F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

C I T Y O F O A K

L A N D , a Municipal Corporation, and The People of the State of California, acting by and throug h the Oakland City Attorney ; C I T Y A

N D C O U N T Y O F S A N F R A N C I S C O , a Municipal Corporation, and The People of the State of California, acting by and throug h the San F rancisco City Attorney Dennis J . Herrera, Plaintiffs-Appellants
,

v

.

B P PL C, a public limited
company of Eng land and W ales; C H E V R O N C O R P O R A T I O N , a Delaware corporation; C O N O C O P H I L L I P S , a Delaware corporation; E X

X O N M O B I L C O R P O R A T I O N , a New J ersey corporation; R O Y

A L D U T C H S H E L L PL C, a public limited
company of Eng land and W ales; D O E S , 1 throug h 10,

Defendants-Appellees. No. 18-16663

D.C. Nos. 3:17-cv-06011-W HA 3:17-cv-06012-W HA

OPI NI ONC I T Y O F O A K L A N D V

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A ppeal from the United States District Court

for the Northern District of California W illiam Alsup, District J udg e, Presiding

A rg ued and Submitted F ebruary 5, 2020 Pasadena, California

F iled May

26, 2020

B efore: Sandra S. I

k uta, Morg a

n Christen, and Kenneth K. L ee, Circuit J udg es.
Opinion by J udg e I k

uta

SUMMARY *

Rem oval/Subject-Matter Jurisdiction

The p anel v acated the district court’s judg ment and order deny ing defendants’ motion to remand cases to the state court from which they had been r emoved on the gr o u n d that plaintiffs’ claim arose under f ederal law, and remanded for the district c ourt to consider w hether there was an a lternative basis for subject-matter jurisdiction.

The City of Oakland and the City and C o u n t y o f San F rancisco filed complaints in California state court asserting

a California public-nuisance c l a i m ag ainst five energ y companies arising from the role of fossil f u el products in

* T h is su m m ary co n stitu

tes n o p art o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.C I T Y O F O A K L A N D V

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g lobal warming

. T h e complaints soug ht an order o f abatement requiring the energ y companies to fund a clima t e chang e a daptatio n p r o g ram for the cities. The energ y companies re m o v ed the c o mplaints to federal court, identify ing seven g r ounds for subject-matter jurisdic t i o n, including that the cities’ public-nuisance claim was g overned by federal common law. The district court denied the cities’ motion to remand the cases to state court, holding that it h ad federal-question jurisdiction under 28 U .S.C. § 1331 because the cities’ c laim was “necessarily g ov e r ned b y federal

common law.” The cities a m e n ded their complaints to include a f

ederal nuisance claim. The district court dismissed f o r failure to state a claim, and it d ismissed f our def e n d a n t s for lack of personal jurisdiction.

Considering the pleading s filed at the time of removal, the panel held that the state-law public-nuisance cl a i m d id not arise under federal law for purposes of § 1331. The panel

ex p lained that there is an ex ception to t h e well-pleaded complaint r

ule for a claim that arises und e r f e d eral law because federal law is a necessary e lement of the claim. This

ex c e ption applies when a federal i s s u e is necessarily raised, actually disputed, substant i a l, and capable of resolution in federal court without disrupting t h e federal-state balance approved by Cong ress. Th e p a n el concluded that this

ex c e ption did n ot apply because the state-law claim f or public nuisance failed to r a i se a substantial federal question. A second ex ception, referred to as the “artful-pleading doctrine,” a llows removal w here federal law completely preempts a state-law claim. The panel concluded that this

ex c e ption did not apply because the state-law c laim was not completely preempted by the Clean Air Act.C I T Y O F O A K L A N D V

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The panel further h e l d t hat the c ities cured any subjectm a tter jurisdiction defect by amending their complaints t o assert a claim under federal c o m mon law. Thus, at the time the district c ourt dismissed the c ities’ complaints, there was subject-matter jurisdiction. Nonetheless, the panel held that it could not affirm the district court’s d ismissals if there was not subject-matter jurisdiction at the time of r e m oval. The panel concluded that the cities did not wa i v e their arg ument in favor o f remand b y amending their complaints. The panel also rejected the energ y c o mpanies’ arg ument that any im p r opriety with respect to removal could b e ex cused b y considerations of finality
, e fficiency
, and economy

. The panel ag reed with the F ifth Circuit that a dismissal for failure
to state a claim, u n l i k e a g rant of summary judg ment o r judg ment after trial, is g enerally insufficient to f ore s t all an otherwise proper remand.

The panel remanded the c a ses to the district c o u r t to determine if there was an alternative basis for jurisdiction.

COUNSEL

Michael Rubin (arg

ued), B arbara J

. Chisholm, Rebecca Mory l L e e , a n d Corinne F

. J ohnson, Altshuler B e rz on L L P, San F rancis c o, California; Victor M. Sher and Matthew K

. Edling
, Sher E dling L L P, San F rancisco, California; B arbara J

. Parker, City Attorney ; Maria B ee, S p e c ial Counsel; E r in B ernstein, Supervising Attorney ; Malia McPherson, Deputy ; Office of the Ci t y Attorney
, Oakland, California; Dennis J

. Herrera, City Attorney ; Ronald P

. Fly nn, Chief Deputy ; Yvonne R. Meré, Chi ef

, Complex L itig ation; Matthew D

. Goldberg and Robb W

. Kapla, D e puties; City Attorney ’s Office, San F rancisco, California; for Plaintiffs-Appellants.C I T Y O F O A K L A N D V

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Theodore J

. B outrous , J r. (arg ued), A ndrea E. Neuman, a nd W illia m E. Thomson, Gibson D unn & Crutcher L L P, L os Ang eles, California; J o shua S. L ipshutz
, Gi b s o n Dunn & Crutcher L L P, San F ran c i s c o , California; Neal S. Manne, J ohnny W

. Carter, Erica Harris, a nd Steven Shepard, Susman Godfrey L L P, Houston, Tex a s ; H e rbert J

. Stern and J oel M. Silverstein, Stern & Kilcullen L L C, F lorham Park, New J ersey ; for Defendant-Appellee Chevron Corporation.

Kannon K. Shanmug am (arg u ed), Paul W eiss Rif

k ind W h arton & G arrison L L P, W a shing ton, D

. C.; Theodore V

. W e lls J r ., Daniel J

. Toal, and J aren J ang horbani, Paul W eiss Rifkind W harton & Garrison L L P, New York, New Y ork; J onathan W

. Hug hes, Arnold & Porter Kay e Scholer L L P, San F rancisco, California; Matthew T. Heartney and J ohn D

. L ombardo, Arnold & Porter Kay e Scholer L L P, L os Ang eles, California; J ameson R. J ones and Sean C. G ri msley
, B artlit Beck H erman Palenchar & Scott L L P, Denver, Colorado; Tracie J

. Renfroe and Carol M. W ood, King & Spalding L L P, Houston, Tex as; M. Randall Oppenheimer and Dawn Sestito, O’Melveny & My ers L L P, L os Ang eles, California; Daniel B

. L ev i n, Mung er Tolles & Olson L L P, L os Ang eles, Califor n i a ; J erome C. Roth and Eliz abeth A. Kim, Mung er Tolles & Olson L L P, San F rancisco, California; David C. F rederick and B r endan J

. Crimmins, K ellog g Hansen Todd F ig el & F rederick P.L .L .C

. , W ashing ton, D .C.; for Defenda n t s

- A p p e l l e e s B P P L C
, C o n o c o P h i l l i p s , E x x o n M obil Corporation, and Roy al Dutch Shell PL C.

J onathan B rig htbill (arg

ued) and Eric G r a

n t , Deputy Assistant Attorney s General; R. J usti n S m i t h and Christine W

. Ennis, Trial Attorney s; Environment and Natural Resources Division, United States De p a rtment of J ustice, Washing ton, D.C.; for Amicus Curiae United States.C I T Y O F O A K L A N D V

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Michael B urg er, Morn i n gs ide Heig h ts L eg al Services, I n c., New York, New York, for Amici Curiae National L eag ue o f Cities, U .S. Conference of May ors, and I nte r n a tional Municipal L a

wy ers Association.

Michael R. L oz eau and Richard T. Drury
, L oz eau Drury L L P, Oakland, California, for Amici Curiae Conflict of L aws a nd F oreig n Relations L aw Scholars.

Gerson H. Smog er, Smog er & Associates P.C., Dallas, Tex a s; Robert S. Peck, Center for Constitutional L itigation P.C., W a shing ton, D.C.; for Amici Curiae S e n a tors Sheldon Wh i t e h o u s e , D i a

n ne F einstein, Richard B lument h a l
, M a zi e K

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

Seth Davis, B erkeley
, California; Ruthanne M. Deutsch a nd Hy land H unt, Deutsch Hunt PL L C, Wash i n g t on, D.C.; for Amici Curiae L eg al Scholars.

J ohn W

. Keker, Matthew W erdeg ar, and Dan J ackson, Keker Van Nest & Peters L L P, San F rancisco, Califor n i a; Harold Hong ju Koh and Conor Dwy er Rey nolds, Rule of L aw Clinic, Yale L aw School, New Haven, Connecticut; f o r Amici Curiae F ormer U.S. Government Officials.

J ames R. W illiams, County Counsel; Greta S. Hansen, Chief Assistant County Cou nsel; L aura S. Trice, L ead Deputy County Counsel; T ony L oPresti
, Deputy County Counsel; Office of County Counsel, County of Santa Clara, San J o sé, California; for Amicus Curiae California State Association o f Counties.C I T Y O F O A K L A N D V

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Daniel P. Mensher and A lison S. Gaffney
, K e ller Rohrback L .L .P., Seattle, W ashing ton, f or A mici Curiae Robert B rulle, Center for Climate I nteg r ity
, J ustin F arrell, B enjamin F ranta, St e p h an L ewandowsky
, Naomi Oreskes, Geoffrey Supran, and Union of Concerned Scientists.

Kenneth L

. Adams, A d a

m s H o l c o m

b L L P, W ashing ton, D.C.; W illiam A

. Rossbach, Rossbach L aw PC, Missoula, Montana; for Amici Curiae Mario J

. Mo lina, Michael Oppenheimer, B ob Kopp, F riede r i ke Otto, Susanne C. Moser, Do n a l d J

. W uebbles, Gary G rig g s, Peter C. F rumhoff, a nd Kristina Dahl.

I an F ein, N atural Resources Defense Council, San F rancisco, California; Peter H u ffman, Natural Resources Defense Council, W ashing ton, D.C.; for Am i c us Curiae Natural Resources Defense Council.

Xavier B ecerra, Attorney General; Sally Mag nani, Senior Assistant Attorney General; David A. Z onan a , S u pervising Deputy Attorney General; Erin Ganahl and Heat h e r L eslie, Deputy Attorney s General; Attorney General’s Office, Sacramento, California; W illiam Tong
, B rian E. F rosh, Keith Ellison, Gurbir S. Grewal, L etitia J ames, Ellen F

. Rosenblum; Peter F

. Neronha, Thomas J

. D o n o v an J r., Robert W. F erg uson, and Karl A. Racine, Attorney s General; for Amici Curiae States of Californ i a , Connecticut, Mary land, Minnesota, New J ersey , New York, Oreg on, Rhode I sland, Vermont, and W ashing ton, and the District of Columbia.

Ste v e n P. L ehotsky
, Michael B

. Schon, and J onathan D

. Urick, U.S. Chamber L i t i gation Center, W ashing ton, D.C.; P et e r D. Keisler, C. F r e d erick B eckner I I I
, Ry an C. Morris, and Tobias S. L o ss-Eaton, Si d ley Austin L L P, Washing ton,C I T Y O F O A K L A N D V

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D.C.; for Amicus C u r i a e Chamber of Commerce of the United States of America.

Corbin K

. B arthold and Cory L

. Andrews, W a shing ton L eg al F oundation, W ashing ton, D.C., fo r A m icus Curiae W a shing ton L eg al F oundation.

Philip S

. G oldberg and Christopher E. Appel, Shook Hardy & B acon L L P, W a shing ton, D.C.; L inda E. K elly a n d P e t e r C. Tolsdorf, Man u facturers’ Center for L e g al Action, W a shing ton, D.C

. ; for Amicus Curiae N ational Association of Manufacturers.

Curtis T. Hill, J r., Attorney General; Thomas M. F isher, Solicitor General; K ian J

. H udson, Deputy Solicitor General; J ulia C. Pay

ne a n d Robert Rowlett, D e puty Attorney s General; O ffice of the A ttorney G e n e r al, I ndianapolis, I ndiana; Steve Marshall, K evin G. Clarkson, L eslie Rutledg e , C hristopher M. Carr, Derek Schmidt, J eff L andry
, Eric S ch m i tt, Tim F ox , Doug Peterson, W ay ne Stenehjem, Dave Yost, Mike Hunter, A lan W ilson, Ken Pax ton, Sean Rey e s, Patrick Morrissey
, and B ridg et H ill, Attorney s General; for Amici Curiae States of I ndiana, A labama, Alaska, Arkansas, G eorg ia, Kansas, L ouisiana, Missouri, Montana, Nebrask a, North Dakota, Ohio, Oklahoma, Sou t h Carolina, Tex as, U tah, W e st Virg inia, and W y oming

. Ray mon d A

. C ardoz o and David J

. de J esus, Reed Smith L L P, San F rancisco, California; Richard A

. Epstein, Chicag o, I llinois; for Amici Curiae Professors Richard A. E p stein, J ason Scott J ohnston, and Henry N. B utler.C I T Y O F O A K L A N D V

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OP INION

I KUTA, Circuit J udg e:

Two California cities broug ht actions in state court alleg ing that the defendants’ production and promotion o f fossil fuels is a public nuisance under California law, and the defendants removed the complaints to federal court. W e hold that the stat e -l a w c laim for public nuisance d oes not arise under federal law for purposes of 28 U.S.C. § 13 3 1
, a n d we remand to the district court to c onsider whether there was an alternative basis for subject-matter jurisdiction.

I

I n September 2017, the c ity a t t o r n ey s for the City o f Oakland and the City and County of San F rancisco filed complaints in California state c ourt a sserting a California public-nuisance claim ag ainst five of t h e world’s larg e st

en erg y companies: B P p.l.c., Chevron Corporation, ConocoPhillips, Ex x on Mobil Corporation, and Roy a l Dutch Shell plc. 1 The complaints c la i m t h a t the defendants a re liable for causing or cont r i b u ting to a public nuisance under C a l i f o rnia law. See Cal. Civ. Code § § 3479, 3480, 349 1
, 3494; Cal. Civ. Proc. Code § 731. W e refer to the plaintiffs collectively as the “ Cities” and to the d efendants collectively as the “Energ

y Companies.”

1 Un der Calif

o rn ia law
, a city atto rn ey m ay b r i n g a n a c tio n to ab ate

a p u blic n u isan c e “i n t he n am e o f th e p eo p le o f th e State o f Calif o rn ia,” Cal. Civ

. P ro c. C o d e § 7 3 1
, an d so th e co m p lain ts w ere b ro u g h t in th e

n am e o f th e p eo p le o f th e State o f Calif o rn ia, actin g b y a n d t h ro u g h th e city atto rn ey s o f

Oak lan d an d San Fran cisco

.C I T Y O F O A K L A N D V

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According to the complaints, the Energ y Companies’ “production and promo t ion of massive quantities of fossil fuels” caused or contributed to “g lobal warming -induced sea level rise,” leading to coastal f looding of low-ly ing shorelines, increased shoreline erosion, salt-water impacts on the Cities’ wastewater treatment sy stems, and interference with stormwater infrastructure, among other injurie s

. The complaints further alleg e that the Cities a re incurring c osts to abate these harms and ex pect the injuries will become more

severe over the nex t 80 y ears. A c c o r d i n g ly
, the Cities seek

an order of abatement requiring the Energ y Companies to fund a “climate chang e adaptation prog ram” for Oakland a nd San F r ancisco “consisting of the building of sea walls, r aising the eleva tion of low-ly ing property and building s a nd building such other infrastructure a s is necessary for [ the Cities] to adapt to climate chang e.”

I n October 2017, the Energ y Companie s removed the Cities’ complaints to f

ederal court. T h e E nerg y Companies identified s e v en different g rounds for subject-matter jurisdiction in their notices of r emo v a l
, including that the Cities’ public-nuisance clai m was g overned by federal common law because the claim implicates “uniquely federalC I T Y O F O A K L A N D V

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i n terests.” 2 After removal, the cases were assig n ed to t h e same district judg e, J udg e W illiam H. Alsup. 3

The Cities moved to r e mand the cases to state court on the
g round that t h e district court lacked subject-matter jurisdiction. The district court denied the motion, concluding that it h ad federal-questi o n j u r isdiction under 28 U .S.C. § 1331 because the Cities’ claim w as “necessarily go v e r n ed by federal c ommon law.” The district court reasoned that the Cities’ public-nuisance c laim raised issues relating to “interstate and international disputes implic ating the conflicting rig hts of S tates or

. . . r elations with foreig n nations” and that these issues had to be resolved pursuant to a uniform federal standard.

I n response to the distric t c o u rt’s ruling
, the Cities amended their complaints to include a public-nuisance claim

2 T h e n o tice of rem ov al also asserted th at t h e co m plain ts are

rem o v ab le b ecau se th e Cities’ claim : (1 ) raises d isp u ted an d su b stan tial f ed eral issu es, see Gra b le & S o n s Meta l Pro d

s., In c v

. D a r u e E n g ’g & Mfg

. , 5 4 5 U.S. 3 0 8 (2 0 0 5 ); (2 ) is “ co m p letely p reem

p ted ” b y f ed eral law ; (3 ) arises o u t o f o p eratio n s o n th e ou ter Co n tin en tal S h elf
, see 4 3 U.S.C. § 1 3 4 9 (b ); (4 ) i m

p licates actio n s t h a t t he En erg y Co m p an ies t o ok

“ pu rsu an t t o a f

ed eral o f f ic e r’ s d irectio n s,” see 2 8 U.S.C. § 1 4 42 (a)(1 ); (5 ) aro se o n “ f

ed eral en clav es”; an d (6 ) is related to b an k ru p tcy cases, see 2 8 U.S.C. § § 1 3 3 4 (b ), 1 4 5 2(a).

3 Oth er cities an d co u n ties in Calif orn ia f iled sim ilar cases ag ain st th e En erg y Co m

pan ies an d a n

u m b er o f o th er en erg y co m

p an ies. T h o se cases

w ere f iled i n Calif

o rn ia state co u

rt an d rem o v ed to f

ed eral co u rt, w

h ere th ey w ere assig n ed t o J u d g e Vin ce G. Ch h ab ria. J u d g e C h hab ria

rem an d ed th o se cases to state co u rt b ased o n a l ack o f su

b j ect- m atter j u ri s d i c tio n

. S

ee Cty. of S

an Ma teo v. Ch evro n Co rp

. , 2 9 4 F. Su p p

. 3 d 9 3 4
, 9 3 9 (N.D. Cal. 2 0 1 8 ). W e reso l v e th e ap p eal f ro m th at rem an d o rd er in a co n cu rren tly f

iled o p in io n

. S

ee C ty. o f S a n Ma teo v. Ch evro n Co rp

. , — F.3 d — (9 th

Cir. 2 0 2 0).C I T Y O F O A K L A N D V

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under federal common law. 4 The a mended complaints stated that the federal claim was added “to conform to the [ d i strict court’s] ruling ” and that the Cities “reserve[ d] all rig hts with respect to w hether jurisdiction [is] proper in federal court.” The Energ y Companies moved to dismiss the amended complaints.

I n J une 2018, the district court held that the amended complaints failed “to state a claim u p o n w h ich r elief can be
g ranted.” F ed. R. C i v

. P

. 12(b)(6). The district court first determined that it would be inappropriate to ex tend federal

common law to p rovide relief because “federal c ourts should

ex e r cise g r eat c aution before fashioning federal common law in areas touching on foreig n af fairs,” and the Cities’ c laims “implicate[ d] the interests of countless g o v e r nments, both foreig n and domestic.” The district court then dismissed the state-law c laim on the g round that it “must stand or fall under federal c ommon law.” The district court therefore dismissed the amended complaints for failure to state a c l ai m

. O n the

same day
, the district court requested a joint s t atement from the parties r eg arding whether it was n e cessary to r each the pending motions to dismiss f or lack of personal jurisdiction. See F ed. R. Civ. P. 12(b)(2). After B P, ConocoPhil lips, Ex x on, and Shell requested a ruling on the issue, the district
court ruled that it lack e d p e rsonal jurisdiction over those defendants and dismiss ed them. The district court then entered judg ments in favor of the Energ y Companies a nd
ag ainst the Cities.

4 T h e Cities ad d ed th e C i t y o f O ak lan d an d th e C ity an d Co u n ty of San F ran cisco as p lain tif f s b e c au se f

ed eral law
, u n lik e Calif

o rn ia law
, d o es n o t allo w a city atto rn ey to b rin g a p u b lic- n u isan ce actio n in f

ed eral

co u rt in th e n am e o f

th e p eo p le o f

th e State o f

Calif o rn ia.C I T Y O F O A K L A N D V

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The Cities appeal the denial of their mot ions to remand, the dismi s sal o f their complaints for failure to state a c laim, and the district court’s p ersonal-jurisdiction ruling

. W e have jurisdiction under 28 U.S.C. § 1291. W e review questions o f statutory construction and subject-matt e r j u r i s d i c t i o n d e n o v o

. Ritchey v. Upjohn Drug Co

. , 1 39 F .3d 1313, 1315 (9th Cir. 1998). “[ S] tatutes ex tending federal jurisdict i o n

. . . a re narrowly construed so as not to reach bey o n d t h e limits intended b y Cong r ess.” Phillips v. Osborne
, 403 F. 2d 826, 828 (9th Cir. 1968).

I I

W e f irst consider the Ci ties’ arg u ment that the district
court erred in determi n i n g that it had federal-question jurisdiction under 2 8 U.S.C. § 1331

. I n undertaking this analy sis, we consider only “the p leading s filed at the time o f

r emoval without reference to subsequent amendments.” Provincial G o v ’ t of M

arinduque v. Placer Dome, Inc.
, 582 F .3d 1083, 1085 n.1 (9th Cir. 2009) (citation omitted).

A

F ederal-question jurisdiction stems from a cong ressional enactment, 28 U.S

. C

. § 1331, which provides that “[ t] he distr i c t c ourts shall have orig inal jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” The scope of this statutory g rant o f jurisdiction is a matter o f cong ressional intent
, a nd the Supreme Court h as d etermined that Cong ress conferred “a

more limited power” than the full scope of judicia l power accorded in the Constitution. Merrell Dow Pharm. In c

. v

.C I T Y O F O A K L A N D V

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Thompson
, 478 U.S. 8 0 4
, 8 07 (1986). 5 The g eneral rule, referred to as the “well-pleaded complaint rule,” is that a civil action a rises u nder federal law for purposes of § 1331 when

a federal question appears on the face of the comp l a i n t

. Caterpillar Inc. v. W

illiam s , 4 82 U.S. 386, 392 (1987). B ecause federal jurisdiction “depends solely on the plaintiff’s claims for relief and not on anticipated defenses t o those claims,” ARCO Envtl. Remediation, L.L.C. v. Dep’t of Health & Envtl. Q uality of Mont.
, 213 F .3d 1108, 1113 (9th Cir. 2000), “a case may n ot be rem o v ed t o f ederal court on the basis of a federal defense, in c l u d i n g the defense of preem p t ion, even if the defense is a nticipated in the plaintiff’s complaint, a

nd ev e n if both parties concede that the federal defense is the only question truly at issue, ” Ca t erpillar
, 482 U.S. at 393. Therefore, as the “master of the claim,” the
p l a intiff can g enerally “avoid federal jurisdiction by ex clusi v e reliance on state law.” Id. at 392.

There are a few ex c eptions to the well-pleaded-complaint rule, however.

1

F irst, in a line of cases, beg inning with Northern Pacific Railway Co. v. S

oderberg
, 1 8 8 U.S. 526 (1903), a nd

ex te n ding most r ecently to Grable & Sons Metal Products,

5 A rticle III o f th e Co n stitu tio n p r o v i d e s th at “ [t]h e j u d icial P o w er sh a l l e x t e n d to all Cases, in L aw an d Eq u ity
, arisin g u n d er th is Co n stitu tio n , th e L aw s o f th e U n ited States, an d T reaties m ad e, o r w h ich sh a l l b e m ad e, u n d er t

h eir A u th o rity .” U.S. C o n st. art. III, § 2

. “ [T ]h e

co n stitu tio n al m ean i n g o f ‘ arisin g u n d er’ m ay ex ten d to all cases in w h ich

a f ed eral qu estio n is ‘ an in g red ien t’ o f th e actio n .” Merrell D o w Ph a r m. , 4 7 8 U .S. at 8 0 7 (q u o tin g Osb o rn v. Ba nk o f U.S

. , 2 2 U.S. (9 W h eat.) 7 3 8
, 8 2 3 (1 82 4 )).C I T Y O F O A K L A N D V

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Inc. v. D a r ue Engineering & Manufacturing
, 545 U .S. 308 (2005), the S u p reme Court has r ecog niz ed a “special a nd small c a t ego r y ” of state-law claims that arise under federal law for purposes of § 133 1 “ b e c a u se federal law is ‘a necessary element of the

. . . claim for relief.’” E m p ire Healthchoice Assur., Inc. v. McV e i gh
, 547 U.S. 677, 699 (2006) ( citation o m i t ted). Only a few cases have fallen into this “sli m c at e go ry ,” id. at 701, including : (1) a series o f quiet-title a ctions from the early 1 900s that involved disputes

as to the interpretation a nd app l i c ation of f

ederal law, see Hopkins v. W

alker
, 2 44 U.S. 4 86, 489 ( 1917) (federal jurisdiction was proper b e c ause “ it [ was] plain” that the case involved “a controversy respecting the construction and e f f e c t of” feder a l mining laws); W ilson Cypress Co. v. Pozo
, 236 U.S. 6 35, 642–43 (1915) (federal jurisdiction w as proper because the pl aintiffs relied “upon [ a ] treaty with Spain a nd laws of the United States

. . . to defeat [ the] defendant’s claim of title”); Soderberg
, 188 U.S. a t 528 (federal jurisdiction was proper because the plaintiff’s c laim“de pend[ ed] upon the
proper construction of an act of Cong ress”); (2) a shareholder action seeking to enjoin a Missou ri corporation from investing in federal bonds on the ground that the federal act p u r s u a n t t o w h i c h t h e b o n d s w e r e i s s u e d w a s unconstitutional, see Smith v. Kan. City Ti t l e & Tr. Co.
, 255 U.S. 180, 201 ( 1 921); and (3) a state-quiet title action clai m i n g t hat property h ad been unlawfully seiz ed by the I nterna l Revenue Service (I RS) b ecause the notice o f the seiz ure did not comply with th e I nternal Revenue Code, see Grable
, 545 U. S

. a t 311. I n other cases where parties have
soug h t to invoke federal jurisdiction for state-law claims, the Court has concluded that jurisdiction was lacking
, even when the claims were premised o n violations of federal law, see M errell Dow Pharm.
, 478 U.S. at 805–07; Moore v

. Chesapeake & Ohio Ry

. C o

. , 291 U.S. 205, 210 (1934),C I T Y O F O A K L A N D V

. B P 16

required r emedies “contemplat ed by a federal statute,” Empire H

e a l thchoice
, 5 47 U.S. at 690, or r equired the interpretation and application of a federal statute in a hy pothetical case u nderly ing a leg a l malpractice c laim, see Gunn v. Minton , 568 U.S. 251, 259 (2013).

The Court has articulated a test for d e c iding when this

ex c e ption to the well-plead e d-complaint rule applies. A s

ex p lained in Grable and later in G unn , federal jurisdiction

over a state-law claim wil l lie if a federal issue is “(1) necessarily

raised, (2) actually

disputed, (3) substantial, and (4) capable of resolution in federal court without d isrupting the federal-state balance approved by Cong ress.” Gunn
, 568 U.S. at 258 (citing Grable , 545 U.S. at 314). All four re q uirements must be met for federal jurisdiction to be
proper. Id.

The Court has often focused on the third requirement, the question w hether a case “turn[ s] o n substantial questions o f federal law.” Grable
, 5 45 U.S. at 312. This inquiry focuses

on the importance of a federal issue “to the federal sy stem a s

a w hole.” Gunn
, 568 U.S. at 260. An issue h a s s u ch importance when it raises substantial ques t i o ns a s to the interpretation or v alidity o f a f ederal statute, see Smith
, 2 5 5 U. S

. a t 201; Hopkins
, 244 U.S. at 489–90, or when it challeng es the functioning of a federal ag ency or prog ram,

s ee Grable
, 545 U.S. at 315 (holding there was fe d e ra l jurisdiction to address a

n action challeng ing the I RS’s ability
to satisfy ta x delinquencies by seiz ing and disposing o f property ); cf. Bennett v. Sw. Airlines Co. , 484 F .3d 907, 911 (7th Cir. 2007) (holding that federal jurisdiction was lacking b ecause, among other r easons, the plaintiffs d id n o t “challeng e the validity of any federal ag ency ’s or e mploy ee’s action”). Moreover, an issue may qualify as substantial whenC I T Y O F O A K L A N D V

. B P 17

i t i s a “pure issue of law,” E m pire Healthchoice
, 547 U.S

. at 700 (citation omitted), that directly draws into question “the constitutional validity of a n act of Cong ress,” Smith
, 255 U.S. a t 201, or c halleng e s the actions of a federal ag ency , see Grable
, 545 U.S. at 310, and a ruling on the issue is “both dispositive of the case a

nd would be controlling in numerous other cases,” Empire Healthchoice
, 547 U.S. at 7 00 ( c i t i n g Grable
, 545 U.S. at 313). B y contrast , a federal issue is not substantial if it is “fact-bound and situation-specific,” see id.
at 701, or raises only a h y pothetical question u n l i kely to affect inte r

p r e tations of federal law in the future, see G unn , 568 U

. S

. at 261. A federal issue is not substantial merely because of its novelty
, see id. at 262, or because it will f urther

a uniform interpretation of a f ederal statute, see Merrell Dow Pharm.
, 478 U.S. at 815–16.

2

A second ex ception to the well-pleaded-complaint rule is referred to as the “artful-pleading doctrine.” This doctrine “allows removal where f ederal law completely p reempt s a plaintiff’s state-law claim,” R ivet v. Regions Bank of La.
, 522 U .S

. 470, 475 (1998), meaning that “the p re-emptive force of the statut e is so ‘ex traordinary ’ that it ‘converts an ordinary state common-law complaint into one stating a fede r a l 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 thi s effect,

a federal statute must “provide[ ] the e x clusive c ause of action for the c laim as s e r t e d and a lso set forth procedures a nd remedi e s g overning that cause of action.” Beneficial Nat’l Bank v. Anderson , 539 U.S. 1, 8 (2003).C I T Y O F O A K L A N D V

. B P 18

The Supreme Court has identified only three statutes that
meet this criteria: (1) § 301 of th e L abor Manag ement Relatio n s A ct ( the L MRA), 29 U.S.C. § 185, which “displace[ s] entirely any state cause o f action ‘for v iolation o f
contracts b etween an emp loy e r and a labor org aniz ation,’” Franchise Tax Bd. of Cal. v. Constr. Laborers Vacati o n Tr. for S. Cal.
, 463 U

. S

. 1, 23 (1983) (citation omitted); (2) § 502(a) of the Employ ee Retirement I ncome Security A ct of 1 974 (ERI SA), 2 9 U.S.C. § 1132(a), which preempts statelaw claims asserting improper processing of a claim for benefits under an employ ee-benefit p l a n reg ulation b y ERI SA, Metro. Life I

ns. , 481 U. S. at 65–66; and (3) §§ 85 and 86 of the National B a nk Act, 12 U.S.C. §§ 85, 86, which provide the “ex cl u s i v e cause of action for usury c laims
ag ainst national banks,” B eneficial Nat’l Bank
, 539 U.S. at 9. I n lig ht of these c ases, we have held that complete preemption for purposes of federal jurisdiction under § 1331

ex ists when Cong ress: (1) intended to displa c e a s t ate-law

cause of action, and (2) provided a substitute cause o f action. Hansen v. Grp. Health Coop.
, 9 02 F .3d 1051, 1057 (9th Cir. 2018) ( citing Beneficial Nat’l Bank
, 5 3 9 U

. S. a t 8); accord Hunter v. United Van Lines
, 746 F .2d 635, 642–43 (9th Cir. 1984).

B

W e n ow consider whether t he district court erred in concluding it had jurisdiction o ver the Cities’ complaints under § 1 331. At the time of removal, each complaint asserted only a sing le cause o f a c t ion for public nuisance under California law. Under th e w e l l-pleaded-complaint rule, the dist r ict court lacked federal-question jurisdiction unless

one of the two ex ceptions to the well-pleaded-complaint rule applies.C I T Y O F O A K L A N D V

. B P 19

1

W e first consider whether the Cities’ state-law claim for public nuisance f

alls within the “special and small c ateg ory ” of state-law c laims that a r i se under federal law. E m pire Healthchoice , 547 U.S. at 699. The g ist of the Cities’ claim is that the E nerg y Compani es’ production and promotion o f fossil fuels has resulted in rising sea levels, causing harm to the Cities. Under the Court’s t e s t , we must determine whether, by virt u e o f this claim, a federal issue is “(1) necessarily

raised, (2) actually

disputed, (3) substantial, and (4) capable of resolution in federal court without d isrupting the federal-state balance approved by Cong ress.” Gunn
, 568 U.S. at 258 (citing Grable , 545 U.S. at 314).

Even assuming that the Cities’ alleg a tions could g ive r ise
to a c og niz a

ble claim f

or public n u i s ance under federal

common law, cf. A m. El e c

. P o wer Co. v. Connecticut ( “AEP”)
, 564 U.S. 410, 4 23 (2011), the district court did not have jurisdiction under § 1331 b ecause the state-law claim for public nuisance fails to raise a substantial f e deral question. Ad j u d i c a ting the claim does n ot require resolution of a substantial question of f

ederal law: the claim neither requires

an interpretation of a f

e deral statute, cf. Grable
, 545 U.S.
at 310; Hopkins
, 244 U .S. at 489, n o r challeng es a federal
statu t e ’s co nstitutionality
, cf. Smith
, 255 U.S. at 199

. The Energ y Companies also do n o t identify a leg al issue necessarily raised by the clai m that, if decided, will “be controlling in numerous o ther c ases.” Empire H ealthchoice
, 547 U.S. at 700 (citing Grable
, 545 U.S. at 313). I n deed, it is not clear that the claim requires an interpreta t i o n o r application o f federal law a t all, because the Supreme Court has not y et determined that there is a federal common law o f public nuisance relating to interstate pollution, see AEP
,C I T Y O F O A K L A N D V

. B P 20

564 U.S. at 423, and w e have h e l d that federal publicnuisanc e c l a ims aimed at imposing liability on energ y producers for “acting i n co ncert to create, contribute to, a nd maintain g lobal warmin g” and “conspiring to mislead the
p u b lic about the science of g lobal warming ,” Native Vill. o f Kivalina v. ExxonMobil Co r p

. , 696 F .3d 849, 854 (9th Cir. 2012), are displaced by

the Clean Air Act, id. at 858.

Rather than identify a leg al issue, the Energ y Companies
sug g est that the Cities’ state-law c laim implicates a variety o f “federal interests,” including energ y policy
, national security
, and for e i gn policy

. 6 T he question whether the E n erg y Companies can be held liable for p ublic nuisance based on production and promotion of the use of fossi l f u e ls a nd be required to spend billions of dollars o n abatement is no doubt

an important policy questio n , b ut it does not raise a substantial q

uestion o f federal l a w f or the purpose o f determining whether there is jurisdiction under § 13 31. Cf. Empire Healthchoice
, 547 U.S. at 701 (holding t h a t the federal g o vernment’s “overwhelming inte re st in attracting able workers to the federal workforce” and “in the health a nd welfare of the federal workers up o n w h o m it relies to carry out its functions” was insufficient to transform a “state-courtinitiated tort litig a t i o n ” into a “federal case”). F inally
, evaluation o f the Cities’ claim t h a t the Energ y Companies’ activities a m o u n t to a p ublic nuisance would require f actual determinations, and a state-law claim that is “fact-bound a nd situation-specific” is not the ty pe o f c laim for which federalquestion jurisdiction lies. I d

. ; s e e also Bennett
, 484 F .3d at 910 (hold i n g that federal jurisdiction was lacking when the

6 W e d o n o t ad d ress w

h eth er su ch in terests m ay g iv e rise to an af f irm ativ e f

ed eral d ef

en se b ecau s e su ch a d ef en se is n ot g ro u n d s f

or f ed eral j u risd i ctio n

. S

ee, e.g

. , C

a terp illa r , 4 8 2 U.S. at 3 9 3

.C I T Y O F O A K L A N D V

. B P 21

c a s e required “a fact-specific application of rules that co m e from both federal a

n d state law r ather than a c ontex t-free inquiry into the meaning of a federal law”).

Given that the Cities’ state-law claim does not r a ise a substantial federal issue, the c laim does not fit wi t h i n t he “sl i m categ ory Grable ex emplifies,” E m pire H ealthchoice
, 547 U .S. at 701, a

nd we need not consider t h e remaining requirements articulated in Grable

.

2

The Energ y C ompanies also arg ue that the Cities’ statelaw claim f

o r p u blic nuisance arises under federal law because it is completely pr e e m pted b y the Clean Air Act. This arg ument also fails.

The Clean Air Act is not one of the three statutes that the Supreme Court has determined has ex traordinary preemptive force. See A nsley v. Ameriquest Mortg

. C o

. , 340 F .3d 858, 862 ( 9th Cir. 2003). Rather, the Supreme Court has left open the question whether the Clean A ir A ct preempts a state-law nuisance claim under ordinary preem p t ion principles. AEP
, 564 U.S. at 429 (“I n l i g ht of our holding that the Clean Air Act displaces federal common law, the availability v el non o f

a state [ nuisance] lawsuit depends, inter a l ia
, on the preemptive effect of the federal Act.”). Nor does the Clean Air Act me et either of the two requirements f or complete preemption. See, e.g.
, Hansen , 902 F .3d at 1057.

F irst, the statutory lang u ag e d oes not i n d icate that Cong r ess intended to preempt “ e v ery state law cause o f action within the scope” of the Clean A ir Act. In r e N OS Commc’ns, MDL No. 1357
, 495 F

. 3 d 1052, 1058 (9th Cir.C I T Y O F O A K L A N D V

. B P 22

2007); see also Beneficial Nat’l Bank
, 539 U.S. at 11 (holding that federal law provides the ex cl u s i v e cause of action for

u s u ry claims ag ainst n ational banks such that there is “ n o such thing as a state-law cl a i m of u sury ag ainst a n ational bank”). Rather, the statute i n dicates that Cong ress intended
to preserve state-law c a u s e s o f action pursuant to a saving clause, 42 U.S.C. § 7416, 7 w hich “makes clear that states retain the rig ht to ‘adopt or enforce’ common law standards that a pply to emissions” a

n d preserves “[ s] tate common law standards

. . . ag ainst preempti on,” Merrick v. Diageo Ams. Supply, Inc.
, 805 F .3d 685, 690, 691 (6th Cir. 2015) (citation omitted). W hen a federal statute h as a sa v i n g clause of this sort, Cong ress did not intend c omplete preemp t i o n , because “there would b e nothing

. . . t o ‘ save’” if Cong ress intended
to preempt e very state cause of action w ithin the scope of the

s t atute. In re NOS
, 495 F .3d at 1058. Moreover, t h e C l e a n Air Act’s statement that “air pollution control at its source is the primary responsibility of States and local g overnments,” 42 U .S.C. § 7401(a)(3), w eig hs ag ainst a conclusion that Cong r ess intended to displace state-law causes of action.

Second, the Clean Air Act do e s n ot provide the Cities with a “substitute[ ]” cause of action, H ansen , 902 F .3d at 1057, that is, a cause of a ction that would allow the Cities to “remedy the w rong [ they ] assert[ ] [ they ] suffered,” H unter ,

7 Sectio n 7 4 1 6 pro v id es, “ Ex cep t as o th erw ise p ro v id ed in [statu to ry

e x cep t io n s n ot ap p licab le h ere] n oth i n g in th i s ch ap ter sh all p reclu d e o r d en y t h e ri g h t o f an y State o r po l itical s u bd i v isio n th ereo f to ad o p t or

en f o rce (1 ) an y stan d ar d o r l im itatio n resp ectin g em issio n s o f air
p o llu tan ts o r (2 ) an y req u irem en t resp ectin g co n tro l o r ab a t em en t o f air
p o llu tio n ,” ex cep t th at n o state o r lo cal g o v ern m en t m ay “ ad o p t o r en f orce

an y em issio n stan d ard o r lim i tati o n w h ich is less strin g en t th an th e stan d ard or lim itati o n ” p r o v id ed f o r b y th e Clean A ir A ct an d its im p lem en tin g p lan . 4 2 U.S.C. § 7 4 1 6

.C I T Y O F O A K L A N D V

. B P 23

746 F .2d at 643. W h i l e the Clean Air Act allows a p laintiff
to file a p etition to seek judicial review of certa i n a c tions taken by the Environmental Protection Ag ency , 4 2 U .S.C. § 7607(b)(1), it does not provide a f e d e r a l claim or cause o f action for nuisance caused by g lobal warming

. Moreover, the Clean Air Act’s citiz en-suit p r o v i s i on, § 7604, permits actions for violations of the Clean A ir A ct, but it does not provide the Cities wi t h a free-standing cause o f action for nuisance that allows fo r compensatory d a mag es, see § 7604(a); Mulcahey

v. Columbia Organic Chems. Co.
, 2 9 F .3 d 148, 150 & n.3 (4th Ci r

. 1994). Thus, the Clean Air A ct satisfies neither requirement for complete preemption.

***

I n sum, because neither ex c e ption to the well-pleadedcomplaint rule applies to the Cities’ orig inal complaints, the district court erred in holding that it had jurisdiction under 28 U.S.C. § 1331 at the time of removal.

I I I

Althoug h the district court lacked ju risdiction under 28 U.S.C. § 1331 at the time of r e m o v a l
, that does not e nd

our inquiry

. This is be cause the Cities cured any subjectmatter jurisdiction defect by am e n d ing their complaints to assert a claim under federa l common law. S ee P egram v

. Herdrich
, 530 U.S. 2 11, 215 n

. 2 ( 2 0 0 0 ) (holding that there

was “juri sdiction reg ardless of the correctness of the removal” because the “amended complaint alleg e d E R I SA 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 &C I T Y O F O A K L A N D V

. B P 24

Joiners of A m. , 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 b e cause the
op erative p leading s asserted a claim “ arising under” federal

common law. 28 U.S.C. § 13 3 1

. Ba s e d on this cure, the Energ y Companies raise two arg uments as to w h y we can affirm the district court’s dismissals, even if there was no subject-matter jurisdiction at the time of removal.

F irst, the Energ y Companies arg ue that the Cities waived the arg ument that the district court erred in refusing to remand the cases to state court because the Ci t ies amended their complaints to assert a claim under f ederal common law. W e disag ree. The Cities m o v e d f o r remand and stated, in their amended complaints, that they included a federal claim “to conform to the [ district c ourt’s] ruling ” and t h a t they “reserve[ d] all righ ts with respect to w hether jurisdiction is
proper in f

e d e ral court.” This was sufficient to preserve the
arg ument that removal was improper. See Caterpillar Inc. v

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

Second, the Energ y Companies arg ue that any impropriety

with respect to removal can be ex cused because “considerations of finality
, efficiency
, and economy ,” Lewis
, 519 U.S. a t 75, weig h in f

avor of a f firming the district court’s dismissal of the Cities’ complaints. Ag ain, we disag ree.

Section 14 4 1(a) requires that a case be “fit for federal adjudication at the time [ a ] removal petition is filed.” Id.

8 W e rej ect th e Cities’ arg u m en t th at an y su b j ect- m atter j u risd ictio n d ef ect w as n o t cu red b ecau se t h ey acted i n v o lu n tarily w h en th ey ad d ed a f ed eral claim to th eir co m

p lain ts. On ce a p lain tif

f asserts a f

ed eral claim
, reg ard less w

h eth er th e p lain tif

f d o es so u n d er p ro test, th e d istrict co u rt h as

su b j ect- m atter j u risd ictio n

. Cf. Peg ra m , 5 3 0 U.S. at 2 1 5 n .2

.C I T Y O F O A K L A N D V

. B P 25

at 7 3

. 9 B ecause a party violates § 1441(a) if it removes a case t h a t is not f

it for federal adjudication, a district cou r t g enerally must remand the case to state cou rt, even if subsequent actions conferred subject-matter jurisdiction on the district court. See, e.g. , O’Halloran v. Univ. of W ash.
, 856 F .2d 1375, 1380–81 (9th Cir. 1988) (directing a d i s t rict
court to remand a complaint to state court even tho ug h the plaintiff a mended h e r complaint to assert violations of federal law after the district court denied a motion to remand).

There is, however, a narrow ex ception to this rule that takes into account “considerations of finality
, efficiency
, a nd
economy .” Singh
, 925 F

. 3d a t 1065 (quoting Grupo Dataflux

v. Atlas G l o b

. Grp., L.P.
, 541 U .S. 567, 574 (2004)). Specifically
, when a jurisdictional defect has been c ured a fter removal and the case h as be e n tried in federal court, a violation of § 1441(a) c an be ex cused if remandi n g t h e case to state court would be inconsistent “with the f air a nd unprotracted administration of justice.” Id. (quoting L e wis
, 519 U.S. at 77).

Th e d e c i s ion to e x cuse a violation o f § 1441(a) depends

on the stag e o f the underly ing proceeding s. W hen a case “has been tried in federal court,” “con siderations of finality
,

9 Sectio n 1 4 4 1 (a) p ro v i d es, in relev an t p art:

[A ]n y civ il actio n bro u g h t in a State co u rt o f w h ich th e d istrict co u rts o f th e Un ited States h av e o rig i n al j u r i sd ictio n , m ay be rem o v ed by th e d ef en d an t o r th e d ef en d an ts, to th e d istrict co u rt o f th e Un ited States f or th e d istrict an d d iv isio n em b racin g th e p lace w

h ere

su ch actio n is p en d in g

.

2 8 U.S.C. § 1 4 4 1 (a).C I T Y O F O A K L A N D V

. B P 26

efficiency
, and econo m y become overwhelming ,” Lewis
, 519 U.S. at 7 5
, a nd in those circumstances, the Supreme Court h as r efused to “wipe out the a djudication postjudg ment” so long as the there was jurisdiction w hen the district c ourt entered judg ment, id. at 77; see also Grubbs v

. Gen. Elec. Credit Corp.
, 405 U.S

. 6 99, 702 (1972). F o r instance, in Lewis
, the Court ex cused a violation of § 1441(a) when the case wa s l i t i gated in federal court for o ver three
y ears, culminating in a six -day jury trial. 519 U.S. at 66–67. “Requiring [ remand] after y ea r s of litig ation,” the Court

ex p lained, “would impose u nnecessary and wasteful burdens

on the p a rties, judg es, a

nd other litig ants waiting for judicial attention.” Id. at 76 (quoting Newman-Green, Inc. v. AlfonzoLarrain , 490 U.S. 826, 836 (1989)). W e have ex tended this reasoning to cases w here the district court resolves “state law issues on the merits” at summary judg ment. Singh
, 925 F .3d
at 1071. 1 0 F or instance, we ex cused a violation of § 1441(a) when, after ex tensive motion p ractic e and discovery
, the district court g ranted summary judg ment in f a vor of the defendants. Id. a t 1061–62. W e reasoned that the case was sufficiently analog ous to one in which there was a trial on the merits and therefore held that “[ c ] o nsiderations of finality
, efficiency
, and economy ” c ounseled in favor of ex cusing the violation of § 1441(a). Id. at 1071 (quoting Lewis , 519 U.S. at 75).

10 W e h av e h eld th at th is ru le d o e s n o t ap p ly w h en w e rev erse th e g ran t o f su

m m ary j u d g m en t, s u ch th at t h ere is n o lo n g er a “

j u d g m en t on th e m erits.” Prize Frize, In c. v. Ma trix ( U.S .) In c. , 1 6 7 F.3 d 1 26 1 , 1 2 6 6 (9 th Cir. 1 9 9 9 ), su

p ersed ed b y s ta tu t e o n o th er g ro u n d s a s reco g n ized in Ab reg o Ab reg o v. D o w C h e m. Co

. , 4 4 3 F.3 d 6 7 6
, 6 8 1 (9 th Cir. 20 0 6 );

a cco rd Ema r

d v. Hu g h es Aircra

ft Co

. , 1 5 3 F.3 d 9 4 9
, 9 6 2 (9 th Cir. 1 9 9 8 ),

a b r o g a ted o n o th er gro u n ds b y Eg elh o ff v. Eg elh o

ff ex rel. Brein er , 5 3 2 U.S. 1 4 1 , 1 4 6 (2 0 0 1 ).C I T Y O F O A K L A N D V

. B P 27

This reasoning
, however, g ene r a lly will not apply when

a district court dismisses a complaint f or failure t o state a claim u n d er Rule 12(b)(6). That rule is desig ned “to enable defendants to challeng e the leg al sufficiency of complaints

w i t hout subjecting themselves to d iscovery ,” the c ost o f which can be “prohibitive.” Rutman W ine Co. v. E. & J

. Gal l o W i n ery , 829 F .2d 729, 738 (9th Cir. 1987). “[ T] he
purpose o f a motion u nder Rule 12(b)(6) is to test the formal sufficiency o f

. . . [ a] clai m for relief; the motion is not a procedure f

o r r esolving a contest between the parties about the facts or the substantive merits of the plaintiff’s case.” 5B Arthur R. Miller et al., F

ederal Practice & Procedure § 1356 (3d ed. 2020). I n contrast, a motion for sum m a r y j u dg ment is desig ned to “test whe t h er t h e re is a g enuine issue o f material fact” and “ often i n v olves the use of p leading s, depositions, answers to inte rr o g atories, and affidavits.” Id. Moreover, summary judg ment is appropriate only if the “movant is entitled to judg ment as a matter o f law,” Fe d. R. Civ. P. 5 6 (a), whereas “the usual course o f action upon g ranting a defendant’s Rule 12(b)(6) mo t ion is to allow a plaintiff to amend his or her complaint,” W aste Control Specialists, LLC v. Envirocare o f T e x

. , Inc.
, 1 99 F

. 3d 781, 786 (5th Cir.), opinion withdrawn and superseded in part on reh’g
, 207 F .3d 225 (5th Cir. 2000).

I n lig ht of these d ifferences, we ag ree wi t h the F ifth Circuit that a dismissal under Rule 12(b)(6), unlike a g rant o f

su mmary judg ment, is g enerally “insufficient to forestall an otherwise pro p er remand.” Camsoft D ata Sys., Inc. v. S. Elecs. S u pply, Inc.
, 7 56 F .3d 327, 338 (5th Cir. 2014). W e have recog niz ed that the “c o n c er n for judicial economy ” is slig ht when a case is pe n d i n g for under a y ear, the p laintiff
eng ag es in no dis c o v e r

y , a nd the district court d ismisses the

case “at an early st a g e, prior to trial on the merits.” D y er v

.C I T Y O F O A K L A N D V

. B P 28

Greif Bros.
, 7 66 F .2d 3 9 8
, 3 99, 401 (9th Cir. 1985), superseded by statute on other grounds as stated in Beeman

v. Olson
, 8 28 F .2d 620, 621 (9th Cir. 1987)

. A case consumes a “minimum of judicial resources” if it is pending for only a few months befor e it is d ismissed under Rule 12(b)(6). W

aste Control Specialists
, 199 F .3d at 787. L ikewise, the Six th Circuit has recog niz ed that “concerns for judicial economy ” are insig nificant when d i s m i s s a l comes “so early in the pleading s stag e that there has been minimal investment of the parties’ time in discovery or of the court’s time in judicial proceeding s or d eliberations.” Chivas Prods. Ltd. v. Owen
, 864 F .2d 1280, 1286–87 (6th Ci r

. 1 988), abrogated on other grounds by Tafflin v. Levitt
, 493 U .S. 455, 461 (1990). I n short, “ considerations of finality
, e fficiency
, and economy ” are rarel y , i f ever, “overwhelming ” when a district court dismisses a case at the pleading stag e before the parties have eng ag ed in discovery

. 1 1

I n this case, “considerations of finali t y , efficiency
, a nd

e c o nomy ” are far from “overwhelming .” Lewis
, 519 U.S.
at 7 5

. W h en the district court enter e d judg ments, the cases had been on its docket for less t h a n a y ear—just over eig ht months. T he parties eng ag ed in mot i on practice under Rule 12, and there had been no d i s covery

. Althoug h the district
court held h ea r i n gs and the parties presented a “tutorial” on g lobal warming
, that i s a r elatively modest use of judicial

11 In Pa rrin o v. FHP, In c. , w e h e l d th at a d ef en d an t’ s f

ailu re to

co m ply w ith a j u d g e- m ad e p ro ced u ral req u irem en t f o r rem o v a l d i d no t

w arran t rev ersal of a d i s m i s s a l u n d er Ru le 1 2 (b )(6 ) an d “ rem an d o f th e

m atter to state co u rt.” 1 4 6 F.3 d 6 9 9
, 7 0 3 (9 th Cir. 1 9 9 8 ), su p ersed ed b y sta tu t e on o th er gro u nd

s a s reco g n ized in Ab reg o Ab reg o , 4 4 3 F .3 d at 6 8 1

. B u t Pa rrin o is n ot ap p licab le w h en a case i s rem o v ed in v io latio n of § 1 44 1(a), resu ltin g in a “ statu t o ry d ef ect” w ith resp ect to rem o v al. Gru p o Da ta flu x , 5 4 1 U.S. at 5 7 4

.C I T Y O F O A K L A N D V

. B P 29

r e sources as compared to, for ex ample, three y ears o f litig ation, c u l m i nating in a six -day jury trial. See id. at 66–67. B ecause the district court dismissed these cases at the pl e a ding stag e, after they were pending for less than a y e ar and before the parties eng ag ed 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; W

aste Control S

peci a l i s t s , 199 F .3d at 786; Dyer
, 766 F. 2 d a t 401; Chivas P rods.
, 864 F .2d at 1286–87. According ly
, if there w as not subject-matter jurisdiction at the time of removal, the cases must proceed in state court.

I V

The district court did not address the alternative bases for removal asserted in the Energ y C o m p anies’ notices o f removal. And we g enerally do not c onsider issues “ not passed upon below.” A m

. P resident Li n e s , Ltd. v. I nt’l Longshore & W

arehouse Union, Alaska Lon gshore D iv., Unit 60
, 721 F

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

. W ulff
, 428 U.S. 106, 120 (1976)). Accor d i n gly
, we remand these cases to the district c o ur t t o d e termine whether there

was an alternative basis f or jurisdiction. 1 2 I f there was not,

12 T h e d i strict co u

rt req u ested su

p p lem en t al b rief

in g o n h o w th e

co n cep t o f

th e “ ‘ n av ig ab le w aters o f th e Un ited States’

. . . relates to th e

rem o v al j u risd ic t i o n i ssu e in th [e] case.” A s th e Cities p o in ted o u t, h o w ev er, th e En erg y Co m pan ies w aiv ed an

y arg u m en t related to ad m iralty j u risd ictio n b y n o t in v o k in g i t in t h eir n o tices o f rem o v al. S ee 2 8 U.S.C. § 1 4 4 6(a) (n o t ice o f rem o v al m u st “ co n tain [] a sh o rt an d p lain statem en t

o f th e g ro u n ds f

o r rem o v al”); ARCO
, 2 13 F.3 d at 1 1 1 7 (n o tice o f rem o v al

“ can n o t b e am en d ed to ad d a sep arate b asis f o r rem o v al j u risd ictio n af ter th e th irty d ay p erio d ” (citatio n o m itted )); O’Ha llo ra n , 85 6 F.2 d at 1 3 8 1 (sam e). T h u s, th e d i strict co u rt sh o u l d co n f in e its an aly sis to th e b ases f or j u risd ictio n

asserted in th e n o tices o f rem o v al.C I T Y O F O A K L A N D V

. B P 30

the cases should be remanded to state c ourt. 1 3 This panel will retain jurisdiction for any subsequent a ppeals arising from these cases.

VACATED AND REMANDED

. 1 4

13 W e d o n o t r each th e q u estio n w h eth er th e d istrict co u rt lack ed
p erso n al j u risd ictio n o v er f o u r o f th e d ef

en d an ts. If

, o n rem an d
, th e d istrict co u rt d eterm in es th a t t h e cases m u st p ro ceed in state co u rt, th e Cities are f

ree to m o v e th e d istrict co u rt to v acate its p erso n al- j u risd ictio n

r u l i n g

. Cf. Ru h rg a s AG v. Ma ra th o n O il Co

. , 5 2 6 U.S. 5 7 4, 5 8 7

– 8 8 (1 9 9 9) (statin g th at in m ost in stan ces “ ex p ed itio n an d sen sitiv ity to state

c o u rts’ co eq u al s tatu re sh o u ld im p el [a] f ed eral co u rt to d isp o se of [su bj ect- m atter j u risd i ctio n ] issu e[s] f irst”); Cern er M

i d d le E. Ltd

. v. Belb a di En ters. LLC
, 9 3 9 F.3 d 10 0 9
, 10 1 4 (9 th Cir. 2 0 1 9 ) (h o ld in g th at th e case s h o u l d b e r e m a n d e d to state co u rt b ased o n a lack of su b j ectm a t t e r j u

risd ictio n an d d eclin in g to reach th e i ssu e o f perso n a l j u risd ictio n ); S

p ec ia l In vs., In c. v. Aero Air, In c. , 3 6 0 F.3 d 98 9
, 9 9 4

– 9 5 (9 th Cir. 2 00 4 ).

14 Each p arty

sh all b ear its o w

n co sts o n ap p eal.