Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-18-16663/USCOURTS-ca9-18-16663-0/pdf.json

Nature of Suit Code: 240
Nature of Suit: Torts to Land
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CITY OF OAKLAND, a Municipal

Corporation, and The People of

the State of California, acting by

and through the Oakland City

Attorney; CITY AND COUNTY OF

SAN FRANCISCO, a Municipal

Corporation, and The People of

the State of California, acting by

and through the San Francisco

City Attorney Dennis J. Herrera,

Plaintiffs-Appellants,

v.

BP PLC, a public limited

company of England and Wales;

CHEVRON CORPORATION, a

Delaware corporation;

CONOCOPHILLIPS, a Delaware

corporation; EXXON MOBIL

CORPORATION, a New Jersey

corporation; ROYAL DUTCH

SHELL PLC, a public limited

company of England and Wales;

DOES, 1 through 10,

Defendants-Appellees.

No. 18-16663

D.C. Nos.

3:17-cv-06011-WHA

3:17-cv-06012-WHA

OPINION

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2 CITY OF OAKLAND V. BP

Appeal from the United States District Court

for the Northern District of California

William Alsup, District Judge, Presiding

Argued and Submitted February 5, 2020

Pasadena, California

Filed May 26, 2020

Before: Sandra S. Ikuta, Morgan Christen, and

Kenneth K. Lee, Circuit Judges.

Opinion by Judge Ikuta

SUMMARY*

Removal/Subject-Matter Jurisdiction

The panel vacated the district court’s judgment and order

denying defendants’ motion to remand cases to the state court

from which they had been removed on the ground that

plaintiffs’ claim arose under federal law, and remanded for

the district court to consider whether there was an alternative

basis for subject-matter jurisdiction.

The City of Oakland and the City and County of San

Francisco filed complaints in California state court asserting

a California public-nuisance claim against five energy

companies arising from the role of fossil fuel products in

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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CITY OF OAKLAND V. BP 3

global warming. The complaints sought an order of

abatement requiring the energy companies to fund a climate

change adaptation program for the cities. The energy

companies removed the complaints to federal court,

identifying seven grounds for subject-matter jurisdiction,

including that the cities’ public-nuisance claim was governed

by federal common law. The district court denied the cities’

motion to remand the cases to state court, holding that it had

federal-question jurisdiction under 28 U.S.C. § 1331 because

the cities’ claim was “necessarily governed by federal

common law.” The cities amended their complaints to

include a federal nuisance claim. The district court dismissed

for failure to state a claim, and it dismissed four defendants

for lack of personal jurisdiction.

Considering the pleadings filed at the time of removal, the

panel held that the state-law public-nuisance claim did not

arise under federal law for purposes of § 1331. The panel

explained that there is an exception to the well-pleaded

complaint rule for a claim that arises under federal law

because federal law is a necessary element of the claim. This

exception applies when a federal issue is necessarily raised,

actually disputed, substantial, and capable of resolution in

federal court without disrupting the federal-state balance

approved by Congress. The panel concluded that this

exception did not apply because the state-law claim for public

nuisance failed to raise a substantial federal question. A

second exception, referred to as the “artful-pleading

doctrine,” allows removal where federal law completely

preempts a state-law claim. The panel concluded that this

exception did not apply because the state-law claim was not

completely preempted by the Clean Air Act.

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4 CITY OF OAKLAND V. BP

The panel further held that the cities cured any subjectmatter jurisdiction defect by amending their complaints to

assert a claim under federal common law. Thus, at the time

the district court dismissed the cities’ complaints, there was

subject-matter jurisdiction. Nonetheless, the panel held that

it could not affirm the district court’s dismissals if there was

not subject-matter jurisdiction at the time of removal. The

panel concluded that the cities did not waive their argument

in favor of remand by amending their complaints. The panel

also rejected the energy companies’ argument that any

impropriety with respect to removal could be excused by

considerations of finality, efficiency, and economy. The

panel agreed with the Fifth Circuit that a dismissal for failure

to state a claim, unlike a grant of summary judgment or

judgment after trial, is generally insufficient to forestall an

otherwise proper remand.

The panel remanded the cases to the district court to

determine if there was an alternative basis for jurisdiction.

COUNSEL

Michael Rubin (argued), Barbara J. Chisholm, Rebecca

Moryl Lee, and Corinne F. Johnson, Altshuler Berzon LLP,

San Francisco, California; Victor M. Sher and Matthew K.

Edling, Sher Edling LLP, San Francisco, California; Barbara

J. Parker, City Attorney; Maria Bee, Special Counsel; Erin

Bernstein, Supervising Attorney; Malia McPherson, Deputy;

Office of the City Attorney, Oakland, California; Dennis J.

Herrera, City Attorney; Ronald P. Flynn, Chief Deputy;

Yvonne R. Meré, Chief, Complex Litigation; Matthew D.

Goldberg and Robb W. Kapla, Deputies; City Attorney’s

Office, San Francisco, California; for Plaintiffs-Appellants.

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CITY OF OAKLAND V. BP 5

Theodore J. Boutrous, Jr. (argued), Andrea E. Neuman, and

William E. Thomson, Gibson Dunn & Crutcher LLP, Los

Angeles, California; Joshua S. Lipshutz, Gibson Dunn &

Crutcher LLP, San Francisco, California; Neal S. Manne,

Johnny W. Carter, Erica Harris, and Steven Shepard, Susman

Godfrey LLP, Houston, Texas; Herbert J. Stern and Joel M.

Silverstein, Stern & Kilcullen LLC, Florham Park, New

Jersey; for Defendant-Appellee Chevron Corporation.

Kannon K. Shanmugam (argued), Paul Weiss Rifkind

Wharton & Garrison LLP, Washington, D.C.; Theodore V.

Wells Jr., Daniel J. Toal, and Jaren Janghorbani, Paul Weiss

Rifkind Wharton & Garrison LLP, New York, New York;

Jonathan W. Hughes, Arnold & Porter Kaye Scholer LLP,

San Francisco, California; Matthew T. Heartney and John D.

Lombardo, Arnold & Porter Kaye Scholer LLP, Los Angeles,

California; Jameson R. Jones and Sean C. Grimsley, Bartlit

Beck Herman Palenchar & Scott LLP, Denver, Colorado;

Tracie J. Renfroe and Carol M. Wood, King & Spalding LLP,

Houston, Texas; M. Randall Oppenheimer and Dawn Sestito,

O’Melveny & Myers LLP, Los Angeles, California; Daniel

B. Levin, Munger Tolles & Olson LLP, Los Angeles,

California; Jerome C. Roth and Elizabeth A. Kim, Munger

Tolles & Olson LLP, San Francisco, California; David C.

Frederick and Brendan J. Crimmins, Kellogg Hansen Todd

Figel & Frederick P.L.L.C., Washington, D.C.; for

Defendants-AppelleesBPPLC,ConocoPhillips,ExxonMobil

Corporation, and Royal Dutch Shell PLC.

Jonathan Brightbill (argued) and Eric Grant, DeputyAssistant

Attorneys General; R. Justin Smith and Christine W. Ennis,

Trial Attorneys; Environment and Natural Resources

Division, United States Department of Justice, Washington,

D.C.; for Amicus Curiae United States.

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6 CITY OF OAKLAND V. BP

Michael Burger, Morningside Heights Legal Services, Inc.,

New York, New York, for Amici Curiae National League of

Cities, U.S. Conference of Mayors, and International

Municipal Lawyers Association.

Michael R. Lozeau and Richard T. Drury, Lozeau DruryLLP,

Oakland, California, for Amici Curiae Conflict of Laws and

Foreign Relations Law Scholars.

Gerson H. Smoger, Smoger &Associates P.C., Dallas, Texas;

Robert S. Peck, Center for Constitutional Litigation P.C.,

Washington, D.C.; for Amici Curiae Senators Sheldon

Whitehouse,Dianne Feinstein, Richard Blumenthal,MazieK.

Hirono, Edward J. Markey, and Kamala D. Harris.

Seth Davis, Berkeley, California; Ruthanne M. Deutsch and

Hyland Hunt, Deutsch Hunt PLLC, Washington, D.C.; for

Amici Curiae Legal Scholars.

John W. Keker, Matthew Werdegar, and Dan Jackson, Keker

Van Nest & Peters LLP, San Francisco, California; Harold

Hongju Koh and Conor Dwyer Reynolds, Rule of Law Clinic,

Yale Law School, New Haven, Connecticut; for Amici Curiae

Former U.S. Government Officials.

James R. Williams, County Counsel; Greta S. Hansen, Chief

Assistant County Counsel; Laura S. Trice, Lead Deputy

County Counsel; Tony LoPresti, Deputy County Counsel;

Office of County Counsel, County of Santa Clara, San José,

California; for Amicus Curiae California State Association of

Counties.

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CITY OF OAKLAND V. BP 7

Daniel P. Mensher and Alison S. Gaffney, Keller Rohrback

L.L.P., Seattle, Washington, for Amici Curiae Robert Brulle,

Center for Climate Integrity, Justin Farrell, Benjamin Franta,

Stephan Lewandowsky, Naomi Oreskes, Geoffrey Supran,

and Union of Concerned Scientists.

Kenneth L. Adams,AdamsHolcombLLP, Washington, D.C.;

William A. Rossbach, Rossbach Law PC, Missoula,

Montana; for Amici Curiae Mario J. Molina, Michael

Oppenheimer, Bob Kopp, Friederike Otto, Susanne C. Moser,

Donald J. Wuebbles, Gary Griggs, Peter C. Frumhoff, and

Kristina Dahl.

Ian Fein, Natural Resources Defense Council, San Francisco,

California; Peter Huffman, Natural Resources Defense

Council, Washington, D.C.; for Amicus Curiae Natural

Resources Defense Council.

Xavier Becerra, Attorney General; Sally Magnani, Senior

Assistant Attorney General; David A. Zonana, Supervising

Deputy Attorney General; Erin Ganahl and Heather Leslie,

Deputy Attorneys General; Attorney General’s Office,

Sacramento, California; William Tong, Brian E. Frosh, Keith

Ellison, Gurbir S. Grewal, Letitia James, Ellen F. Rosenblum;

Peter F. Neronha, Thomas J. Donovan Jr., Robert W.

Ferguson, and Karl A. Racine, Attorneys General; for Amici

Curiae States of California, Connecticut, Maryland,

Minnesota, New Jersey, New York, Oregon, Rhode Island,

Vermont, and Washington, and the District of Columbia.

Steven P. Lehotsky, Michael B. Schon, and Jonathan D.

Urick, U.S. Chamber Litigation Center, Washington, D.C.;

Peter D. Keisler, C. Frederick Beckner III, Ryan C. Morris,

and Tobias S. Loss-Eaton, Sidley Austin LLP, Washington,

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8 CITY OF OAKLAND V. BP

D.C.; for Amicus Curiae Chamber of Commerce of the

United States of America.

Corbin K. Barthold and Cory L. Andrews, Washington Legal

Foundation, Washington, D.C., for Amicus Curiae

Washington Legal Foundation.

Philip S. Goldberg and Christopher E. Appel, Shook Hardy

& Bacon LLP, Washington, D.C.; Linda E. Kelly and Peter

C. Tolsdorf, Manufacturers’ Center for Legal Action,

Washington, D.C.; for Amicus Curiae National Association

of Manufacturers.

Curtis T. Hill, Jr., Attorney General; Thomas M. Fisher,

Solicitor General; Kian J. Hudson, Deputy Solicitor General;

Julia C. Payne and Robert Rowlett, Deputy Attorneys

General; Office of the Attorney General, Indianapolis,

Indiana; Steve Marshall, Kevin G. Clarkson, Leslie Rutledge,

Christopher M. Carr, Derek Schmidt, Jeff Landry, Eric

Schmitt, Tim Fox, Doug Peterson, Wayne Stenehjem, Dave

Yost, Mike Hunter, Alan Wilson, Ken Paxton, Sean Reyes,

Patrick Morrissey, and Bridget Hill, Attorneys General; for

Amici Curiae States of Indiana, Alabama, Alaska, Arkansas,

Georgia, Kansas, Louisiana, Missouri, Montana, Nebraska,

North Dakota, Ohio, Oklahoma, SouthCarolina, Texas, Utah,

West Virginia, and Wyoming.

Raymond A. Cardozo and David J. de Jesus, Reed Smith

LLP, San Francisco, California; Richard A. Epstein, Chicago,

Illinois; for Amici Curiae Professors Richard A. Epstein,

Jason Scott Johnston, and Henry N. Butler.

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CITY OF OAKLAND V. BP 9

OPINION

IKUTA, Circuit Judge:

Two California cities brought actions in state court

alleging that the defendants’ production and promotion of

fossil fuels is a public nuisance under California law, and the

defendants removed the complaints to federal court. We hold

that the state-law claim for public nuisance does not arise

under federal law for purposes of 28 U.S.C. § 1331, and we

remand to the district court to consider whether there was an

alternative basis for subject-matter jurisdiction.

I

In September 2017, the city attorneys for the City of

Oakland and the City and County of San Francisco filed

complaints in California state court asserting a California

public-nuisance claim against five of the world’s largest

energy companies: BP p.l.c., Chevron Corporation,

ConocoPhillips, Exxon Mobil Corporation, and Royal Dutch

Shell plc.1 The complaints claim that the defendants are

liable for causing or contributing to a public nuisance under

California law. See Cal. Civ. Code §§ 3479, 3480, 3491,

3494; Cal. Civ. Proc. Code § 731. We refer to the plaintiffs

collectively as the “Cities” and to the defendants collectively

as the “Energy Companies.”

1 Under California law, a city attorney may bring an action to abate

a public nuisance “in the name of the people of the State of California,”

Cal. Civ. Proc. Code § 731, and so the complaints were brought in the

name of the people of the State of California, acting by and through the

city attorneys of Oakland and San Francisco.

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10 CITY OF OAKLAND V. BP

According to the complaints, the Energy Companies’

“production and promotion of massive quantities of fossil

fuels” caused or contributed to “global warming-induced sea

level rise,” leading to coastal flooding of low-lying

shorelines, increased shoreline erosion, salt-water impacts on

the Cities’ wastewater treatment systems, and interference

with stormwater infrastructure, among other injuries. The

complaints further allege that the Cities are incurring costs to

abate these harms and expect the injuries will become more

severe over the next 80 years. Accordingly, the Cities seek

an order of abatement requiring the Energy Companies to

fund a “climate change adaptation program” for Oakland and

San Francisco “consisting of the building of sea walls, raising

the elevation of low-lying property and buildings and

building such other infrastructure as is necessary for [the

Cities] to adapt to climate change.”

In October 2017, the Energy Companies removed the

Cities’ complaints to federal court. The Energy Companies

identified seven different grounds for subject-matter

jurisdiction in their notices of removal, including that the

Cities’ public-nuisance claim was governed by federal

common law because the claim implicates “uniquely federal

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CITY OF OAKLAND V. BP 11

interests.”2 After removal, the cases were assigned to the

same district judge, Judge William H. Alsup.3

The Cities moved to remand the cases to state court on the

ground that the district court lacked subject-matter

jurisdiction. The district court denied the motion, concluding

that it had federal-question jurisdiction under 28 U.S.C.

§ 1331 because the Cities’ claim was “necessarily governed

by federal common law.” The district court reasoned that the

Cities’ public-nuisance claim raised issues relating to

“interstate and international disputes implicating the

conflicting rights of States or . . . relations with foreign

nations” and that these issues had to be resolved pursuant to

a uniform federal standard.

In response to the district court’s ruling, the Cities

amended their complaints to include a public-nuisance claim

2 The notice of removal also asserted that the complaints are

removable because the Cities’ claim: (1) raises disputed and substantial

federal issues, see Grable & Sons Metal Prods., Inc v. Darue Eng’g &

Mfg., 545 U.S. 308 (2005); (2) is “completely preempted” by federal law;

(3) arises out of operations on the outer Continental Shelf, see 43 U.S.C.

§ 1349(b); (4) implicates actions that the Energy Companies took

“pursuant to a federal officer’s directions,” see 28 U.S.C. § 1442(a)(1);

(5) arose on “federal enclaves”; and (6) is related to bankruptcy cases, see

28 U.S.C. §§ 1334(b), 1452(a).

3 Other cities and counties in California filed similar cases against the

EnergyCompanies and a number of other energy companies. Those cases

were filed in California state court and removed to federal court, where

they were assigned to Judge Vince G. Chhabria. Judge Chhabria

remanded those cases to state court based on a lack of subject-matter

jurisdiction. See Cty. of San Mateo v. Chevron Corp., 294 F. Supp. 3d

934, 939 (N.D. Cal. 2018). We resolve the appeal from that remand order

in a concurrently filed opinion. See Cty. of San Mateo v. Chevron Corp.,

— F.3d — (9th Cir. 2020).

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12 CITY OF OAKLAND V. BP

under federal common law.4 The amended complaints stated

that the federal claim was added “to conform to the [district

court’s] ruling” and that the Cities “reserve[d] all rights with

respect to whether jurisdiction [is] proper in federal court.” 

The Energy Companies moved to dismiss the amended

complaints.

In June 2018, the district court held that the amended

complaints failed “to state a claim upon which relief can be

granted.” Fed. R. Civ. P. 12(b)(6). The district court first

determined that it would be inappropriate to extend federal

common law to provide relief because “federal courts should

exercise great caution before fashioning federal common law

in areas touching on foreign affairs,” and the Cities’ claims

“implicate[d] the interests of countless governments, both

foreign and domestic.” The district court then dismissed the

state-law claim on the ground that it “must stand or fall under

federal common law.” The district court therefore dismissed

the amended complaints for failure to state a claim. On the

same day, the district court requested a joint statement from

the parties regarding whether it was necessary to reach the

pending motions to dismiss for lack of personal jurisdiction. 

See Fed. R. Civ. P. 12(b)(2). After BP, ConocoPhillips,

Exxon, and Shell requested a ruling on the issue, the district

court ruled that it lacked personal jurisdiction over those

defendants and dismissed them. The district court then

entered judgments in favor of the Energy Companies and

against the Cities.

4 The Cities added the City of Oakland and the City and County of

San Francisco as plaintiffs because federal law, unlike California law,

does not allow a city attorney to bring a public-nuisance action in federal

court in the name of the people of the State of California.

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CITY OF OAKLAND V. BP 13

The Cities appeal the denial of their motions to remand,

the dismissal of their complaints for failure to state a claim,

and the district court’s personal-jurisdiction ruling. We have

jurisdiction under 28 U.S.C. § 1291. We review questions of

statutoryconstruction and subject-matterjurisdiction de novo. 

Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1315 (9th Cir.

1998). “[S]tatutes extending federal jurisdiction . . . are

narrowly construed so as not to reach beyond the limits

intended by Congress.” Phillips v. Osborne, 403 F.2d 826,

828 (9th Cir. 1968).

II

We first consider the Cities’ argument that the district

court erred in determining that it had federal-question

jurisdiction under 28 U.S.C. § 1331. In undertaking this

analysis, we consider only “the pleadings filed at the time of

removal without reference to subsequent amendments.”

Provincial Gov’t of Marinduque v. Placer Dome, Inc.,

582 F.3d 1083, 1085 n.1 (9th Cir. 2009) (citation omitted).

A

Federal-question jurisdiction stems from a congressional

enactment, 28 U.S.C. § 1331, which provides that “[t]he

district courts shall have original jurisdiction of all civil

actions arising under the Constitution, laws, or treaties of the

United States.” The scope of this statutory grant of

jurisdiction is a matter of congressional intent, and the

Supreme Court has determined that Congress conferred “a

more limited power” than the full scope of judicial power

accorded in the Constitution. Merrell Dow Pharm. Inc. v.

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14 CITY OF OAKLAND V. BP

Thompson, 478 U.S. 804, 807 (1986).5 The general rule,

referred to as the “well-pleaded complaint rule,” is that a civil

action arises under federal law for purposes of § 1331 when

a federal question appears on the face of the complaint. 

Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). 

Because federal jurisdiction “depends solely on the plaintiff’s

claims for relief and not on anticipated defenses to those

claims,” ARCO Envtl. Remediation, L.L.C. v. Dep’t of Health

& Envtl. Quality of Mont., 213 F.3d 1108, 1113 (9th Cir.

2000), “a case may not be removed to federal court on the

basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff’s

complaint, and even if both parties concede that the federal

defense is the only question truly at issue,” Caterpillar,

482 U.S. at 393. Therefore, as the “master of the claim,” the

plaintiff can generally“avoid federal jurisdiction byexclusive

reliance on state law.” Id. at 392.

There are a few exceptions to the well-pleaded-complaint

rule, however.

1

First, in a line of cases, beginning with Northern Pacific

Railway Co. v. Soderberg, 188 U.S. 526 (1903), and

extending most recently to Grable & Sons Metal Products,

5 Article III of the Constitution provides that “[t]he judicial Power

shall extend to all Cases, in Law and Equity, arising under this

Constitution, the Laws of the United States, and Treaties made, or which

shall be made, under their Authority.” U.S. Const. art. III, § 2. “[T]he

constitutional meaning of ‘arising under’ may extend to all cases in which

a federal question is ‘an ingredient’ of the action.” Merrell Dow Pharm.,

478 U.S. at 807 (quoting Osborn v. Bank of U.S., 22 U.S. (9 Wheat.) 738,

823 (1824)).

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CITY OF OAKLAND V. BP 15

Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308

(2005), the Supreme Court has recognized a “special and

small category” of state-law claims that arise under federal

law for purposes of § 1331 “because federal law is ‘a

necessary element of the . . . claim for relief.’” Empire

Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 699

(2006) (citation omitted). Only a few cases have fallen into

this “slim category,” id. at 701, including: (1) a series of

quiet-title actions from the early 1900s that involved disputes

as to the interpretation and application of federal law, see

Hopkins v. Walker, 244 U.S. 486, 489 (1917) (federal

jurisdiction was proper because “it [was] plain” that the case

involved “a controversyrespecting the construction and effect

of” federal mining laws); Wilson Cypress Co. v. Pozo,

236 U.S. 635, 642–43 (1915) (federal jurisdiction was proper

because the plaintiffs relied “upon [a] treaty with Spain and

laws of the United States . . . to defeat [the] defendant’s claim

of title”); Soderberg, 188 U.S. at 528 (federal jurisdiction was

proper because the plaintiff’s claim“depend[ed] upon the

proper construction of an act of Congress”); (2) a shareholder

action seeking to enjoin a Missouri corporation from

investing in federal bonds on the ground that the federal act

pursuant to which the bonds were issued was

unconstitutional, see Smith v. Kan. City Title & Tr. Co.,

255 U.S. 180, 201 (1921); and (3) a state-quiet title action

claiming that property had been unlawfully seized by the

Internal Revenue Service (IRS) because the notice of the

seizure did not comply with the Internal Revenue Code, see

Grable, 545 U.S. at 311. In other cases where parties have

sought to invoke federal jurisdiction for state-law claims, the

Court has concluded that jurisdiction was lacking, even when

the claims were premised on violations of federal law, see

Merrell Dow Pharm., 478 U.S. at 805–07; Moore v.

Chesapeake & Ohio Ry. Co., 291 U.S. 205, 210 (1934),

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16 CITY OF OAKLAND V. BP

required remedies “contemplated by a federal statute,”

Empire Healthchoice, 547 U.S. at 690, or required the

interpretation and application of a federal statute in a

hypothetical case underlying a legal malpractice claim, see

Gunn v. Minton, 568 U.S. 251, 259 (2013).

The Court has articulated a test for deciding when this

exception to the well-pleaded-complaint rule applies. As

explained in Grable and later in Gunn, federal jurisdiction

over a state-law claim will lie if a federal issue is

“(1) necessarily raised, (2) actually disputed, (3) substantial,

and (4) capable of resolution in federal court without

disrupting the federal-state balance approved by Congress.” 

Gunn, 568 U.S. at 258 (citing Grable, 545 U.S. at 314). All

four requirements must be met for federal jurisdiction to be

proper. Id.

The Court has often focused on the third requirement, the

question whether a case “turn[s] on substantial questions of

federal law.” Grable, 545 U.S. at 312. This inquiry focuses

on the importance of a federal issue “to the federal system as

a whole.” Gunn, 568 U.S. at 260. An issue has such

importance when it raises substantial questions as to the

interpretation or validity of a federal statute, see Smith,

255 U.S. at 201; Hopkins, 244 U.S. at 489–90, or when it

challenges the functioning of a federal agency or program,

see Grable, 545 U.S. at 315 (holding there was federal

jurisdiction to address an action challenging the IRS’s ability

to satisfy tax delinquencies by seizing and disposing of

property); cf. Bennett v. Sw. Airlines Co., 484 F.3d 907, 911

(7th Cir. 2007) (holding that federal jurisdiction was lacking

because, among other reasons, the plaintiffs did not

“challenge the validity of any federal agency’s or employee’s

action”). Moreover, an issue may qualify as substantial when

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CITY OF OAKLAND V. BP 17

it is a “pure issue of law,” Empire Healthchoice, 547 U.S.

at 700 (citation omitted), that directly draws into question

“the constitutional validity of an act of Congress,” Smith,

255 U.S. at 201, or challenges the actions of a federal agency,

see Grable, 545 U.S. at 310, and a ruling on the issue is “both

dispositive of the case and would be controlling in numerous

other cases,” Empire Healthchoice, 547 U.S. at 700 (citing

Grable, 545 U.S. at 313). By contrast, a federal issue is not

substantial if it is “fact-bound and situation-specific,” see id.

at 701, or raises only a hypothetical question unlikely to

affect interpretations of federal law in the future, see Gunn,

568 U.S. at 261. A federal issue is not substantial merely

because of its novelty, see id. at 262, or because it will further

a uniform interpretation of a federal statute, see Merrell Dow

Pharm., 478 U.S. at 815–16.

2

A second exception to the well-pleaded-complaint rule is

referred to as the “artful-pleading doctrine.” This doctrine

“allows removal where federal law completely preempts a

plaintiff’s state-law claim,” Rivet v. Regions Bank of La.,

522 U.S. 470, 475 (1998), meaning that “the pre-emptive

force of the statute is so ‘extraordinary’ that it ‘converts an

ordinary state common-law complaint into one stating a

federal claim for purposes of the well-pleaded complaint

rule,’” Caterpillar, 482 U.S. at 393 (quoting Metro. Life Ins.

Co. v. Taylor, 481 U.S. 58, 65 (1987)). To have this effect,

a federal statute must “provide[] the exclusive cause of action

for the claim asserted and also set forth procedures and

remedies governing that cause of action.” Beneficial Nat’l

Bank v. Anderson, 539 U.S. 1, 8 (2003).

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18 CITY OF OAKLAND V. BP

The Supreme Court has identified only three statutes that

meet this criteria: (1) § 301 of the Labor Management

Relations Act (the LMRA), 29 U.S.C. § 185, which

“displace[s] entirely any state cause of action ‘for violation of

contracts between an employer and a labor organization,’”

Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Tr.

for S. Cal., 463 U.S. 1, 23 (1983) (citation omitted);

(2) § 502(a) of the Employee Retirement Income SecurityAct

of 1974 (ERISA), 29 U.S.C. § 1132(a), which preempts statelaw claims asserting improper processing of a claim for

benefits under an employee-benefit plan regulation by

ERISA, Metro. Life Ins., 481 U.S. at 65–66; and (3) §§ 85

and 86 of the National Bank Act, 12 U.S.C. §§ 85, 86, which

provide the “exclusive cause of action for usury claims

against national banks,” Beneficial Nat’l Bank, 539 U.S. at 9. 

In light of these cases, we have held that complete

preemption for purposes of federal jurisdiction under § 1331

exists when Congress: (1) intended to displace a state-law

cause of action, and (2) provided a substitute cause of action. 

Hansen v. Grp. Health Coop., 902 F.3d 1051, 1057 (9th Cir.

2018) (citing Beneficial Nat’l Bank, 539 U.S. at 8); accord

Hunter v. United Van Lines, 746 F.2d 635, 642–43 (9th Cir.

1984).

B

We now consider whether the district court erred in

concluding it had jurisdiction over the Cities’ complaints

under § 1331. At the time of removal, each complaint

asserted only a single cause of action for public nuisance

under California law. Under thewell-pleaded-complaint rule,

the district court lacked federal-question jurisdiction unless

one of the two exceptions to the well-pleaded-complaint rule

applies.

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CITY OF OAKLAND V. BP 19

1

We first consider whether the Cities’ state-law claim for

public nuisance falls within the “special and small category”

of state-law claims that arise under federal law. Empire

Healthchoice, 547 U.S. at 699. The gist of the Cities’ claim

is that the Energy Companies’ production and promotion of

fossil fuels has resulted in rising sea levels, causing harm to

the Cities. Under the Court’s test, we must determine

whether, by virtue of this claim, a federal issue is

“(1) necessarily raised, (2) actually disputed, (3) substantial,

and (4) capable of resolution in federal court without

disrupting the federal-state balance approved by Congress.” 

Gunn, 568 U.S. at 258 (citing Grable, 545 U.S. at 314).

Even assuming that the Cities’ allegations could give rise

to a cognizable claim for public nuisance under federal

common law, cf. Am. Elec. Power Co. v. Connecticut

(“AEP”), 564 U.S. 410, 423 (2011), the district court did not

have jurisdiction under § 1331 because the state-law claim for

public nuisance fails to raise a substantial federal question. 

Adjudicating the claim does not require resolution of a

substantial question of federal law: the claim neither requires

an interpretation of a federal statute, cf. Grable, 545 U.S.

at 310; Hopkins, 244 U.S. at 489, nor challenges a federal

statute’s constitutionality, cf. Smith, 255 U.S. at 199. The

Energy Companies also do not identify a legal issue

necessarily raised by the claim that, if decided, will “be

controlling in numerous other cases.” Empire Healthchoice,

547 U.S. at 700 (citing Grable, 545 U.S. at 313). Indeed, 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 that there is a federal common law of

public nuisance relating to interstate pollution, see AEP,

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564 U.S. at 423, and we have held that federal publicnuisance claims aimed at imposing liability on energy

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,” Native Vill. of

Kivalina v. ExxonMobil Corp., 696 F.3d 849, 854 (9th Cir.

2012), are displaced by the Clean Air Act, id. at 858.

Rather than identify a legal issue, the Energy Companies

suggest that the Cities’ state-law claim implicates a variety of

“federal interests,” including energy policy, national security,

and foreign policy.

6 The question whether the Energy

Companies can be held liable for public nuisance based on

production and promotion of the use of fossil fuels and be

required to spend billions of dollars on abatement is no doubt

an important policy question, but it does not raise a

substantial question of federal law for the purpose of

determining whether there is jurisdiction under § 1331. Cf.

Empire Healthchoice, 547 U.S. at 701 (holding that the

federal government’s “overwhelming interest in attracting

able workers to the federal workforce” and “in the health and

welfare of the federal workers upon whom it relies to carry

out its functions” was insufficient to transform a “state-courtinitiated tort litigation” into a “federal case”). Finally,

evaluation of the Cities’ claim that the Energy Companies’

activities amount to a public nuisance would require factual

determinations, and a state-law claim that is “fact-bound and

situation-specific” is not the type of claim for which federalquestion jurisdiction lies. Id.; see also Bennett, 484 F.3d at

910 (holding that federal jurisdiction was lacking when the

6 We do not address whether such interests may give rise to an

affirmative federal defense because such a defense is not grounds for

federal jurisdiction. See, e.g., Caterpillar, 482 U.S. at 393.

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CITY OF OAKLAND V. BP 21

case required “a fact-specific application of rules that come

from both federal and state law rather than a context-free

inquiry into the meaning of a federal law”).

Given that the Cities’ state-law claim does not raise a

substantial federal issue, the claim does not fit within the

“slim category Grable exemplifies,” Empire Healthchoice,

547 U.S. at 701, and we need not consider the remaining

requirements articulated in Grable.

2

The Energy Companies also argue that the Cities’ statelaw claim for public nuisance arises under federal law

because it is completely preempted by the Clean Air Act. 

This argument also fails.

The Clean Air Act is not one of the three statutes that the

Supreme Court has determined has extraordinary preemptive

force. See Ansley v. Ameriquest Mortg. Co., 340 F.3d 858,

862 (9th Cir. 2003). Rather, the Supreme Court has left open

the question whether the Clean Air Act preempts a state-law

nuisance claim under ordinary preemption principles. AEP,

564 U.S. at 429 (“In light of our holding that the Clean Air

Act displaces federal common law, the availability vel non of

a state [nuisance] lawsuit depends, inter alia, on the

preemptive effect of the federal Act.”). Nor does the Clean

Air Act meet either of the two requirements for complete

preemption. See, e.g., Hansen, 902 F.3d at 1057.

First, the statutory language does not indicate that

Congress intended to preempt “every state law cause of

action within the scope” of the Clean Air Act. In re NOS

Commc’ns, MDL No. 1357, 495 F.3d 1052, 1058 (9th Cir.

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22 CITY OF OAKLAND V. BP

2007); see also Beneficial Nat’l Bank, 539 U.S. at 11 (holding

that federal law provides the exclusive cause of action for

usury claims against national banks such that there is “no

such thing as a state-law claim of usury against a national

bank”). Rather, the statute indicates that Congress intended

to preserve state-law causes of action pursuant to a saving

clause, 42 U.S.C. § 7416,7 which “makes clear that states

retain the right to ‘adopt or enforce’ common law standards

that apply to emissions” and preserves “[s]tate common law

standards . . . against preemption,” Merrick v. Diageo Ams.

Supply, Inc., 805 F.3d 685, 690, 691 (6th Cir. 2015) (citation

omitted). When a federal statute has a saving clause of this

sort, Congress did not intend complete preemption, because

“there would be nothing . . . to ‘save’” if Congress intended

to preempt every state cause of action within the scope of the

statute. In re NOS, 495 F.3d at 1058. Moreover, the Clean

Air Act’s statement that “air pollution control at its source is

the primary responsibility of States and local governments,”

42 U.S.C. § 7401(a)(3), weighs against a conclusion that

Congress intended to displace state-law causes of action.

Second, the Clean Air Act does not provide the Cities

with a “substitute[]” cause of action, Hansen, 902 F.3d at

1057, that is, a cause of action that would allow the Cities to

“remedy the wrong [they] assert[] [they] suffered,” Hunter,

7 Section 7416 provides, “Except as otherwise provided in [statutory

exceptions not applicable here] nothing in this chapter 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 no state or local government may “adopt or enforce

any emission standard or limitation which is less stringent than the

standard or limitation” provided for by the Clean Air Act and its

implementing plan. 42 U.S.C. § 7416.

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CITY OF OAKLAND V. BP 23

746 F.2d at 643. While the Clean Air Act allows a plaintiff

to file a petition to seek judicial review of certain actions

taken by the Environmental Protection Agency, 42 U.S.C.

§ 7607(b)(1), it does not provide a federal claim or cause of

action for nuisance caused by global warming. Moreover, the

Clean Air Act’s citizen-suit provision, § 7604, permits actions

for violations of the Clean Air Act, but it does not provide the

Cities with a free-standing cause of action for nuisance that

allows for compensatory damages, see § 7604(a); Mulcahey

v. Columbia Organic Chems. Co., 29 F.3d 148, 150 & n.3

(4th Cir. 1994). Thus, the Clean Air Act satisfies neither

requirement for complete preemption.

***

In sum, because neither exception to the well-pleadedcomplaint rule applies to the Cities’ original complaints, the

district court erred in holding that it had jurisdiction under

28 U.S.C. § 1331 at the time of removal.

III

Although the district court lacked jurisdiction under

28 U.S.C. § 1331 at the time of removal, that does not end

our inquiry. This is because the Cities cured any subjectmatter jurisdiction defect by amending their complaints to

assert a claim under federal common law. See Pegram v.

Herdrich, 530 U.S. 211, 215 n.2 (2000) (holding that there

was “jurisdiction regardless of the correctness of the

removal” because the “amended complaint alleged ERISA

violations, over which the federal courts have jurisdiction”);

Singh v. Am. Honda Fin. Corp., 925 F.3d 1053, 1070 (9th Cir.

2019); Retail Prop. Tr. v. United Bhd. of Carpenters &

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24 CITY OF OAKLAND V. BP

Joiners of Am., 768 F.3d 938, 949 & n.6 (9th Cir. 2014).8

Thus, at the time the district court dismissed the Cities’

complaints, there was subject-matter jurisdiction because the

operative pleadings asserted a claim “arising under” federal

common law. 28 U.S.C. § 1331. Based on this cure, the

Energy Companies raise two arguments as to why we can

affirm the district court’s dismissals, even if there was no

subject-matter jurisdiction at the time of removal.

First, the Energy Companies argue that the Cities waived

the argument that the district court erred in refusing to

remand the cases to state court because the Cities amended

their complaints to assert a claim under federal common law. 

We disagree. The Cities moved for remand and stated, in

their amended complaints, that they included a federal claim

“to conform to the [district court’s] ruling” and that they

“reserve[d] all rights with respect to whether jurisdiction is

proper in federal court.” This was sufficient to preserve the

argument that removal was improper. See Caterpillar Inc. v.

Lewis, 519 U.S. 61, 73–74 (1996); Singh, 925 F.3d at 1066.

Second, the Energy Companies argue that any

impropriety with respect to removal can be excused because

“considerations of finality, efficiency, and economy,” Lewis,

519 U.S. at 75, weigh in favor of affirming the district court’s

dismissal of the Cities’ complaints. Again, we disagree.

Section 1441(a) requires that a case be “fit for federal

adjudication at the time [a] removal petition is filed.” Id.

8 We reject the Cities’ argument that any subject-matter jurisdiction

defect was not cured because they acted involuntarily when they added a

federal claim to their complaints. Once a plaintiff asserts a federal claim,

regardless whether the plaintiff does so under protest, the district court has

subject-matter jurisdiction. Cf. Pegram, 530 U.S. at 215 n.2.

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CITY OF OAKLAND V. BP 25

at 73.

9 Because a party violates § 1441(a) if it removes a case

that is not fit for federal adjudication, a district court

generally must remand the case to state court, even if

subsequent actions conferred subject-matter jurisdiction on

the district court. See, e.g., O’Halloran v. Univ. of Wash.,

856 F.2d 1375, 1380–81 (9th Cir. 1988) (directing a district

court to remand a complaint to state court even though the

plaintiff amended her complaint to assert violations of federal

law after the district court denied a motion to remand).

There is, however, a narrow exception to this rule that

takes into account “considerations of finality, efficiency, and

economy.” Singh, 925 F.3d at 1065 (quoting Grupo Dataflux

v. Atlas Glob. Grp., L.P., 541 U.S. 567, 574 (2004)). 

Specifically, when a jurisdictional defect has been cured after

removal and the case has been tried in federal court, a

violation of § 1441(a) can be excused if remanding the case

to state court would be inconsistent “with the fair and

unprotracted administration of justice.” Id. (quoting Lewis,

519 U.S. at 77).

The decision to excuse a violation of § 1441(a) depends

on the stage of the underlying proceedings. When a case “has

been tried in federal court,” “considerations of finality,

9

 Section 1441(a) provides, in relevant part:

[A]ny civil action brought in a State court of which the

district courts of the United States have original

jurisdiction, may be removed by the defendant or the

defendants, to the district court of the United States for

the district and division embracing the place where

such action is pending.

28 U.S.C. § 1441(a).

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26 CITY OF OAKLAND V. BP

efficiency, and economy become overwhelming,” Lewis,

519 U.S. at 75, and in those circumstances, the Supreme

Court has refused to “wipe out the adjudication

postjudgment” so long as the there was jurisdiction when the

district court entered judgment, id. at 77; see also Grubbs v.

Gen. Elec. Credit Corp., 405 U.S. 699, 702 (1972). For

instance, in Lewis, the Court excused a violation of § 1441(a)

when the case was litigated in federal court for over three

years, culminating in a six-day jury trial. 519 U.S. at 66–67. 

“Requiring [remand] after years of litigation,” the Court

explained, “would impose unnecessary and wasteful burdens

on the parties, judges, and other litigants waiting for judicial

attention.” Id. at 76 (quotingNewman-Green, Inc. v. AlfonzoLarrain, 490 U.S. 826, 836 (1989)). We have extended this

reasoning to cases where the district court resolves “state law

issues on the merits” at summary judgment. Singh, 925 F.3d

at 1071.10 For instance, we excused a violation of § 1441(a)

when, after extensive motion practice and discovery, the

district court granted summary judgment in favor of the

defendants. Id. at 1061–62. We reasoned that the case was

sufficiently analogous to one in which there was a trial on the

merits and therefore held that “[c]onsiderations of finality,

efficiency, and economy” counseled in favor of excusing the

violation of § 1441(a). Id. at 1071 (quoting Lewis, 519 U.S.

at 75).

10 We have held that this rule does not apply when we reverse the

grant of summary judgment, such that there is no longer a “judgment on

the merits.” Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1266

(9th Cir. 1999), superseded by statute on other grounds as recognized in

Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006);

accord Emard v. Hughes Aircraft Co., 153 F.3d 949, 962 (9th Cir. 1998),

abrogated on other grounds by Egelhoff v. Egelhoff ex rel. Breiner,

532 U.S. 141, 146 (2001).

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This reasoning, however, generally will not apply when

a district court dismisses a complaint for failure to state a

claim under Rule 12(b)(6). That rule is designed “to enable

defendants to challenge the legal sufficiency of complaints

without subjecting themselves to discovery,” the cost of

which can be “prohibitive.” Rutman Wine Co. v. E. & J.

Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987). “[T]he

purpose of a motion under Rule 12(b)(6) is to test the formal

sufficiency of . . . [a] claim for relief; the motion is not a

procedure for resolving a contest between the parties about

the facts or the substantive merits of the plaintiff’s case.” 5B

Arthur R. Miller et al., Federal Practice & Procedure § 1356

(3d ed. 2020). In contrast, a motion for summary judgment

is designed to “test whether there is a genuine issue of

material fact” and “often involves the use of pleadings,

depositions, answers to interrogatories, and affidavits.” Id.

Moreover, summary judgment is appropriate only if the

“movant is entitled to judgment as a matter of law,” Fed. R.

Civ. P. 56(a), whereas “the usual course of action upon

granting a defendant’s Rule 12(b)(6) motion is to allow a

plaintiff to amend his or her complaint,” Waste Control

Specialists, LLC v. Envirocare of Tex., Inc., 199 F.3d 781,

786 (5th Cir.), opinion withdrawn and superseded in part on

reh’g, 207 F.3d 225 (5th Cir. 2000).

In light of these differences, we agree with the Fifth

Circuit that a dismissal under Rule 12(b)(6), unlike a grant of

summary judgment, is generally “insufficient to forestall an

otherwise proper remand.” Camsoft Data Sys., Inc. v. S.

Elecs. Supply, Inc., 756 F.3d 327, 338 (5th Cir. 2014). We

have recognized that the “concern for judicial economy” is

slight when a case is pending for under a year, the plaintiff

engages in no discovery, and the district court dismisses the

case “at an early stage, prior to trial on the merits.” Dyer v.

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28 CITY OF OAKLAND V. BP

Greif Bros., 766 F.2d 398, 399, 401 (9th Cir. 1985),

superseded by statute on other grounds as stated in Beeman

v. Olson, 828 F.2d 620, 621 (9th Cir. 1987). A case

consumes a “minimum of judicial resources” if it is pending

for only a few months before it is dismissed under Rule

12(b)(6). Waste Control Specialists, 199 F.3d at 787. 

Likewise, the Sixth Circuit has recognized that “concerns for

judicial economy” are insignificant when dismissal comes “so

early in the pleadings stage that there has been minimal

investment of the parties’ time in discovery or of the court’s

time in judicial proceedings or deliberations.” Chivas Prods.

Ltd. v. Owen, 864 F.2d 1280, 1286–87 (6th Cir. 1988),

abrogated on other grounds by Tafflin v. Levitt, 493 U.S. 455,

461 (1990). In short, “considerations of finality, efficiency,

and economy” are rarely, if ever, “overwhelming” when a

district court dismisses a case at the pleading stage before the

parties have engaged in discovery.

11

In this case, “considerations of finality, efficiency, and

economy” are far from “overwhelming.” Lewis, 519 U.S.

at 75. When the district court entered judgments, the cases

had been on its docket for less than a year—just over eight

months. The parties engaged in motion practice under Rule

12, and there had been no discovery. Although the district

court held hearings and the parties presented a “tutorial” on

global warming, that is a relatively modest use of judicial

11 In Parrino v. FHP, Inc., we held that a defendant’s failure to

comply with a judge-made procedural requirement for removal did not

warrant reversal of a dismissal under Rule 12(b)(6) and “remand of the

matter to state court.” 146 F.3d 699, 703 (9th Cir. 1998), superseded by

statute on other grounds as recognized in Abrego Abrego, 443 F.3d at

681. But Parrino is not applicable when a case is removed in violation of

§ 1441(a), resulting in a “statutory defect” with respect to removal. Grupo

Dataflux, 541 U.S. at 574.

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CITY OF OAKLAND V. BP 29

resources as compared to, for example, three years of

litigation, culminating in a six-day jury trial. See id. at

66–67. Because the district court dismissed these cases at the

pleading stage, after they were pending for less than a year

and before the parties engaged in discovery, we conclude that

“considerations of finality, efficiency, and economy” are not

“overwhelming.” Id. at 75; see Camsoft Data Sys., 756 F.3d

at 338; Waste Control Specialists, 199 F.3d at 786; Dyer,

766 F.2d at 401; Chivas Prods., 864 F.2d at 1286–87. 

Accordingly, if there was not subject-matter jurisdiction at

the time of removal, the cases must proceed in state court.

IV

The district court did not address the alternative bases for

removal asserted in the Energy Companies’ notices of

removal. And we generally do not consider issues “not

passed upon below.” Am. President Lines, Ltd. v. Int’l

Longshore &Warehouse Union, Alaska Longshore Div., Unit

60, 721 F.3d 1147, 1157 (9th Cir. 2013) (quoting Singleton v.

Wulff, 428 U.S. 106, 120 (1976)). Accordingly, we remand

these cases to the district court to determine whether there

was an alternative basis for jurisdiction.12If there was not,

12 The district court requested supplemental briefing on how the

concept of the “‘navigable waters of the United States’ . . . relates to the

removal jurisdiction issue in th[e] case.” As the Cities pointed out,

however, the EnergyCompanies waived anyargument related to admiralty

jurisdiction by not invoking it in their notices of removal. See 28 U.S.C.

§ 1446(a) (notice of removal must “contain[] a short and plain statement

of the grounds for removal”); ARCO, 213 F.3d at 1117 (notice of removal

“cannot be amended to add a separate basis for removal jurisdiction after

the thirty day period” (citation omitted)); O’Halloran, 856 F.2d at 1381

(same). Thus, the district court should confine its analysis to the bases for

jurisdiction asserted in the notices of removal.

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30 CITY OF OAKLAND V. BP

the cases should be remanded to state court.13 This panel will

retain jurisdiction for any subsequent appeals arising from

these cases.

VACATED AND REMANDED.

14

13 We do not reach the question whether the district court lacked

personal jurisdiction over four of the defendants. If, on remand, the

district court determines that the cases must proceed in state court, the

Cities are free to move the district court to vacate its personal-jurisdiction

ruling. Cf. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 587–88

(1999) (stating that in most instances “expedition and sensitivity to state

courts’ coequal stature should impel [a] federal court to dispose of

[subject-matter jurisdiction] issue[s] first”); Cerner Middle E. Ltd. v.

Belbadi Enters. LLC, 939 F.3d 1009, 1014 (9th Cir. 2019) (holding that

the case should be remanded to state court based on a lack of subjectmatter jurisdiction and declining to reach the issue of personal

jurisdiction); Special Invs., Inc. v. Aero Air, Inc., 360 F.3d 989, 994–95

(9th Cir. 2004).

14 Each party shall bear its own costs on appeal.

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