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# Court to hear argument in case seeking to hold companies liable for damaging Louisiana coast **Source:** [SCOTUSblog](https://www.scotusblog.com/2026/01/court-to-hear-argument-in-case-seeking-to-hold-companies-liable-for-damaging-louisiana-coast/) **Author:** Amy Howe **Published:** 2026-01-07 **Jurisdiction:** Federal - Supreme Court ## Summary - The Supreme Court will decide whether the federal officer removal statute permits the transfer of state‑court environmental litigation against oil and gas companies to federal court in Chevron USA Inc. v. Plaquemines Parish, a ruling that could shape removal jurisdiction for future cases involving federal contractors and state environmental statutes. The outcome will affect both the massive liability exposure of the defendants and the ability of states to enforce coastal‑management laws through their own courts. - The case hinges on interpreting the “federal officer removal statute,” which allows removal of state‑law suits against officers of the United States or persons acting under them; the Court must determine if private oil‑company defendants can be deemed “persons acting under” a federal officer. - A decision favoring removal could open a pathway for other companies engaged in federally‑backed contracts to shift state environmental suits to federal forum, potentially limiting state‑law remedies and affecting litigation strategy. - The underlying state claim is based on Louisiana’s State and Local Coastal Resources Management Act (SLCRMA), which creates a permit scheme and a “grandfather clause” that the plaintiffs argue does not shield pre‑1980 activities lacking prudent industry practices. - The dispute illustrates the interaction between federal removal jurisdiction and state environmental enforcement, raising questions about preemption, abstention, and the balance of federal‑state regulatory authority. - Litigants face high stakes: billions of dollars in potential damages for coastal restoration versus procedural barriers that could dictate the venue and applicable law, making the procedural posture as crucial as the substantive environmental claims. ## Content Court to hear argument in case seeking to hold companies liable for damaging Louisiana coast Updated on Jan. 8 at 5:03 p.m. When the Supreme Court returns to the bench next week for the first argument of 2026, in Chevron USA Inc. v. Plaquemines Parish, Louisiana, it will confront a thorny dispute over the circumstances in which a federal contractor can transfer a case from state to federal court. The question comes to the justices in a high-profile case brought by Louisiana parishes – the equivalent of counties in that state – seeking to hold oil and gas companies liable for damage to the Louisiana coast. A federal appeals court in New Orleans rejected the companies’ latest attempt to move the case to federal court, but now the Supreme Court will weigh in. Litigants on both sides of the dispute tell the justices that the stakes are high, not only because of the amount of money in play, but also because of what the court’s ruling could mean for other companies that do business with the federal government. More than a half-century ago, Congress passed a law that was intended to encourage states to regulate the land and waters on their coasts by promising federal funding for states whose coastal management programs were submitted to, and approved by, the Secretary of Commerce. In 1978, Louisiana adopted the State and Local Coastal Resources Management Act, which took effect in 1980, to opt into this federal program. The law, known as the SLCRMA, requires a permit to “use” the coastal zone, which is defined as “any use or activity within the coastal zone which has a direct and significant impact on coastal waters.” The law allows lawsuits against entities that violate or do not obtain a coastal use permit; it also contains a grandfather clause, which exempts “specific uses legally commenced or established prior to the effective date of the coastal use permit program.” In 2013, a group of Louisiana coastal parishes, along with state officials, filed 42 lawsuits under SLCRMA against oil and gas companies whose predecessors had produced crude oil along the Louisiana coast during World War II. The parishes contended that the companies violated the law by either failing to obtain proper permits or violating the terms of any permits that they did obtain. Moreover, they contended, the companies’ pre-1980 activities were not covered by the grandfather clause because they did not follow prudent industry practices. The parishes sought to have the companies pay damages, including to have the areas where the oil companies were operating restored to their original condition. Earlier efforts to rely on other legal theories to transfer the cases to federal court were unsuccessful. The efforts in the case now before the Supreme Court centers on a federal law known as the “federal officer removal statute.” The law gives federal courts the power to hear state court cases filed against “any officer (or any person acting under that officer) of the United States or of an agency thereof, in an official or individual capacity, for or relating to any act under color of such office.” The companies argued that the case belonged in federal court under the federal officer removal statute because two of Chevron’s predecessors were federal contractors: They had contracts with the federal government during World War II to produce aviation gasoline, known as “avgas,” which (among other things) required them to refine crude oil. The U.S. Court of Appeals for the 5th Circuit agreed with the companies that they were “acting under” a federal officer for purposes of the federal officer removal statute. But the divided three-judge panel concluded that the companies could not meet the law’s final prong, requiring that the case be filed “for or relating to any act under color of such office.” The parishes’ lawsuits, the panel majority wrote, “target Defendants’ oil production and exploration practices.” But there is nothing in the companies’ refinery contracts about oil production, and the federal government’s wartime regulation of crude oil production was “minimal,” the majority concluded. Turning to the refinery contracts themselves, the majority stressed that although the companies were not required to “show that a federal officer directed the specific oil production activities being challenged, they still must show these activities had a sufficient connection with directives in their federal refinery contracts.” The companies cannot meet this requirement, the majority said, “because, as emphasized by the district court, the contracts gave Defendants ‘complete latitude . . . to forego producing any crude and instead to buy it on the open market.’” Judge Andrew Oldham dissented from the panel’s ruling. He pointed to Congress’ 2011 amendment of the federal officer removal statute – which, he said, “broaden[ed] the universe” of cases covered by the statute by making clear that cases could be removed not only if they were filed “for” a federal act but... --- *Legal Topics: civil-procedure, environmental, torts* *Difficulty: beginner* *Via SCOTUSblog*