive oil and gas business is slight.

The third factor examines “the extent of any conflict

with the sovereignty of the defendants’ [home] state.” Id.

Defendants’ primary argument is that Plaintiffs’ “claims []

implicate the interests of numerous other States and nations,

many of which do not share the ‘substantive social policies’

Plaintiffs seek to advance - such as curbing energy production

and the use of fossil fuels or allocating the downstream costs

of consumer use to the energy companies to bear directly.” But

this lawsuit does not seek to regulate emissions or curb energy

production – it seeks to hold Defendants accountable for

allegedly (1) failing to warn about the dangers of their fossil

fuel products and (2) deceptively promoting those products.

Holding Defendants accountable for their Hawaiʻi torts implicates

the sovereignty of no state other than Hawaiʻi. And, even if

this case did involve “substantive social policies” not advanced

by other states, “the ‘fundamental substantive social policies’

of another State may be accommodated through application of the

forum’s choice-of-law rules.” Burger King, 471 U.S. at 477.

Relying on Bristol-Myers Squibb Co. v. Superior Ct. of

Cal., 137 S. Ct. at 1780, Defendants further contend that

“asserting personal jurisdiction over these out-of-state

Defendants for global climate change would impermissibly

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interfere with the power of Defendants’ home States (or nations)

over their own corporate citizens and could punish commercial

conduct that occurred beyond the forum State’s borders.”

However, Defendants’ reliance on Bristol-Myers is misplaced.

The U.S. Supreme Court in Bristol-Myers addressed

whether a claim arises out of or relates to a defendant’s

contacts – the second prong of the minimum contacts test. Id.

at 1781. The Court did not hold that specific jurisdiction was

lacking because doing so would be unreasonable. See id.

Instead, the Court determined that specific jurisdiction was

improper because there was no “connection between the forum and

the specific claims at issue.” See id.

The fourth factor examines “the forum state’s interest

in adjudicating the dispute.” Doe, 83 Hawai‘i at 374, 926 P.2d

at 1297. Defendants argue that “Hawaiʻi’s interests in this suit

. . . are no greater than other States,’” and later state that

Hawaiʻi’s interest is “slight.” However, we agree with

Plaintiffs that Hawaiʻi “has a strong interest in remedying local

harms related to corporate misconduct.”

The fifth factor examines the “concerns of judicial

efficiency.” Id. Because this factor is not relevant here, and

Defendants make no arguments to the contrary, we do not address

it.

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The sixth factor examines “the significance of the

forum to the plaintiff’s interest in relief.” Id. Again,

Plaintiffs seeks monetary damages for injuries allegedly

suffered in Hawaiʻi as a result of Defendants’ alleged tortious

conduct in Hawaiʻi.

The seventh factor examines the “existence of

alternate fora.” Id. Defendants have not shown that there is

an alternate forum that is better situated than Hawaiʻi to decide

this dispute.

In sum, the Doe factors weigh heavily in favor of

determining it is reasonable to exercise specific jurisdiction

over Defendants. See id. Further, given that Defendants

purposefully availed themselves of Hawaiʻi markets, Defendants

have failed to overcome the presumption that the exercise of

specific jurisdiction is reasonable. See Burger King, 471 U.S.

at 477, Caruth, 59 F.3d at 128.

3. The Due Process Clause does not require that Defendants have “clear notice” they could be subject to specific jurisdiction in Hawaiʻi

The exercise of specific jurisdiction is governed by

the three-part minimum contacts test: jurisdiction is proper

where: (1) the defendant purposefully avails itself of the

forum; (2) the defendant’s contacts “arise out of or relate to”

the plaintiff’s claim; and (3) the exercise of specific

jurisdiction is reasonable. Doe, 83 Hawai‘i at 374, 926 P.2d at

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1297. Where the minimum contacts test is met, the exercise of

specific jurisdiction comports with due process. Id.

Defendants argue that in addition to the minimum

contacts test, the Fourteenth Amendment’s “Due Process Clause

requires a defendant’s activities in the forum to place it on

‘clear notice’ that it is susceptible to a lawsuit in that State

for the claims asserted by a plaintiff,” Ford Motor, 141 S. Ct.

at 1025, 1030. (Emphasis added.) This is wrong. The minimum

contacts test “provides defendants with ‘fair warning’” or, as

the Supreme Court explained, “knowledge that ‘a particular

activity may subject [it] to the jurisdiction of a foreign

sovereign.” Id. at 1025 (emphasis added) (quoting Burger King,

471 U.S. at 472) (brackets in original). “[F]air warning” is

not an additional requirement for the exercise of specific

jurisdiction. Rather, “fair warning” is what due process

“provides.” If the minimum contacts test is met, a defendant

has fair warning; and if it has fair warning, then due process

is satisfied.

The U.S. Supreme Court has not held that “clear

notice” is a separate requirement (on top of the minimum

contacts test) necessary for the exercise of specific

jurisdiction. In Ford Motor, the Court used the phrase “clear

notice” three times, once in a parenthetical and twice when

summarizing the holdings in World-Wide Volkswagen. Id. at 1025,

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1027, 1030. At no point did the Court in Ford Motor hold that

“clear notice” was required for the exercise of specific

jurisdiction. Id. Rather, the Supreme Court used the phrase

“clear notice” in Ford Motor and other cases like World-Wide

Volkswagen to describe situations where a defendant’s contacts

were so pervasive that the defendant had more than “fair

warning” they could be subject to specific jurisdiction in a

forum. Id. at 1025, 1030; see also World-Wide Volkswagen, 444

U.S. at 297.

In sum, if a defendant has purposefully availed

themselves of a forum, the claim arises from or relates to those

contacts with the forum, and the exercise of jurisdiction is

reasonable, the defendant has “fair warning” they could be

subject to specific jurisdiction in that forum. See id. at

1025. The minimum contacts test (and the “fair warning” it

provides) allows a defendant to “‘structure [its] primary

conduct’ to lessen or avoid exposure to a given State’s courts.”

Id. (quoting World-Wide Volkswagen, 444 U.S. at 297 (brackets in

original)). Here, the exercise of specific jurisdiction

comports with due process because: (1) Defendants purposefully

availed themselves of the benefits and protections of Hawaiʻi

laws; (2) Plaintiffs’ claims “arise out of or relate to”

Defendants’ Hawaiʻi contacts; and (3) the exercise of specific

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jurisdiction is reasonable. Defendants had – at a minimum –

“fair warning” they could be subject to suit in Hawaiʻi. See id.

B. Federal Common Law Does Not Preempt Plaintiffs’ Claims

Defendants next argue that “[f]ederal law exclusively

governs claims seeking relief for injuries allegedly caused by

interstate and international emissions.” They say that the

“basic scheme of the [federal] Constitution . . . demands that

federal common law,” AEP, 564 U.S. at 421 (quotation marks

omitted), govern any dispute involving “air and water in their

ambient or interstate aspects,” Illinois v. City of Milwaukee,

406 U.S. 91, 103 (1972) (“Milwaukee I”). Defendants’ argument

ignores well-settled law that “the federal common law of

nuisance that formerly governed transboundary pollution suits no

longer exists due to Congress’s displacement of that law through

the CAA.” Boulder, 25 F.4th at 1260; see also AEP, 564 U.S. at

421.

And despite its displacement, Defendants also argue

that federal common law plays a role in our preemption analysis.

They say that we should first look to whether displaced federal

common law preempts Plaintiffs’ claims, and then to whether the

CAA displaced federal common law. We disagree. “When a federal

statute displaces federal common law, the federal common law

ceases to exist.” Baltimore, 31 F.4th at 205. And as the

Supreme Court explained in AEP, once federal common law is

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displaced, “the availability vel non of a state lawsuit

depends inter alia on the preemptive effect of the federal Act,”

not displaced federal common law. 564 U.S. at 429.

Accordingly, our preemption analysis requires analyzing the

preemptive effect of only the CAA – and, it has none in this

context. See supra Section IV(C).

Defendants’ federal common law preemption arguments

also fail because Plaintiffs’ claims do not seek to regulate

emissions. The federal common law cited by Defendants formerly

governed transboundary pollution abatement and damages suits,

not the tortious marketing and failure to warn claims brought by

Plaintiffs. We agree with the circuit court:

Plaintiffs’ framing of their claims in this case is more accurate. The tort causes of action are well recognized. They are tethered to existing well-known elements including duty, breach of duty, causation, and limits on actual damages caused by the alleged wrongs. As this court understands it, Plaintiffs do not ask for damages for all effects of climate change; rather, they seek damages only for the effects of climate change allegedly caused by Defendants’ breach of Hawaiʻi law regarding failures to disclose, failures to warn, and deceptive promotion (without deciding the issue, presumably by applying Hawaiʻi’s substantial factor test, see, e.g., Estate of Frey v. Mastroianni, 146 Hawaiʻi 540, 550 (2020)). Plaintiffs do not ask this court to limit, cap, or enjoin the production and sale of fossil fuels. Defendants’ liability in this case, if any, results from alleged tortious conduct, and not from lawful conduct in producing and selling fossil fuels.

Simply put, Plaintiffs’ claims do not seek to regulate

emissions. Instead, Plaintiffs’ Complaint “clearly seeks to

challenge the promotion and sale of fossil-fuel products without

warning and abetted by a sophisticated disinformation campaign.”

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Baltimore, 31 F.4th at 233. Plaintiffs’ references to emissions

in its Complaint “only serve to tell a broader story about how

the unrestrained production and use of Defendants’ fossil-fuel

products contribute to greenhouse gas pollution.” Id.

1. The federal common law governing interstate pollution abatement and damages suits was displaced by the CAA

Because the CAA displaced federal common law, we

cannot accept Defendants' argument that the federal common law

governs here. First, “AEP extinguished [] federal common law

public nuisance damage action[s], along with the federal common

law public nuisance abatement actions.” Native Vill. of

Kivalina v. ExxonMobil Corp., 696 F.3d 849, 857 (9th Cir. 2012)

(“Kivalina II”). Federal appellate courts have recently

reaffirmed that the federal common law once governing interstate

pollution damages and abatement suits was displaced. 7 In Rhode

Island v. Shell Oil Prod. Co., 35 F.4th 44 (1st Cir. 2022),

cert. denied sub nom. Shell Oil Prod. Co. v. Rhode Island, 143

S. Ct. 1796 (2023), the First Circuit held that “[t]he Clean

Water Act and the [CAA] . . . have statutorily displaced any

federal common law that previously existed,” and as such, the

7 These courts did so in the context of removal jurisdiction. All held that federal common law did not govern the plaintiffs’ claims, and as such, federal courts did not have jurisdiction over the at-issue state law claims. But, regardless of context, all three cases directly addressed whether federal common law governs state common law claims based on failure to warn and deceptive promotion theories. And all three courts determined that federal common law had been displaced.

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court could not “rule that any federal common law controls Rhode

Island’s claims.” Id. at 55 (quotation marks omitted).

In Baltimore, the Fourth Circuit held that federal

common law did not control the city of “Baltimore’s state-law

claims because federal common law in this area cease[d] to exist

due to statutory displacement, Baltimore [did] not invoke[] the

federal statute displacing federal common law, and . . . the CAA

does not completely preempt Baltimore’s claims.” 31 F.4th at

204. And in Boulder, the Tenth Circuit held that “the federal

common law of nuisance that formerly governed transboundary

pollution suits no longer exists due to Congress’s displacement

of that law through the CAA.” 25 F.4th at 1260. Indeed,

Defendants even concede that “[t]he Supreme Court, the Ninth

Circuit, and the Second Circuit have all held that a tort-law

claim for greenhouse gas emissions arising under federal common

law fails as a matter of law under [Federal Rules of Civil

Procedure Rule] 12(b)(6) because Congress displaced such claims

when it established a comprehensive regulatory scheme for

emissions via the CAA.” (Emphasis added.)

Nonetheless, Defendants cite to three cases (Milwaukee

I, Oakland I, and City of New York) that they argue support the

proposition that federal common law governs Plaintiffs’ claims.

These cases have either been overturned (Milwaukee I and Oakland

I) or rely on flawed reasoning (City of New York).

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In Milwaukee I, the state of Illinois brought an

original action against the state of Wisconsin in the Supreme

Court for Wisconsin’s “pollution . . . of Lake Michigan, a body

of interstate water.” 8 Milwaukee I, 406 U.S. at 93. Illinois

alleged Wisconsin discharged “200 million gallons of raw or

inadequately treated sewage and other waste materials” daily

into Lake Michigan. Id. The Supreme Court explained that

“where there is an overriding federal interest in the need for a

uniform rule of decision or where the controversy touches basic

interests of federalism, we have fashioned federal common law.”

Id. at 105 n.6. The Court concluded that “[c]ertainly these

same demands for applying federal law are present in the

pollution of a body of water such as Lake Michigan,” and that

federal law governs disputes involving “air and water in their

ambient or interstate aspects.” Id. at 103, 105 n.6.

Accordingly, the Court held that the “question of

apportionment of interstate waters is a question of ‘federal

common law’ upon which state statutes or decisions are not

conclusive.” Id. at 105. Notably, the Court acknowledged that

the federal common law it created might one day be superseded by

statute, explaining: “new federal laws and new federal

8 The Court ultimately determined that “original jurisdiction [was] not mandatory,” declined to exercise original jurisdiction, and remitted the case to the “appropriate district court whose powers are adequate to resolve the issues.” Milwaukee I, 406 U.S. at 98, 108.

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regulations may in time preempt the field of federal common law

of nuisance.” Id. at 107.

After the Court remitted Milwaukee I to the district

court to determine the outcome of the case under federal common

law, Congress “enacted the Federal Water Pollution Control

Amendments of 1972 [(1972 FWPCA)].” City of Milwaukee v.

Illinois, 451 U.S. 304, 307 (1981) (“Milwaukee II”). On appeal

in Milwaukee II, the Court held that in enacting the 1972 FWPCA,

which governed sewage discharges into interstate bodies of

water, Congress displaced the federal common law created in

Milwaukee I. The Court concluded:

Congress has not left the formulation of appropriate federal standards to the courts through application of often vague and indeterminate nuisance concepts and maxims of equity jurisprudence, but rather has occupied the field through the establishment of a comprehensive regulatory program supervised by an expert administrative agency.

[ . . . ]

The establishment of such a self-consciously comprehensive program by Congress, which certainly did not exist when [Milwaukee I] was decided, strongly suggests that there is no room for courts to attempt to improve on that program with federal common law.

Milwaukee II, 451 U.S. at 317, 319.

Accordingly, the Court determined that “no federal

common-law remedy was available,” thus overruling Milwaukee I.

Id. at 332. That holding was reaffirmed in AEP when the Supreme

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Court determined that the federal common law claims permitted by

Milwaukee I were displaced by the CAA. 9 AEP, 546 U.S. at 424.

Defendants also rely on City of Oakland v. BP PLC, 325

F. Supp. 3d 1017, 1021–22 (N.D. Cal. 2018) (“Oakland I”),

vacated and remanded sub nom. City of Oakland v. BP PLC, 960

F.3d 570 (9th Cir. 2020), opinion amended and superseded on

denial of reh’g, 969 F.3d 895 (9th Cir. 2020). In Oakland I,

the cities of Oakland and San Francisco brought suit against

five large oil and gas companies 10 in state court alleging one

count of nuisance on the same theory that Plaintiffs raises

9 Defendants also cite to Illinois v. City of Milwaukee, 731 F.2d 403, 411 (7th Cir. 1984) (“Milwaukee III”) for the proposition that the displacement of “one form of federal law (common law) by another (federal statute) does not somehow breathe life into nonexistent state law.” On remand from Milwaukee II, Illinois argued that “Illinois common law controlled this case until Milwaukee I judicially promulgated federal common law, and that since the 1972 FWPCA dissipated federal common law, Illinois law must again control.” Id. at 406. The Seventh Circuit disagreed, and held that, “[g]iven the logic of Milwaukee I and Milwaukee II, we think federal law must govern in this situation except to the extent that the 1972 FWPCA (the governing federal law created by Congress) authorizes resort to state law.” Id. at 411. Respectfully, the Seventh Circuit’s approach in Milwaukee III ignores the presumption that state laws and claims are not preempted absent “a clear and manifest purpose of Congress” to do so. See Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) (“[W]e start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.”).

Not surprisingly, the Supreme Court implicitly overruled the Seventh Circuit’s Milwaukee III decision in AEP when the Court held that, after federal common is displaced, “the availability vel non of a state lawsuit depends inter alia on the preemptive effect of the federal Act.” 564 U.S. at 429. Thus, contrary to Milwaukee III and Defendants’ argument, state law that was previously preempted by federal common law does have new life when the federal common law is displaced. See id.

10 The five defendants in Oakland I (Chevron Corporation, Exxon Mobil Corporation, BP p.l.c., Royal Dutch Shell plc, and ConocoPhillips) are also defendants in this case.

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here. Id. at 1021-22. The case was removed to federal court,

and Oakland and San Francisco then amended their complaint to

add a “separate claim for public nuisance under federal common

law.” Id. The district court determined that AEP and Kivalina

II held that the CAA displaced federal common law claims for

emissions abatement and damages. Id. at 1024. Accordingly, the

district court dismissed Oakland and San Francisco’s federal

common law claim and the state law nuisance claim because

“nuisance claims must stand or fall under federal common law.”

Id. at 1028.

On appeal, the Ninth Circuit reversed the federal

district court, determining that Oakland and San Francisco only

added the federal common law claim “to conform” to an earlier

district court ruling. City of Oakland v. BP PLC, 969 F.3d 895,

909 (9th Cir. 2020) (“Oakland II”). The Ninth Circuit also

determined that the state law nuisance claim should not have

been dismissed because “it is not clear that the claim requires

an interpretation or application of federal law at all, because

the Supreme Court has not yet determined [(since AEP displaced

the old federal common law)] that there is a [new] federal

common law of public nuisance relating to interstate pollution.”

Id. at 906. Indeed, in Kivalina II, the Ninth Circuit held just

that – concluding that federal common law suits (not state

common law suits) “aimed at imposing liability on energy

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producers for ‘acting in concert to create, contribute to, and

maintain global warming’ and ‘conspiring to mislead the public

about the science of global warming,’ [were] displaced by the

[CCA].” Id. (quoting Kivalina II, 696 F.3d at 854) (emphasis

added). Therefore, the trial court was incorrect when it

determined that displaced federal common law required the

dismissal of Oakland and San Francisco’s state common law claim

because it was preempted. Id. Since displaced federal common

law did not provide a federal jurisdictional hook, the Ninth

Circuit remanded the case to the federal district court to

determine whether there was an alternate basis for federal

jurisdiction with respect to only the state common law claim.

Id. at 911.

Further, the Second Circuit in City of New York also

held that the “[CAA] displace[d] federal common law claims

concerned with domestic greenhouse gas emissions.” 993 F.3d at

95. Thus, Defendants’ best case – City of New York – goes

against them in part by holding that the very federal common law

they rely on is no longer good law. Indeed, City of New York is

consistent with AEP, Rhode Island, Baltimore, Boulder, Kivalina

II, and Oakland II in holding that the federal common law once

governing interstate pollution suits was displaced by the CAA.

Accordingly, Defendants’ argument that federal common law

preempts Plaintiffs’ claims fails, because Defendants do not

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point to any case recognizing a federal common law action for

interstate pollution suits that has not been displaced by the

CAA.

2. Federal common law does not retain preemptive effect after it is displaced

Defendants acknowledge that the federal common law

that once governed interstate pollution damages and abatement

suits was displaced by the CAA. Nonetheless, Defendants argue

that despite displacement, federal common law still lives.

Defendants say that federal common law still lives but only with

enough power to preempt state common law claims “involving

interstate air pollution.” According to Defendants, federal

common law is both dead and alive – it is dead in that the CAA

has displaced it, but alive in that it still operates with

enough force to preempt Plaintiffs’ state law claims.

Under Defendants’ preemption theory, this court should

first look to whether the federal common law governing

interstate pollution damages and abatement claims preempts

Plaintiffs’ state common law claims. After determining that

federal common law does in fact preempt Plaintiffs’ state common

law claims, Defendants say this court should then look to

whether the CAA displaced federal common law claims (and

Defendants say it did). Indeed, were this court to adopt

Defendants’ two-step approach, Plaintiffs would have no viable

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cause of action under state or federal law. Federal common law

would preempt state common law, and in turn, the CAA would

displace federal common law. No common law cause of action

would be available. Further, no federal statutory cause of

action would be available because the CAA does not contain one

available to Plaintiffs, see 42 U.S.C. § 7401 et seq., and any

state statutory cause of action would be preempted by federal

common law, which, in turn, would be displaced by the CAA.

We decline to follow Defendants’ two-step approach

because it engages in backwards reasoning. This court would

first need to determine whether the federal common law governing

interstate pollution suits is still good law before determining

whether it can preempt state law claims. And, as we have

explained above, the federal common law governing interstate

pollution suits was displaced by the CAA and “no longer exists.”

Boulder, 25 F.4th at 1260; see also Milwaukee II, 451 U.S. at

314 (“[W]hen Congress addresses a question previously governed

by a decision rested on federal common law the need for such an

unusual exercise of lawmaking by federal courts disappears.”).

Defendants’ approach cannot be reconciled with AEP.

In AEP, two groups of plaintiffs, including eight States,

brought suit against the Tennessee Valley Authority and four

private companies who were allegedly responsible for 10% of

global emissions. 564 U.S. at 418. The plaintiffs brought

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federal common law and state law nuisance claims, and “sought

injunctive relief requiring each defendant to cap its carbon

dioxide emissions and then reduce them by a specified percentage

each year for at least a decade.” 564 U.S. at 419 (quotation

marks omitted). The Supreme Court held that the CAA displaced

only federal common law governing interstate emissions. Id. at

428-29. Having determined that federal common law was

displaced, the Court concluded that “the availability vel non of

a state lawsuit depends inter alia on the preemptive effect of

the [CAA].” Id. at 429. And since the parties had not briefed

whether the CAA preempted “the availability of a claim under

state nuisance law,” the Court left “the matter open for

consideration on remand.” Id.

In AEP, with regard to the plaintiffs’ state common

law nuisance claims, the relevant inquiry was not: (1) whether

federal common law preempted the remaining state law claims, and

if so, (2) whether the CAA displaced the federal common law.

Id. Instead, AEP made clear that whether the state law nuisance

claims were preempted depended only on an analysis of the CAA

because “‘when Congress addresses a question previously governed

by a decision rested on federal common law, . . . the need for

such an unusual exercise of law-making by federal courts

disappears.’” AEP, 564 U.S. at 423 (quoting Milwaukee II, 451

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U.S. at 314). 11 The Supreme Court did not analyze the federal

common law’s preemptive effect because it was displaced by the

CAA. See id. And if federal common law retained preemptive

effect after displacement, the Court would have instructed the

trial court on remand to examine whether displaced federal

common law preempted the state law claims. See id.

Simply put, displaced federal common law plays no part

in this court’s preemption analysis. Once federal common law is

displaced, the federal courts’ task is to “interpret and apply

statutory law[.]” Nw. Airlines, Inc. v. Transp. Workers Union

of Am., AFL-CIO, 451 U.S. 77, 95 n.34 (1981) (emphasis added).

Therefore, “[a]s instructed in AEP and supported by [Kivalina

II], we look to the federal act that displaced the federal

common law to determine whether the state claims are preempted.”

Boulder, 25 F.4th at 1261. The correct preemption analysis

requires an examination only of the CAA’s preemptive effect

because “AEP extinguished [] federal common law public nuisance

damage action[s], along with the federal common law public

11 There is a “significant distinction between the statutory

displacement of federal common law and the ordinary preemption of a state law.” Baltimore, 31 F.4th at 205. Federal common law is disfavored because “it is primarily the office of Congress, not the federal courts, to prescribe national policy in areas of special federal interest.” AEP, 564 U.S. at 423- 24. Thus, “[l]egislative displacement of federal common law does not require the ‘same sort of evidence of a clear and manifest [congressional] purpose’ demanded for preemption of state law.” Id. at 423. Instead, “[t]he test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute ‘speak[s] directly to [the] question’ at issue.” Id. at 424. When federal common law is displaced, it “no longer exists.” Boulder, 25 F.4th at 1260.

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nuisance abatement actions.” Kivalina II, 696 F.3d at 857; see

also id. at 866 (Pro, J., concurring) (“Once federal common law

is displaced, state nuisance law becomes an available option to

the extent it is not preempted by federal law.”).

Defendants primarily rely on City of New York to argue

that their two-step preemption analysis is the correct one. In

that case, New York City filed a state-law tort suit in federal

court “against five oil companies to recover damages caused by

those companies’ admittedly legal commercial conduct in

producing and selling fossil fuels around the world.” 993 F.3d

at 86. At issue was whether New York City’s claims were

preempted by either federal common law or the CAA. Id. at 89.

The Second Circuit first looked to whether federal common law

governing interstate pollution damages and abatement suits

preempted New York City’s state law claims, holding that it did.

Id. at 95 (determining that New York City’s “claims must be

brought under federal common law”). Next, the court examined

whether the federal common law was displaced by the CAA, holding

again that it was. Id. at 98 (determining that “federal common

law claims concerning domestic greenhouse gas emissions are

displaced by statute.”). Thus, the Second Circuit held that

displaced federal common law preempted New York City’s state law

claims. Id. at 95-98.

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We agree with the Fourth Circuit’s analysis in

Baltimore, which explained why City of New York is not

persuasive in that respect:

[A]fter recognizing federalism and the need for a uniform rule of decision as federal interests, City of New York confusingly concludes that federal common law is “most needed in this area” because New York's state-law claims touch upon the federal government’s relations with foreign nations. [993 F.3d] at 91–92. But it never details what those foreign relations are and how they conflict with New York’s state-law claims. See id. at 92. The same is true when City of New York declares that state law would “upset[] the careful balance” between global warming’s prevention and energy production, economic growth, foreign policy, and national security. Id. at 93. Besides referencing statutes acknowledging policy goals, the decision does not mention any obligatory statutes or regulations explaining the specifics of energy production, economic growth, foreign policy, or national security, and how New York law conflicts therewith. See id. It also does not detail how those statutory goals conflict with New York law. See id. [Critically,] City of New York essentially evades the careful analysis that the Supreme Court requires during a significant-conflict analysis.

Id. (emphasis added) (footnote omitted).

3. Even were federal common law to control, it would not govern Plaintiffs’ claims

Even if federal common law governing interstate

pollution claims had not been displaced, Plaintiffs’ claims

would not be preempted by it. The claims permitted by federal

common law in this area were brought against polluting entities

and sought to enjoin further pollution. 12 See, e.g., Milwaukee

12 Defendants cite to no cases recognizing federal common law claims for interstate pollution damages. But this is neither here nor there. Damages claims are no longer available under federal common law. In Kivalina II, Kivalina sought “damages for harm caused by past emissions.” 696 F.3d at 857. The Ninth Circuit determined that “displacement of a federal common law right of action means displacement of remedies.” Id. Therefore, “AEP extinguished Kivalina’s federal common law public nuisance damage action,

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I, 406 U.S. at 93 (requesting court enjoin “pollution by the

defendants of Lake Michigan”). Indeed, in AEP, the plaintiffs

sued the Tennessee Valley Authority and other powerplant owners

and sought injunctive relief to prevent future emissions. 564

U.S. at 418. As the Supreme Court explained in AEP, this

“specialized federal common law” governed “suits brought by one

State to abate pollution emanating from another State.” Id. at

421. Thus, the source of the injury in federal common law

claims is pollution traveling from one state to another. That

is not what Plaintiffs allege here.

Rather, as the Ninth Circuit explained in earlier

proceedings in this case, Plaintiffs “allege that oil and gas

companies knew about climate change, understood the harms energy

exploration and extraction inflicted on the environment, and

concealed those harms from the public.” Sunoco LP, 39 F.4th at

1106 (emphasis added). As Plaintiffs allege, “Defendants’

liability is causally tethered to their failure to warn and

deceptive promotion,” and “nothing in this lawsuit incentivizes

— much less compels — Defendants to curb their fossil fuel

production or greenhouse gas emissions.” Simply put, the source

of Plaintiffs’ alleged injury is Defendants’ allegedly tortious

along with the federal common law public nuisance abatement actions.” Id. We agree. Therefore, even though it appears that no court has recognized a federal common law claim for interstate pollution damages, such claims were displaced by the CAA. See id.

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marketing conduct, not pollution traveling from one state to

another.

Numerous courts have rejected similar attempts by oil

and gas companies to reframe complaints alleging those companies

knew about the dangers of their products and failed to warn the

public or misled the public about those dangers. The Ninth

Circuit did so in this case. See id. at 1113. And in other

cases alleging similar deceptive promotion and failure to warn

torts, the Fourth Circuit, Tenth Circuit, and the Districts of

Connecticut, Massachusetts, and Minnesota have also rejected

attempts to characterize those claims as being about emissions

and pollution. See Boulder, 25 F.4th at 1264 (Boulder’s claims

“are premised on the Energy Companies’ activities of ‘knowingly

producing, promoting, refining, marketing and selling a

substantial amount of fossil fuels used at levels sufficient to

alter the climate, and misrepresenting the dangers.’”);

Baltimore, 31 F.4th at 217 (“None of Baltimore's claims concern

emission standards, federal regulations about those standards,

or pollution permits. Their Complaint is about Defendants'

fossil-fuel products and extravagant misinformation campaign

that contributed to its injuries.”); Connecticut v. Exxon Mobil

Corp., No. 3:20-CV-1555 (JCH), 2021 WL 2389739, at *13 (D. Conn.

June 2, 2021) (“ExxonMobil’s argument on this issue fails

because the claims Connecticut has chosen to bring in this case

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seek redress for deceptive and unfair practices relating to

ExxonMobil’s interactions with consumers in Connecticut - not

for harms that might result from the manufacture or use of

fossil fuels[.]”); Minnesota v. Am. Petroleum Inst., No. CV 20-

1636 (JRT/HB), 2021 WL 1215656, at *13 (D. Minn. Mar. 31, 2021)

(“[T]he State’s action here is far more modest than the

caricature Defendants present.”); Massachusetts v. Exxon Mobil

Corp., 462 F. Supp. 3d 31, 44 (D. Mass. 2020) (“Contrary to

ExxonMobil’s caricature of the complaint, the Commonwealth’s

allegations do not require any forays into foreign relations or

national energy policy. It alleges only corporate fraud.”).

The source of Plaintiffs’ alleged injury is

Defendants’ alleged failure to warn and deceptive promotion.

See Sunoco LP, 39 F.4th at 1113 (“[t]his case is about whether

oil and gas companies misled the public about dangers from

fossil fuels.”). Even were this court to determine that federal

common law retains preemptive effect after displacement, the

federal common law cited to by Defendants would not preempt

Plaintiffs’ claims in this case. The source of Plaintiffs’

injury is not pollution, nor emissions. Instead, the source of

Plaintiffs’ alleged injury is Defendants’ alleged failure to

warn and deceptive promotion. Therefore, even if federal common

law had not been displaced, Plaintiffs’ claims would not be

preempted by it.

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4. We decline to expand federal common law, and, in any event, Defendants waived such an argument

In their opening brief, Defendants say they “do not

seek to expand federal common law to a new sphere” and instead

“rely on extensive Supreme Court precedent establishing that

federal law already governs in this area.” Defendants have

waived any argument to expand federal common law to cover

Plaintiffs’ claims here. Second, Defendants fail to point to

any case recognizing new federal common law decided after AEP

and Kivalina II displaced the old federal common law that once

governed suits for interstate pollution damages or abatement.

We reiterate that the sources of Plaintiffs’ alleged injury are

Defendants’ alleged tortious marketing and failure to warn.

Defendants also fail to point to any case recognizing federal

common law governing tortious marketing suits.

Even if Defendants had argued federal common law

should be expanded to cover tortious marketing, that argument

would fail because the “cases in which federal courts may engage

in common lawmaking are few and far between.” Rodriguez v.

FDIC, 140 S. Ct. 713, 716 (2020). We see no “uniquely federal

interests” in regulating marketing conduct, an area

traditionally governed by state law. See id. at 717.

We also decline to create new federal common law

governing suits that “involv[e] . . . interstate air pollution.”

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(Emphasis in original.) Congress has enacted a comprehensive

legislative scheme to address interstate air pollution, and

“once Congress addresses a subject, even a subject previously

governed by federal common law, the justification for lawmaking

by the federal courts is greatly diminished.” Nw. Airlines, 451

U.S. at 95 n.34 (emphasis added). “[I]t is primarily the office

of Congress, not the federal courts, to prescribe national

policy in areas of special federal interest.” AEP, 564 U.S. at

423-24. And “[c]ases justifying judicial creation of preemptive

federal rules are extremely limited: [w]hether latent federal

power should be exercised to displace state law is primarily a

decision for Congress, not the federal courts.” In re Nat’l

Sec. Agency Telecomms. Recs. Order Litig., 483 F. Supp. 2d 934,

940 (N.D. Cal. 2007) (quoting Atherton, 519 U.S. at 218)

(quotation marks omitted). “Our commitment to the separation of

powers is too fundamental to continue to rely on federal common

law by judicially decreeing what accords with common sense and

the public weal when Congress has addressed the problem.”

Milwaukee II, 451 U.S. at 315 (internal quotation marks

C. The CAA Does Not Preempt Plaintiffs’ Claims

Having determined that displaced federal common law

plays no part in this court’s preemption analysis, we now turn

to whether the CAA preempts Plaintiffs’ state claims. See

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Boulder, 25 F.4th at 1261 (“As instructed in AEP and supported

by [Kivalina II], we look to the federal act that displaced the

federal common law to determine whether the state claims are

preempted.”). Defendants say that federal law must govern all

suits that “involve[] interstate and international emissions.”

(Emphasis added). They say that a large damage award in effect

could regulate air pollution, 13 and that air pollution is an area

governed exclusively by “federal law.” But the question before

the court is not whether a potential damages award in this case

could regulate air pollution. If that were true, then any case

with a potentially large damage award must be dismissed because

it might regulate a field – the mere possibility of regulation,

standing alone, is not enough to dismiss Plaintiffs’ claims. A

suit does not “regulate” a matter simply because it might have

“an impact” on that matter. Pilot Life Ins. Co. v. Dedeaux, 481

U.S. 41, 50 (1987). Rather, the operative question is whether

Plaintiffs’ state law claims are preempted by federal law. To

prevail, Defendants need to show not only that Plaintiffs’

claims could lead to a large damages award that effectively acts

13 Defendants cite to Kurns v. R.R. Friction Prod. Corp., 565 U.S. 625, 637 (2012), a products liability cases involving a railroad worker exposed to asbestos, to argue that damages awards can effectively act as regulation. This is accurate, but incomplete. The Court did not ask only whether such a large damages award could operate as a regulation. The Court further engaged in a preemption analysis, and asked whether such an award was preempted by federal law. Id. Based on prior precedent, the Court concluded that Congress had occupied the entire field of locomotive equipment regulation and that the worker’s claims were therefore preempted. Id.

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as a regulation, but critically, that such a large damages award

is preempted by federal law. Defendants do not do so.

The doctrine of preemption is rooted in the federal

Constitution’s Supremacy Clause, which provides that federal law

“shall be the supreme Law of the Land; . . . any Thing in the

Constitution or Laws of any state to the Contrary

notwithstanding.” U.S. Const. art. VI, cl. 2. Courts begin

with the presumption that state laws and claims are not

preempted. Wyeth v. Levine, 555 U.S. 555, 565 (2009). This is

because the “historic police powers of the States [are] not to

be superseded . . . unless that was the clear and manifest

purpose of Congress.” Rice v. Santa Fe Elevator Corp., 331 U.S.

218, 230 (1947) (citing Napier v. Atlantic Coast Line R. Co.,

272 U.S. 605, 611 (1926) and Allen-Bradley Local v. Wisconsin

Employment Relations Board, 315 U.S. 740, 749 (1942)). 14

Therefore, when determining whether a statute is preempted

through any preemption doctrine, courts primarily evaluate

whether Congress intended to preempt state law. Id.

14 The Supreme Court has applied this presumption against preemption of historic police powers broadly. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 528-29 (1992) (requiring a showing of congressional intent to supersede state common law duties not to make false statements or conceal facts and holding that Congress expressed no such intent in the Federal Cigarette Labeling and Advertising Act); CTS Corp v. Waldburger, 573 U.S. 1, 19 (2014) (quoting Wos v. E.M.A., 568 U.S. 627, 639-40 (2013)) (“[i]n our federal system, there is no question that States possess the ‘traditional authority to provide tort remedies to their citizens’ as they see fit”).

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There are two types of preemption: complete and

substantive (or ordinary) preemption. City of Hoboken v.

Chevron Corp., 45 F.4th 699, 707 (3d Cir. 2022). Complete

preemption applies only in the context of federal removal

jurisdiction, which is not at issue here. 15 Id. Defendants

argue that the CAA substantively preempts Plaintiffs’ state tort

law claims.

In general, there are three types of substantive

preemption:

(1) express preemption, where Congress has expressly preempted local law; (2) field preemption, “where Congress has legislated so comprehensively that federal law occupies an entire field of regulation and leaves no room for state law”; and (3) conflict preemption, where local law conflicts with federal law such that it is impossible for a party to comply with both or the local law is an obstacle to the achievement of federal objectives.

New York SMSA Ltd. P’ship v. Town of Clarkstown, 612 F.3d 97,

104 (2d Cir. 2010) (emphases added) (citing English v. General

Elec. Co., 496 U.S. 72, 78-79 (1990)).

Defendants do not specify which substantive preemption

theory they rely on. We address each preemption theory in turn.

First, express preemption does not apply. Federal law

expressly preempts state law where the federal statute contains

an express preemption clause barring state law claims in

15 The Supreme Court has only recognized three federal statutes that completely preempt state laws: “ERISA, the National Bank Act, and the Labor- Management Relations Act.” City of Hoboken, 45 F.4th at 707 (citing Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6-8, 10-11 (2003)).

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enumerated areas. Oneok, Inc. v. Learjet, Inc., 575 U.S. 373,

376 (2015) (holding that Congress may “pre-empt . . . a state

law through . . . express language in a statute”). Simply put,

the CAA contains no “express language” preempting state common

law tort claims. See id. Rather, the CAA explicitly preserves

“any right which any person (or class of persons) may have under

any statute or common law to seek enforcement of any emission

standard or limitation or to seek any other relief[.]” 42

U.S.C. § 7604(e) (2018).

Second, field preemption does not apply because the

CAA does not completely occupy the field of emissions. Field

preemption applies where (1) the “scheme of federal regulation

[is] so pervasive as to make reasonable the inference that

Congress left no room for the States to supplement” the

regulation, or (2) the “federal interest is so dominant” in a

field “that the federal system will be assumed to preclude

enforcement of state laws on the same subject.” Rice, 331 U.S.

at 230. Field preemption “reflects a congressional decision to

foreclose any state regulation in the area, even if it is

parallel to federal standards,” so “even complementary state

regulation is impermissible” when Congress has occupied an

entire field. Arizona v. United States, 567 U.S. 387, 401

(2012).

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The CAA simply does not occupy the entire field of

emissions regulation, as noted above. Merrick, 805 F.3d at 694

(holding that CAA does not bar state common law claims against

in-state emitters because “environmental regulation is a field

that the states have traditionally occupied”). “There is no

evidence that Congress intended that all emissions regulation

occur through the [CAA’s] framework, such that any state law

approach to emissions regulation would stand as an obstacle to

Congress’s objectives.” Id. at 695. Indeed, under the CAA,

each state retains regulatory power through their State

Implementation Plan (SIP), which provides for state-level

implementation, maintenance, and enforcement of CAA emissions

standards with federal oversight. 42 U.S.C. § 7410(a)(1)

(2018). While the federal government has primary authority over

emissions legislation, states are responsible for implementation

through their SIP. See id. And the CAA’s “Retention of State

authority” section expressly protects a state’s right to adopt

or enforce any standard or limitation respecting emissions

unless the state policy in question would be less stringent than

the CAA. 42 U.S.C. § 7416 (2018). 16 Congress encouraged states

16 42 U.S.C. § 7416 (2018) provides:

Except as otherwise provided in sections 1857c-10(c), (e), and (f) (as in effect before August 7, 1977), 7543, 7545(c)(4), and 7573 of this title (preempting certain State regulation of moving sources) nothing in this chapter

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to participate through SIPs and provided for state regulation of

any emissions standard or limitation as stringent as or more

stringent than the CAA. See 42 U.S.C. § 7410(a)(1) (2018).

Accordingly, the CAA does not occupy the field of

emissions regulation such that state law is preempted – it does

not “reflect[] a congressional decision to foreclose any state

regulation in the area.” Arizona, 567 U.S. at 401. And, even

if it did, the City’s claims do not seek to regulate emissions,

and so a claim of field preemption in the field of emissions

regulation is inapposite.

Third, conflict preemption does not apply. Conflict

preemption takes two forms. The first form is obstacle

preemption, where state law claims “stand[] as an obstacle to

the accomplishment and execution of the full purposes and

objectives of Congress,” Arizona, 567 U.S. at 399 (quoting Hines

v. Davidowitz, 312 U.S. 52, 67 (1941)). The second form is

impossibility preemption, which is a “demanding defense”, Wyeth,

555 U.S. at 573, that succeeds where state law claims are shown

shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution; except that if an emission standard or limitation is in effect under an applicable implementation plan or under section 7411 or section 7412 of this title, such State or political subdivision may not adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation under such plan or section.

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to directly conflict with federal law or penalize behavior that

federal law requires. AT&T Co. v. Cent. Off. Tel., Inc., 524

U.S. 214, 227 (1998) (holding that federal statute preempts

state law when state law claims directly conflict with federal

law); Geier v. Am. Honda Motor Co., 529 U.S. 864, 873 (2000)

(holding that federal statute preempts state law where state law

penalizes what federal law requires). Neither obstacle

preemption nor impossibility preemption applies here.

1. Obstacle preemption does not apply

The CAA does not preempt Plaintiffs’ claims through

obstacle preemption because their claims arise from Defendants’

alleged failure to warn and deceptive marketing conduct, not

emissions-producing activities regulated by the CAA. Obstacle

preemption applies only where there is an “actual conflict”

between state law and a statute’s overriding federal purpose and

objective. Mary Jo C. v. N.Y. State & Loc. Ret. Sys., 707 F.3d

144, 162 (2d Cir. 2013). “[T]he conflict between state law and

federal policy must be a sharp one.” Marsh v. Rosenbloom, 499

F.3d 165, 178 (2d Cir. 2006) (quotation marks omitted). The

operative federal purpose or policy is defined by “examining the

federal statute as a whole and identifying its purpose and

intended effects,” and “[w]hat is a sufficient obstacle is a

matter of judgment.” Arizona, 567 U.S. at 400 (quoting Crosby,

530 U.S. at 363).

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The U.S. Supreme Court has applied this standard

sparingly, finding obstacle preemption in only two scenarios:

(1) where a federal legislation involved a uniquely federal area

of regulation and state law directly conflicted with the federal

program’s operation, and (2) where Congress has clearly chosen

to preclude state regulation because the federal legislation

struck a delicate balance of interests at risk of disturbance by

state regulation. 17 In re Volkswagen “Clean Diesel” Mktg., Sales

Pracs., & Prod. Liab. Litig., 959 F.3d 1201, 1212 (9th Cir.

2020). But this is a “high threshold.” Chamber of Com. of U.S.

v. Whiting, 563 U.S. 582, 607 (2011).

Here, the CAA’s identified purposes are to protect the

country’s air resources, public health, and welfare; prevent and

control air pollution; and support state, local, and regional

air pollution prevention and control efforts. See 42 U.S.C. §

7401(b) (2018); Bunker Hill Co. Lead & Zinc Smelter v. EPA, 658

F.2d 1280, 1284 (9th Cir. 1981) (“[The CAA] was intended

17 The first category historically includes areas such as foreign affairs powers and regulating maritime vessels. Crosby, 530 U.S. at 373-74 (holding that the federal foreign affairs power is a uniquely federal area of regulation); United States v. Locke, 529 U.S. 89, 97 (2000) (holding that maritime vessel regulation is a uniquely federal area). The second category historically includes criminal immigration penalties, vehicle safety device implementation, and interstate pollution under the Clean Water Act. Arizona, 567 U.S. at 405 (holding that the federal government struck a balance in immigration penalties that would be disturbed by an additional state law criminal penalty); Geier, 529 U.S. at 879-81 (holding that the federal government struck a balance in gradual airbag phase-in that would be undermined by a state law immediate implementation requirement); Int’l Paper Co. v. Ouellette, 479 U.S. 481, 494, 497 (1987) (holding that affected-state claims against out-of-state polluters stand as an obstacle to the balance struck by the Clean Water Act).

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comprehensively to regulate, through guidelines and controls,

the complexities of restraining and curtailing modern day air

pollution.”). The CAA achieves these purposes primarily by

“regulat[ing] pollution-generating emissions from both

stationary sources, such as factories and powerplants, and

moving sources, such as cars, trucks, and aircraft.” Util. Air

Regul. Grp. v. EPA, 573 U.S. 302, 308 (2014).

Plaintiffs’ state tort law claims do not seek to

regulate emissions, and there is thus no “actual conflict”

between Hawaiʻi tort law and the CAA. See Mary Jo, 707 F.3d at

162. These claims potentially regulate marketing conduct while

the CAA regulates pollution. We agree with Plaintiffs that the

trigger liability under Plaintiffs’ Complaint, namely: the use

of deception to promote the consumption of fossil fuel

products.” The CAA expresses no policy preference and does not

even mention marketing regulations.

Defendants argue that the CAA preempts Plaintiffs’

claims because Congress preempted affected-state common law

claims regarding emissions through the CAA, and Plaintiffs’

claims seek to regulate out-of-state emissions. Affected-state

claims are state law actions where the injury occurred in a

different state from the state where the emission was released;

courts have held that the CAA preempts these claims. See Int’l

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Paper Co. v. Ouellette, 479 U.S. 481, 500 (1987). Source-state

claims are state law actions where the injury was suffered in

the same state as the emitting conduct; courts have held that

the CAA does not preempt these claims. See id.

Relying on Ouellette, Defendants say “[e]very federal

court of appeals to consider this issue has recognized that the

CAA does not permit States to use their state tort law to

address harms caused by emissions occurring in other States.”

Defendants are correct, but their analysis is incomplete. In

Ouellette, the Supreme Court examined whether the Clean Water

Act (CWA) preempted “a common-law nuisance suit filed in a

Vermont court under Vermont law, when the source of the alleged

injury [was] located in New York.” Id. at 483. The Supreme

Court held that affected-state common law claims arising from

polluting activity located outside the affected-state are

preempted by the CWA because “[t]he application of affected-

state laws would be incompatible with the [CWA’s] delegation of

authority and its comprehensive regulation of water pollution.”

Id. at 500. Applying affected-state common law could

potentially subject a defendant-polluter to “an indeterminate

number of potential regulations” depending on how far the

emission traveled. 18 Id. at 499; see also Merrick, 805 F.3d at

18 Defendants also cite to N. Carolina, ex rel. Cooper v. Tennessee Valley Auth., 615 F.3d 291, 297 (4th Cir. 2010), arguing that Ouellette’s

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693 (explaining that “claims based on the common law of the

source state . . . are not preempted by the [CAA,]” but “claims

based on the common law of a non-source state . . . are

preempted by the [CAA]”).

But the rationale motivating the Ouellette court in

preempting affected-state common law claims does not apply to

Plaintiffs’ state tort claims. This is because Plaintiffs’

claims require “additional tortious conduct” to succeed. MTBE,

725 F.3d at 104. Here, that additional tortious conduct is

Defendants’ alleged deceptive marketing and failure to warn

about the dangers of using their products – the source of

Plaintiffs’ alleged injury is not emissions but the additional

alleged torts.

In this case, as in MTBE, Defendants’ alleged tortious

conduct is not production of emissions and therefore, obstacle

preemption does not apply. In MTBE, the defendant gasoline

producer used MTBE, a fuel additive that reduced emissions, to

rationale in determining the CWA preempted affected-state common law claims should be applied to the CAA. In Cooper, the Fourth Circuit determined that North Carolina’s nuisance action seeking an injunction against fixed powerplants from emitting sulfur dioxides and nitrous oxides was preempted by the CAA because the “EPA has promulgated [National Ambient Air Quality Standards] for a number of emissions, including standards for all the emissions involved in this case.” Id. at 299. Critically, the CAA, and the agency it empowers (the EPA), had already expressly regulated the very emissions (sulfur dioxides and nitrous oxides) alleged to have caused the nuisance. Id. at 299-303. But the Cooper court refused to “hold flatly that Congress has entirely preempted the field of emissions regulation.” Id. at 302. And it acknowledged that the “Ouellette Court itself explicitly refrained from categorically preempting every nuisance action brought under source state law.” Id. at 303.

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bring its gasoline into compliance with the CAA’s minimum oxygen

content requirement. Id. at 129. The CAA identified a number

of substances, including MTBE, that could have been added to

gasoline to help bring it into compliance with the oxygen

content requirement. Id. at 81. New York City and its agencies

brought ten causes of action, including strict liability failure

to warn, negligence, public nuisance, private nuisance, and

trespass, arguing that the defendant oil producer’s use of MTBE

caused detrimental contamination of groundwater. Id. at 80-83.

The defendant argued that the plaintiff’s tort claims

“conflict[ed] with and are therefore preempted by . . . the

[CAA] Amendments of 1990[.]” Id. at 95.

The Second Circuit held that New York City’s claims

were not preempted under either obstacle or impossibility

preemption. Id. at 97-103. The court held that where a party

participates in a non-polluting emissions-related activity

(i.e., choosing gasoline additives), the fact that it complied

with relevant CAA provisions did not absolve the party of any

state common law or statutory duties to warn of public hazards

or comply with an additional standard of care. Id. at 65. In

short, the Second Circuit determined that state tort law claims

are not preempted by the CAA where the alleged tortious behavior

does not produce emissions. Id. at 104-05.

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Plaintiffs’ claims simply do not risk subjecting

Defendants to “an indeterminate number of potential regulations”

because the claims do not subject Defendants to any additional

emissions regulation at all. See Ouellette, 479 U.S. at 499.

Plaintiffs are correct that where the emissions originate is

irrelevant because emissions are at most a link in the causal

chain connecting Plaintiffs’ alleged injuries and Defendants’

unrelated liability-incurring behavior. [AB at 33, ICA Dkt.

65:43] Simply put, this means obstacle preemption does not

apply.

2. Impossibility preemption does not apply

At its most demanding, the impossibility doctrine

historically required it to be a “physical impossibility” to

comply with both state and federal requirements for federal law

to preempt state law. Florida Lime & Avocado Growers v. Paul,

373 U.S. 132, 143 (1963). 19 The modern impossibility doctrine is

broader and now includes instances where state law penalizes

what federal law requires, Geier, 529 U.S. at 873, or where

state law claims directly conflict with federal law, AT&T Co.,

19 Under the Florida Lime & Avocado Growers standard, some scenarios would yield different results than preemption doctrine’s intended effect: “[f]or example, if federal law gives an individual the right to engage in certain behavior that state law prohibits, the laws would give contradictory commands notwithstanding the fact that an individual could comply with both by electing to refrain from the covered behavior.” Wyeth, 555 U.S. at 590 (2009) (Thomas, J., concurring). In that scenario, it is not a physical impossibility to comply with both requirements, but modern doctrine would find a sufficient conflict between federal and state law to preempt state law through impossibility preemption.

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524 U.S. at 227. But impossibility preemption is still a

“demanding defense.” Wyeth, 555 U.S. at 573. Defendants do not

raise impossibility preemption, and it does not apply

regardless.

MTBE is instructive again. There, the Second Circuit

declined to preempt state tort claims through impossibility

preemption where: (1) it was possible to comply with the CAA and

avoid tort liability; (2) state and federal law did not directly

conflict; and (3) the CAA did not require the alleged conduct.

MBTE, 725 F.3d at 97. The oil producer defendant could have

complied with both state and federal law if it had used other

additives (like ethanol) that did not pose the same health risk

as MTBE but would bring the fuel into CAA oxygen content

compliance without incurring prohibitively high costs. Id. at

99-101. Though the CAA identified MTBE as one additive that

would sufficiently boost oxygen content, at no point did it

require the specific use of MTBE in gasoline – it was one of

many options. Id. at 98.

The same is true here. The CAA does not bar

Defendants from warning consumers about the dangers of using

their fossil fuel products. See id. Defendants could simply

avoid federal and state liability by adhering to the CAA and

separately issuing warnings and refraining from deceptive

conduct as required by Hawaiʻi law; it is not a “physical

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impossibility” to do both concurrently. See Florida Lime &

Avocado Growers, 373 U.S. at 143; State ex rel. Shikada v.

Bristol-Myers Squibb Co., 152 Hawaiʻi 418, 438, 526 P.3d 395, 415

(2023) (rejecting a pharmaceutical company’s argument that

“there was no way [it] could have updated [a drug’s] label to

provide the warning that [state law] require[d] and at the same

time comply with federal law” regarding drug labeling).

V. CONCLUSION

For the foregoing reasons, we hold that Defendants are

subject to specific jurisdiction in Hawaiʻi and that neither

federal common law nor the Clean Air Act preempt Plaintiffs’

claims. We reiterate that federal common law retains no

preemptive effect after it is displaced. Were we to adopt

Defendants’ argument that displaced federal common law preempts

Plaintiffs’ state law claims, Plaintiffs could not recover under

Hawai‘i tort law, even where the state specifically permits

lawsuits to hold companies responsible for allegedly deceptive

marketing claims about any product, including oil and gas

products. We decline to unduly limit Hawai‘i’s ability to use

its police powers to protect its citizens from alleged deceptive

marketing.

Accordingly, the circuit court’s Order Denying

Defendants’ Motion to Dismiss for Failure to State a Claim,

filed March 29, 2022, and Order Denying Defendants’ Joint Motion

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to Dismiss for Lack of Personal Jurisdiction, filed March 31,

2022, are affirmed.

Theodore J. Boutrous, Jr.,* /s/ Mark E. Recktenwald Joshua D. Dick,* Melvyn M. Miyagi, /s/ Sabrina S. McKenna Ross T. Shinyama, Summer H. Kaiawe, /s/ Todd W. Eddins Andrea E. Neuman,* and Erica W. Harris,* /s/ Ronald G. Johnson for appellants Chevron Corporation and Chevron /s/ John M. Tonaki U.S.A., Inc.

C. Michael Heihre, Michi Momose, J. Scott Janoe,* Megan Berge,* and Sterling Marchand,* for appellants Sunoco LP, Aloha Petroleum, Ltd., and Aloha Petroleum LLC

Paul Alston, John-Anderson L. Meyer, Claire Wong Black, Glenn T. Melchinger, Theodore V. Wells, Jr.,* Daniel J. Toal,* and Yahonnes Cleary,* for appellants Exxon Mobil Corporation and ExxonMobil Oil Corporation

Joachim P. Cox, Randall C. Whattoff, David C. Frederick,* James M. Webster III,* and Daniel S. Severson,* for appellants Shell plc (f/k/a Royal Dutch Shell plc), Shell U.S.A. Inc. (f/k/a Shell Oil Company), and Shell Oil Products Company LLC

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Margery S. Bronster, Lanson K. Kupau, Kelly A. Higa Brown, Victor L. Hou,* and Boaz S. Morag,* for appellants Woodside Energy Hawaii Inc. (f/k/a BHP Hawaii Inc.) and appellee BHP Group Limited

Lisa A. Bail, David J. Hoftiezer, Jonathan W. Hughes,* Matthew T. Heartney,* and John D. Lombardo,* for appellants BP plc and BP America Inc.

Ted N. Pettit, Shannon S. Broome,* Shawn Patrick Regan,* and Anne Marie Mortimer,* For appellants Marathon Petroleum Corporation

Crystal K. Rose, Adrian L. Lavarias, Sharon Paris, Jameson R. Jones,* Daniel R. Brody,* Steven M. Bauer,* Margaret A. Tough,* and Katherine A. Rouse,* for appellants ConocoPhillips, ConocoPhillips Company

Crystal K. Rose, Adrian L. Lavarias, Sharon Paris, Steven M. Bauer,* Margaret A. Tough,* and Katherine A. Rouse,* for appellants Phillips 66 and Phillips 66 Company

81 *** FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER ***

Victor M. Sher,* Dana M.O. Viola, Robert M. Kohn, Nicolette Winter, Jeff A. Lau, Matthew K. Edling,* Corrie J. Yackulic,* and Stephanie D. Biehl,* for appellees City and County of Honolulu and Honolulu Board of Water Supply

*pro hac vice

Anne E. Lopez Ewan C. Rayner for amicus curiae Department of Attorney General

Tara A. Buckley for amicus curiae Hawai͑i State Association of Counties

Chase H. Livingston for amicus curiae Legal Scholars

Mark M. Murakami for amicus curiae Chamber of Commerce of the United States of America