City of Chicago v. BP P.L.C.

Opinion

In the

United States Court of Appeals For the Seventh Circuit ____________________ No. 25-1916 CITY OF CHICAGO, Plaintiff-Appellee, v.

BP P.L.C., et al., Defendants-Appellants. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:24-cv-02496 — Franklin U. Valderrama, Judge. ____________________

ARGUED JANUARY 28, 2026 — DECIDED JULY 15, 2026 ____________________

Before HAMILTON, MALDONADO, and TAIBLESON, Circuit Judges. TAIBLESON, Circuit Judge. The City of Chicago has sued ma- jor fossil fuel companies from all over the world, seeking to recover certain damages stemming from global warming. The defendants removed this action from Illinois state court to federal court pursuant to 28 U.S.C. § 1442(a)(1), the federal of- ficer removal statute. The district court remanded, and we af- firm. 2 No. 25-1916

Suits like this one have proliferated all over the country, and many raise difficult and novel legal questions. See, e.g., Suncor Energy (U.S.A.) Inc. v. Cnty. Comm’rs, 146 S. Ct. 1605 (2026) (mem.) (granting certiorari). But this one does not. Chi- cago has defined its claims narrowly: It alleges that the de- fendants misrepresented the effects of fossil fuel emissions on global warming, and it seeks compensation only for harm re- sulting from the increase in fossil fuel consumption attributa- ble to those misrepresentations. The defendants, for their part, invoke federal jurisdiction only on the grounds that this suit relates to their fuel production for the federal government. We conclude that the defendants’ federal work is too attenuated from Chicago’s claims to support removal at this time. I. Background In March of 2024, the City of Chicago sued fourteen energy companies and a related trade association in Illinois state court. These companies (the defendants here) extract fossil fuels, refine them, and sell them to end users, including the federal government. The City’s complaint asserted eleven counts, all arising under state or local law—including products liability for fail- ure to warn, negligence, public and private nuisance, unjust enrichment, consumer fraud for deceptive practices, and mis- representation. In substance, Chicago claims the defendants long understood the climatic effects of burning fossil fuels, but they intentionally concealed and misrepresented those ef- fects and obscured their own roles in causing climate change. As a result of the defendants’ alleged misinformation cam- paign, Chicago claims it suffered a variety of harms, including “heat-related deaths and illness, worse air quality, … in- creased reliance on costly electricity[,] … sewage overflows, No. 25-1916 3

contamination of local waterways, … transit disruptions[,] … shoreline erosion, property damage, and the potential for toxic algae blooms.” Chicago therefore seeks monetary dam- ages from the defendants, but only to the extent that their mis- conduct “led to consumers using more fossil fuels, and using fossil fuels less efficiently, than they otherwise would have.” The defendants removed the suit to the Northern District of Illinois pursuant to the federal officer removal statute, 28 U.S.C. § 1442(a)(1). That statute authorizes a federal officer or “person acting under that officer” to remove suits in state courts “for or relating to any act under color of such office.” Id. To support removal, the defendants pointed to their work over the past century to produce fossil fuels for, or in conjunc- tion with, the federal government. During and after World War II, for instance, some of the defendants’ predecessors provided large amounts of fossil fuels to the military under the direction of federal agencies, including the Petroleum Ad- ministration for War. That production included specialized fuel—for example, some defendants produced high-octane aviation gasoline through the end of the Korean War. The de- fendants’ fossil fuel production for the military continued through the Cold War, including specialized jet fuel for the U- 2 spy plane and the government’s OXCART and SR-71 Black- bird programs. And the U.S. military maintains contracts with some of the defendants for similar fuels through the present day. The defendants emphasized that they also produced oil on behalf of, at the direction of, or by permission of the federal government outside the war context. Between 1944 and 1975, Standard Oil (a predecessor of some defendants) operated the Elk Hills Reserve oil field in California on behalf of and along- 4 No. 25-1916

side the Navy. Some of the defendants have also supplied and managed the federal government’s Strategic Petroleum Re- serve since the 1970s. And various defendants have received federal leases to retrieve oil from the Outer Continental Shelf and federal lands onshore. The defendants argued that Chicago’s suit relates to their federal work because the claimed damages result from the emission of greenhouse gases, which are impossible to parti- tion between governmental and non-governmental sources. The district court disagreed and remanded to state court. II. Discussion We have jurisdiction to review the district court’s remand order under 28 U.S.C. § 1447(d), and we do so de novo. See Bet- zner v. Boeing Co., 910 F.3d 1010, 1013–14, 1013 n.1 (7th Cir. 2018). The federal officer removal statute provides a federal judi- cial forum to the United States government, its officers, and those acting under them for suits related to their federal acts. Specifically, “[t]he United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof” may remove any civil or crim- inal action “for or relating to any act under color of such of- fice.” 28 U.S.C. § 1442(a)(1). The statute’s “‘basic’ purpose” is to protect the federal government from state-court “interfer- ence with its ‘operations.’” Watson v. Philip Morris Cos., 551 U.S. 142, 150 (2007) (quoting Willingham v. Morgan, 395 U.S. 402, 406 (1969)). To establish federal jurisdiction under § 1442(a)(1), the re- moving party must show that (1) it is “the United States, a federal agency, a federal officer, or a person ‘acting under’ a No. 25-1916 5

federal officer”; (2) the suit is “for or relating to any act under color of such office”; and (3) it has “a colorable federal de- fense” to the suit. Chevron USA Inc. v. Plaquemines Par., 608 U.S. ___, ___, 146 S. Ct. 1052, 1057–58 (2026) (citations omit- ted). 1 A. The second requirement—that the suit is “for or relating to any act” performed under color of federal office—is dispos- itive in this case, so we consider it alone. As the Supreme Court has very recently explained, § 1442(a)(1)’s “relating to” language requires a “connection” between the conduct at issue in the suit and the federal duty. Id. at 1060; see also Baker v. Atl. Richfield Co., 962 F.3d 937, 943 (7th Cir. 2020). The connection need not be “strictly caus[al],” Plaquemines, 146 S. Ct. at 1060, and the removing party there- fore need not allege “that the complained-of conduct itself was at the behest of a federal agency,” Baker, 962 F.3d at 944 (quot- ing In re Commonwealth’s Motion to Appoint Couns. Against or Directed to Def. Ass’n of Phila., 790 F.3d 457, 470 (3d Cir. 2015)). But the relationship must be more than “tenuous, remote, or peripheral.” Plaquemines, 146 S. Ct. at 1061 (quoting Rutledge v. Pharm. Care Mgmt. Ass’n, 592 U.S. 80, 94 (2020) (Thomas, J., concurring)). The removal statute does not “reach all suits with any attenuated connection to federal duties.” Id.

1 We have previously broken these elements into four groups, rather

than three. See, e.g., People ex rel. Raoul v. 3M Co., 111 F.4th 846, 848 (7th Cir. 2024). We adopt the Supreme Court’s most recent formulation here, which changes nothing substantively but makes it a bit easier to map our reasoning onto the Court’s. 6 No. 25-1916

The removal statute does not reach this suit as Chicago has pleaded it. For purposes of this appeal, it is undisputed that the defendants have sold fossil fuels to, managed fossil fuels for, and produced fossil fuels at the direction of the federal government over the past century. But their most significant federal work (the World War II- and Korean War-era produc- tion) took place well before the events at issue in this litiga- tion, which allegedly began in the 1970s. The connection be- tween the defendants’ production of fossil fuels to support mid-century war efforts and their alleged false advertising to consumers decades later is “tenuous, remote, or peripheral.” Id.; see, e.g., Connecticut v. Exxon Mobil Corp., 83 F.4th 122, 144 (2d Cir. 2023) (holding defendant’s actions during World War II did not satisfy § 1442(a)(1) because “World War II ended in 1945, and here, the conduct alleged … dates back no earlier than the 1950s”); Anne Arundel Cnty. v. BP P.L.C., 94 F.4th 343, 349–50 (4th Cir. 2024) (rejecting defendants’ “reliance on mil- itary activity in the 1940s and 1950s as a basis for federal of- ficer removal” because “[t]he actions identified in the com- plaint began decades later”); District of Columbia v. Exxon Mo- bil Corp., 89 F.4th 144, 156 (D.C. Cir. 2023) (rejecting a similar theory because there was “no relationship between actions taken by the Companies’ predecessors in the 1940s and 1950s and the allegedly deceptive statements made by the Compa- nies about climate change since 1980”). Even the defendants’ more recent federal work—includ- ing their Cold War-era and current contracts to provide spe- cialized fuels to the military, extraction of resources from gov- ernment land, and supply and management of the Strategic Petroleum Reserve—is simply too attenuated from the con- duct at issue in Chicago’s suit to satisfy the “relating to” re- quirement of § 1442(a)(1). Recall the details of this suit: Chi- No. 25-1916 7

cago’s complaint alleges that the defendants “mounted a dis- information campaign” in order to “deceive[] customers and the public” about “the climate impacts of their products.” As a result, the complaint posits, consumers and the public used more fossil fuels than they otherwise would have, exacerbat- ing climate-related harms, and the City seeks to recover for the resulting increased harm attributable to the increased fuel use. There is no allegation—by the City or by the defend- ants—that these alleged misrepresentations were directed at the federal government or involved the defendants’ federal work, or that the federal government increased its own fuel purchases due to the alleged misrepresentations. The sum the City hopes to recover is thus independent of the defendants’ federal work. Indeed, to make this point dou- bly clear, the complaint expressly “disclaims injuries arising on federal property and those arising from Defendants’ pro- vision of non-commercial, specialized fossil fuel products to the federal government for military and national defense pur- poses. Plaintiff seeks no recovery or relief attributable to these injuries.” While this disclaimer is simply the logical corollary of the City’s theory of liability, it also has a “binding effect” on how the City conducts this litigation. Oral Arg. at 21:44–21:47. As the City itself described, “the disclaimer en- sures that we can’t … change our theory of liability or back out of things down the road in a way that would pose any risk” of implicating the defendants’ federal work. Oral Arg. at 21:47–21:56. 2

2 Whether and how the City will quantify damages under its very lim-

ited theory of liability remains to be seen, of course, because this case is at the pleading stage. The defendants worry that doing so will require dis- tinguishing federal and non-federal sources of greenhouse gas emissions, 8 No. 25-1916

Nor does Chicago’s suit risk “interference” with the fed- eral government’s “operations” in procuring fuel from the de- fendants. Plaquemines, 146 S. Ct. at 1057 (quoting Watson, 551 U.S. at 150). In considering that point, we have found the fol- lowing question analytically helpful: If the conduct chal- lenged in this suit were enjoined, would the defendants’ fed- eral work be compromised? Here, as the defendants acknowl- edged at oral argument, the answer is no. Oral Arg. at 1:45–2:09. If an Illinois state court enjoined the defendants from false advertising about fossil fuels, the defendants’ fed- eral work could continue unimpeded. That is another strong indication that the connection between the conduct at issue in this suit and the defendants’ federal duties is insufficiently close to satisfy § 1442(a)(1)’s “relating to” requirement. B. We do not write on a clean slate. Just the opposite: Every circuit to consider a similar question in these climate-change deception suits has found federal officer removal unwar- ranted. See Rhode Island v. Shell Oil Prods. Co., 35 F.4th 44, 53 n.6 (1st Cir. 2022); Connecticut, 83 F.4th at 142–45; City of Ho- boken v. Chevron Corp., 45 F.4th 699, 712–13 (3d Cir. 2022); Anne

and they argue that such a quantification would need to happen in federal court. See Baker v. Atl. Richfield Co., 962 F.3d 937, 944 (7th Cir. 2020) (hold- ing that differentiating injury between federal and non-federal sources is a “merits question[] that a federal court should decide”). But if that hap- pens, the defendants may try again to remove under § 1442(a) if they have a reasonable and good-faith basis to do so. There is no “absolute one-bite rule” to removal from state courts. Benson v. SI Handling Sys., Inc., 188 F.3d 780, 783 (7th Cir. 1999); see also Railey v. Sunset Food Mart, Inc., 16 F.4th 234, 238 (7th Cir. 2021) (“Removal is not a one-shot proposition. A defendant may remove even a previously remanded case if subsequent pleadings or litigation events reveal a new basis for removal.”). No. 25-1916 9

Arundel Cnty., 94 F.4th at 347–50; Minnesota v. Am. Petroleum Inst., 63 F.4th 703, 714–16 (8th Cir. 2023); Cnty. of San Mateo v. Chevron Corp., 32 F.4th 733, 755–60 (9th Cir. 2022); Bd. of Cnty. Comm’rs. v. Suncor Energy (U.S.A.) Inc., 25 F.4th 1238, 1250–54 (10th Cir. 2022); District of Columbia, 89 F.4th at 155–57. Even more importantly, the Supreme Court recently cited with ap- proval two of our sister circuits’ decisions finding removal in- appropriate under § 1442(a)(1) for many of the same reasons we consider today. Plaquemines, 146 S. Ct. at 1061 (citing Dis- trict of Columbia, 89 F.4th at 156; and Minnesota, 63 F.4th at 715). In both cases, a locality had sued energy companies (in- cluding many of the same defendants present here) for violat- ing local laws against deceptive advertising, and the plaintiffs in both cases sought to recover for the harms caused by the additional fossil fuel burned as a result of the defendants’ de- ception. District of Columbia, 89 F.4th at 148, 156; Minnesota, 63 F.4th at 708. Like us, those federal courts remanded because the “false-advertising suit[s] targeting … oil compan[ies’] statements to consumers about the future effects of fossil fuels on climate change did not relate to” the defendants’ previous federal production. Plaquemines, 146 S. Ct. at 1061 (citations omitted). The defendants claim that our own precedent requires a different result, citing Baker, 962 F.3d 937. We disagree. Baker interpreted § 1442(a)(1)’s “relating to” requirement just like the Supreme Court later did in Plaquemines, expressly adopt- ing a “connection” standard and eschewing a “rigid causa- tion” requirement. Id. at 944. Applying that standard, Baker found removal appropriate for a lawsuit that differs in im- portant ways from this one. The plaintiffs in Baker sought to recover for injuries directly caused by contaminated soil, when at least some of the soil contamination was caused by 10 No. 25-1916

the defendants’ wartime production of materials for the fed- eral government. Id. at 940–41. Here, by contrast, no party contends that the defendants’ alleged misrepresentations caused increased emissions during any work the defendants performed under direction of a federal officer. Nor does the suit necessitate (as of now, at least) the separation of damages due to federal work from damages due to non-federal work. Baker thus does not support removal here. Finally, the parties debate at length whether, under § 1442(a)(1), the defendants’ federal work must relate to the charged tortious conduct specifically, or whether the federal duties may instead relate more broadly to “the lawsuit as a whole”—including aspects of the suit like causation and dam- ages. Both parties cherry-pick language from the Supreme Court’s and our case law that seems to point in their preferred direction. Compare Plaintiff-Appellee Fed. R. App. P. 28(j) Let- ter at 1 (Apr. 24, 2026) (arguing that Plaquemines limits “for or relating to” to the “charged conduct” rather than “the lawsuit as a whole”) (citations omitted), with Defendants-Appellants Response to 28(j) Letter at 1 (May 4, 2026) (arguing that Plaquemines agrees that “federal-officer removal requires courts to consider whether the lawsuit as a whole relates to the defendant’s federally directed conduct”). Those dueling cita- tions are possible because neither the Supreme Court nor our court has answered that question directly. And we see no rea- son to here. Even under the broader formulation favored by the defendants, Chicago’s suit is insufficiently related to the defendants’ federal duties to support removal. *** The district court’s judgment is AFFIRMED.