On Earth Day 2021, the City of New York filed suit against the Exxon Mobil Corporation, ExxonMobil Oil Corporation, Royal Dutch Shell PLC, Shell Oil Company, BP P.L.C, BP America Inc. and the American Petroleum Institute (collectively named “Exxon” in court documents) in the Supreme Court of the State of New York for their deceptive advertising practices under New York State law, violating NYC Code § 20-700. According to the City, Exxon “deceive[d] NYC consumers by misrepresenting the climate impacts of various gasoline products sold at their branded service stations in the City … advertis[ing] them as ‘cleaner’ and ‘emissions-reducing,’ but fail[ed] to disclose their harmful effects on the climate.”
In response, Exxon motioned to remove the case to federal district court, primarily because “the City’s claims necessarily concern transboundary pollution and foreign affairs, and therefore ‘must be brought under federal common law.’” The City then sought to remand to the State Court, and the Court decided to stay the case for approximately two years, awaiting the result of a remand motion in a substantively similar case, Connecticut vs. Exxon Mobil Corp. The verdict decided that removal to federal court often only applies to cases where the initial complaint could have been filed in federal court, including cases that “arise under the laws of the United States” (28 USC § 1331). Therefore, Exxon’s motion for removal in Connecticut was denied.
Upon receiving this information, the City requested that the Court lift the stay on the New York case and make a decision on its motion to remand. The Court complied and lifted the stay, but denied the plaintiff’s motion without prejudice and with leave to refile. This was done as a procedural step to ensure that both parties had an opportunity to re-brief the case. The Court wanted an updated briefing that applied the Circuit’s reasoning in the Connecticut decision before making a final remand ruling. The City refiled and requested attorney costs and fees. This time, the Court granted both motions, denying Exxon’s opposition to the remand.
Thesis
While these proceedings appear to be simple jurisdictional bickering, Exxon’s persistent push for federal removal is a calculated tactical maneuver. By attempting to shift the battlefield, Exxon is not seeking a more appropriate court, but rather a procedural sanctuary where more restrictive evidence rules, broader jury pools, and historically smaller verdicts can be used to dilute the accountability NYC seeks to impose. This strategy effectively seeks to strip the local community (the very people allegedly harmed by these deceptive practices) of the power to adjudicate the case in their own backyard. By leveraging federal removal, Exxon aims to transform a straightforward consumer-protection dispute into a high-level policy debate, thereby shielding itself from the direct accountability of a local jury and the specific protections of New York law.
Legal Argument
Exxon’s contention for removal (and subsequently, opposal to remand) hinges on 6 arguments: (1) that the City’s claims arise under federal common law because they implicate transboundary pollution and foreign affairs, (2) that the action falls under the federal officer removal statute (28 USC § 1442 a(1)), (3) that the defendant’s production and sale of fossil fuels occur on federal enclaves, (4) that the Court has diversity jurisdiction over the action under the fraudulent joinder doctrine, (5) that the action is removable under the Class Action Fairness Act (28 USC § 1332d), (6) and that the City’s claims include federal constitutional elements.
In the Court’s decision to grant remand, they deny all 6 of these arguments as follows: (1) that this is a straightforward false-advertising case, not a federal environmental or foreign-policy issue, (2) that the companies can’t claim they acted for the federal government, since their misleading ads had nothing to do with any federal work, (3) that the case has nothing to do with federal land or federal enclaves, and the argument that ads seen on federal land made it federal was called “the silliest of all arguments,” (4) that Exxon wasn’t fraudulently included to avoid federal court, so diversity jurisdiction doesn’t apply, (5) that this is not a class action, so the companies can’t use class-action law to move the case, and (6) that the claims don’t raise major federal constitutional issues (like the First Amendment) that would justify moving it.
Legal Questions
The defendant’s efforts to remove this case are a part of a broader legal strategy employed by Exxon in many similar cases. The Court notes that “numerous state and local entities sued Exxon … in different state courts under state and local deceptive advertising, nuisance, and other consumer protection laws. In response, Exxon repeatedly removed the cases to federal court ” (emphasis added). It is interesting to note that “Exxon has repeatedly failed in its efforts to remove these cases” – why, then, do they continue to employ this tactic? What does Exxon stand to benefit from removing a state case to federal jurisdiction?
In effect, Exxon wants to argue the case in a forum where it feels it has more control over the narrative. Federal courts have different procedural rules, better developed caselaw, smaller verdicts and judgments, faster resolutions, and more limited voir dire procedures than state courts do. Generally, Federal Courts are more favorable for corporate defendants as they are more predictable, and corporations often have allies within the federal government who may be more inclined to rule in their favor.
For these reasons, removal to the Federal Court is an attractive alternative to litigating in State Court. Federal procedural rules and caselaw are well-known and regular. This creates a certainty regarding expectations and obligations that could be beneficial for the defendant’s attorneys. Federal courts draw from a broader juror pool, meaning that jurors come from a wide range of backgrounds, ideologies, and biases. Federal Civil Procedure requires that “verdict[s] must be unanimous and must be returned by a jury of at least 6 members,” which becomes increasingly difficult when so many diverse individuals are brought together to agree. As such, a compromise verdict is decided, which generally results in smaller verdicts. Smaller verdicts and judgments and faster resolutions usually mean less money paid in damages, fees, and litigation costs. Federal voir dire procedure (the initial questioning of a witness or prospective juror conducted by the court or by counsel) is also more limited, as federal judges are more often in charge of jury selection and investigation, not attorneys. As such, attorneys have less access to the jurors and are less able to vet them directly, as they do in state court. This prevents the plaintiff from conducting an extensive investigation into potential jurors and witnesses, which reduces the potential of uncovering biases and weaknesses. Overall, removal functions as a strategic attempt to relocate the dispute to a forum whose procedural structure and institutional tendencies are more favorable to Exxon’s interests.
Conclusion
What stands out most about this case isn’t the substance of the climate allegation, but the procedural maneuvering that has defined it. Rather than litigating the substance of New York City’s deceptive-advertising claims, Exxon has focused its efforts on repeatedly shifting the forum in which the case is heard, a strategy that has delayed substantive adjudication and kept the dispute in a state of procedural suspension. The Court’s decision here does not resolve the merits; rather, it returns the case to the forum in which it was originally filed. In this sense, the litigation highlights how removal and remand can function not simply as jurisdictional mechanisms but as tools capable of shaping timelines, straining municipal resources, and reframing the trajectory of a case before it ever reaches its core issues.