Court Opinion

ID: 6498479
Source: CourtListenerOpinion
Date Created: 2022-07-07 17:00:44.583368+00
Date Added: 2024-06-11T08:51:10.007874
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

CITY & COUNTY OF HONOLULU,            No. 21-15313
                Plaintiff-Appellee,
                                         D.C. No.
                v.                    1:20-cv-00163-
                                         DKW-RT
SUNOCO LP; ALOHA PETROLEUM,
LTD.; EXXON MOBIL CORPORATION;
EXXONMOBIL OIL CORPORATION;
SHELL PLC; SHELL USA, INC.;
SHELL OIL PRODUCTS COMPANY
LLC; CHEVRON CORPORATION;
CHEVRON USA INC.; BHP GROUP
LIMITED; BHP PLC; BHP HAWAII
INC.; BP PLC; BP AMERICA, INC.;
MARATHON PETROLEUM CORP.;
CONOCOPHILLIPS; CONOCOPHILLIPS
COMPANY; PHILLIPS 66 COMPANY;
ALOHA PETROLEUM LLC,
            Defendants-Appellants,

               and

DOES, 1 through 100 inclusive,
                         Defendant.
2       CITY & CTY. OF HONOLULU V. SUNOCO

COUNTY OF MAUI,                         No. 21-15318
                  Plaintiff-Appellee,
                                           D.C. No.
                v.                      1:20-cv-00470-
                                          DKW-KJM
CHEVRON USA INC.; CHEVRON
CORPORATION; SUNOCO LP; ALOHA
PETROLEUM, LTD.; ALOHA                    OPINION
PETROLEUM LLC; EXXON MOBIL
CORPORATION; EXXONMOBIL OIL
CORPORATION; SHELL PLC; SHELL
USA, INC.; SHELL OIL PRODUCTS
COMPANY LLC; BHP GROUP
LIMITED; BHP GROUP PLC; BHP
HAWAII INC.; BP PLC; BP AMERICA,
INC.; MARATHON PETROLEUM CORP.;
CONOCOPHILLIPS; CONOCOPHILLIPS
COMPANY; PHILLIPS 66 COMPANY,
             Defendants-Appellants,

               and

DOES, 1 through 100 inclusive,
                         Defendant.
       CITY & CTY. OF HONOLULU V. SUNOCO             3

   Appeal from the United States District Court
             for the District of Hawaii
  Derrick Kahala Watson, District Judge, Presiding

     Argued and Submitted February 17, 2022
      Submission Vacated February 22, 2022
           Resubmitted June 29, 2022
               Honolulu, Hawaii

                 Filed July 7, 2022

Before: Michael Daly Hawkins, Ryan D. Nelson, and
        Danielle J. Forrest, Circuit Judges.

            Opinion by Judge R. Nelson
4           CITY & CTY. OF HONOLULU V. SUNOCO

                          SUMMARY *

      Climate-Related Claims / Federal Jurisdiction

   Affirming the district court’s order remanding to state
court climate-related claims against numerous oil and gas
companies, the panel held that defendants could not show
federal jurisdiction.

    Plaintiffs alleged that the oil and gas companies knew
about climate change, understood the harms energy
exploration and extraction inflicted on the environment, and
concealed those harms from the public. Plaintiffs sued in
Hawaii state court, asserting state-law public and private
nuisance, failure to warn, and trespass claims. The
complaints asserted that defendants’ deception caused harms
from climate change, like property damage from extreme
weather and land encroachment because of rising sea levels.

    The panel held that removal from state court was not
proper under federal officer jurisdiction, which required
defendants to show that they were “acting under” federal
officers, that they could assert a colorable federal defense,
and that plaintiffs’ injuries were for or relating to
defendants’ actions. The panel held that defendants did not
act under federal officers when they produced oil and gas
during the Korean War and in the 1970s under the Defense
Production Act, when they repaid offshore oil leases in kind
and contracted with the government to operate the Strategic
Petroleum Reserve, when they conducted offshore oil
operations, or when they operated the Elk Hills oil reserve,

    *
      This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
          CITY & CTY. OF HONOLULU V. SUNOCO                 5

an oil field run jointly by the Navy and Standard Oil. The
panel further held that defendants did not assert a colorable
federal defense by citing the government-contractor defense,
preemption, federal immunity, the Interstate and Foreign
Commerce Clauses, the Due Process Clause, the First
Amendment, and the foreign affairs doctrine. The panel
concluded that most of these defenses failed to stem from
official duties, and the government-contractor and immunity
defenses were not colorable.

    The panel held that defendants did not establish federal
enclave jurisdiction because they could not show that
activities on federal enclaves directly caused plaintiffs’
injuries. The panel explained that plaintiffs’ claims were not
about defendants’ oil and gas operations, and defendants’
activities on federal land were too remote and attenuated
from plaintiffs’ injuries.

    Finally, the panel held that defendants did not establish
jurisdiction under the Outer Continental Shelf Lands Act
because their activities on the Outer Continental Shelf were
too attenuated from plaintiffs’ injuries.
6         CITY & CTY. OF HONOLULU V. SUNOCO

                       COUNSEL

Theodore J. Boutrous Jr. (argued) and William E. Thomson,
Gibson Dunn & Crutcher LLP, Los Angeles, California;
Thomas G. Hungar, Gibson Dunn & Crutcher LLP,
Washington, D.C.; for Defendants-Appellants.

Victor M. Sher (argued), and Matthew K. Edling, Sher
Edling LLP, San Francisco, California; Monana M. Lutey,
Corporation Counsel; Richelle M. Thomson and Keola R.
Whittaker, Deputies Corporation Counsel; Office of the
Corporation Counsel, Wailuku, Hawai‘i; Dana M.O. Viola,
Corporation Counsel; Robert M. Kohn, Nicolette Winter,
and Jeff A. Lau, Deputies Corporation Counsel; Office of the
Corporation Counsel, Honolulu, Hawai‘i; for Plaintiff-
Appellee.

William M. Jay and Andrew Kim, Goodwin & Procter LLP,
Washington, D.C.; Andrew R. Varcoe and Stephanie A.
Maloney, U.S. Chamber Litigation Center, Washington,
D.C.; for Amicus Curiae Chamber of Commerce of the
United States of America.

Tristan L. Duncan, Shook Hardy & Bacon LLP, Kansas
City, Missouri; Tammy Webb, Shook Hardy & Bacon LLP,
San Francisco, California; for Amici Curiae General
(Retired) Richard B. Myers and Admiral (retired) Michael
G. Mullen.

Robert S. Peck, Center for Constitutional Litigation PC,
Washington, D.C., for Amici Curiae National League of
Cities, U.S. Conference of Mayors, and International
Municipal Lawyers Association.
          CITY & CTY. OF HONOLULU V. SUNOCO                 7

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

William A. Rossbach, Rossbach Law PC, Missoula,
Montana, for Amicus Curiae Charles Fletcher.

Michael R. Cruise, Leavitt Yamane & Soldner, Honolulu,
Hawai‘i; Chase H. Livingston, Honolulu, Hawai‘i; for
Amici Curiae Legal Scholars.

Miranda C. Steed, Jon S. Jacobs LLLC, Honolulu, Hawai‘i,
for Amicus Curiae Hawai‘i State Association of Counties.

Clare E. Connors, Attorney General; Kimberly T. Guidry,
Solicitor General; Ewan C. Rayner and Kaliko‘onālani D.
Fernandes, Deputy Solicitors General; Department of the
Attorney General, Honolulu, Hawai‘i; Rob Bonta, Attorney
General, Sacramento, California; William Tong, Attorney
General, Hartford, Connecticut; Kathleen Jennings,
Attorney General, Wilmington, Delaware; Brian E. Frosh,
Attorney General, Baltimore, Maryland; Keith Ellison,
Attorney General, Saint Paul, Minnesota; Andrew J. Bruck,
Acting Attorney General, Trenton, New Jersey; Hector
Balderas, Attorney General, Santa Fe, New Mexico; Letitia
James, Attorney General, Albany, New York; Ellen F.
Rosenblum, Attorney General, Salem, Oregon; Peter F.
Neronha, Attorney General, Providence, Rhode Island;
Robert W. Ferguson, Attorney General, Olympia,
Washington; Maura Healey, Attorney General, Boston,
Massachusetts; Karl A. Racine, Attorney General,
Washington, D.C.; for Amici Curiae States of Hawai‘i,
California, Connecticut, Delaware, Maryland, Minnesota,
8         CITY & CTY. OF HONOLULU V. SUNOCO

New Jersey, New Mexico, New York, Oregon, Rhode
Island, Washington, the Commonwealth of Massachusetts,
and District of Columbia.

                         OPINION

R. NELSON, Circuit Judge:

    The City and County of Honolulu and the County of
Maui (Plaintiffs) seek to bring climate-related claims against
numerous oil and gas companies (Defendants). The question
before us has nothing to do with the merits of those claims,
but only whether they belong in federal court.

     We do not write on a blank slate. Various oil company
defendants have sought removal four times in similar climate
change suits, including in this Court. See County of San
Mateo v. Chevron Corp. (San Mateo II), 32 F.4th 733 (9th
Cir. 2022); Rhode Island v. Shell Oil Prods. Co., 35 F.4th 44
(1st Cir. 2022); Mayor of Baltimore v. BP P.L.C. (Baltimore
II), 31 F.4th 178 (4th Cir. 2022); Bd. of Cnty. Comm’rs of
Boulder Cnty. v. Suncor Energy (U.S.A.) Inc., 25 F.4th 1238
(10th Cir. 2022). Similar to here, defendants in those cases
contended that removal was proper under jurisdiction for
federal officers, federal enclaves, and the Outer Continental
Shelf Lands Act (OCSLA). Following precedent and
consistent with our sister circuits, we reject these arguments.
Because Defendants cannot show federal jurisdiction, we
affirm.

                               I

    Plaintiffs allege that oil and gas companies knew about
climate change, understood the harms energy exploration
and extraction inflicted on the environment, and concealed
           CITY & CTY. OF HONOLULU V. SUNOCO                  9

those harms from the public. Plaintiffs sued in Hawaii state
court, asserting state-law public and private nuisance, failure
to warn, and trespass claims. The Complaints assert that
Defendants’ deception caused harms from climate change,
like property damage from extreme weather and land
encroachment because of rising sea levels.

    Defendants removed, asserting eight jurisdictional
grounds. Plaintiffs sought to remand. After addressing the
three removal grounds at issue before us, the district court
remanded.      Defendants now appeal and we have
consolidated the two appeals.

                               II

    We have jurisdiction to review the district court’s
remand order under 28 U.S.C. §§ 1291, 1447(d). BP P.L.C.
v. Mayor of Baltimore, 141 S. Ct. 1532, 1538 (2021). We
review the district court’s decision de novo. Canela v.
Costco Wholesale Corp., 971 F.3d 845, 849 (9th Cir. 2020).

                              III

    Defendants’ arguments lack merit. For federal officer
jurisdiction, Defendants must show: (1) they were “acting
under” federal officers, (2) they can assert a colorable federal
defense, and (3) Plaintiffs’ injuries were for or relating to
Defendants’ actions. Most arguments fail the first prong,
and all fail the second. For federal enclave jurisdiction,
Defendants cannot show that activities on federal enclaves
directly caused Plaintiffs’ injuries. And for jurisdiction
under OCSLA, Defendants’ activities on the Outer
Continental Shelf (OCS) are too attenuated from Plaintiffs’
injuries. We address each argument in turn.
10         CITY & CTY. OF HONOLULU V. SUNOCO

                               A

     The federal officer removal statute allows defendants to
remove a “civil action . . . that is against or directed to . . .
[t]he United States or any agency thereof or any officer (or
any person acting under that officer) . . . in an official or
individual capacity, for or relating to any act under color of
such office.” 28 U.S.C. § 1442(a)(1). Exercising “prudence
and restraint,” “we strictly construe the removal statute
against removal jurisdiction.” Hansen v. Grp. Health Coop.,
902 F.3d 1051, 1056–57 (9th Cir. 2018) (citation omitted).
To establish federal jurisdiction, a defendant must show that
(a) “it is a person within the meaning of the statute”; (b) “it
can assert a colorable federal defense”; and (c) “there is a
causal nexus between its actions, taken pursuant to a federal
officer’s directions, and [the] plaintiff’s claims.” San Mateo
II, 32 F.4th at 755 (citing Riggs v. Airbus Helicopters, Inc.,
939 F.3d 981, 986–87 (9th Cir. 2019)). Because the parties
agree that corporations are persons, the disputes are
(1) whether Defendants acted under federal officers,
(2) whether Defendants can assert colorable federal
defenses, and (3) whether the lawsuits are for or relating to
Defendants’ actions. We need only address prongs one and
two.

                               1

    The first prong is “acting under” federal officers.
28 U.S.C. § 1442(a)(1). “The words ‘acting under’ are
broad, and . . . the statute must be ‘liberally construed.’”
Watson v. Philip Morris Cos., 551 U.S. 142, 147 (2007)
(quoting Colorado v. Symes, 286 U.S. 510, 517 (1932)). In
San Mateo II, we identified four factors to determine
whether a person was “acting under” a federal officer:
(1) working under an officer “in a manner akin to an agency
relationship”; (2) being “subject to the officer’s close
           CITY & CTY. OF HONOLULU V. SUNOCO                   11

direction, such as acting under the . . . ‘guidance, or control’
of the officer” or having an “unusually close” relationship
“involving detailed regulation, monitoring, or supervision”;
(3) helping fulfill “basic governmental tasks”; and
(4) conducting activities “so closely related to the
government’s implementation of its federal duties that the
. . . person faces ‘a significant risk of state-court prejudice.’”
32 F.4th at 756–57 (citing Watson, 551 U.S. at 151–53).

     We gave several examples in San Mateo II. We noted
that a private party acts under the government when the party
is a contractor given detailed specifications and ongoing
supervision to help fight a war. San Mateo II, 32 F.4th at 757
(citing Watson, 551 U.S. at 153–54 (citing Winters v.
Diamond Shamrock Chem. Co., 149 F.3d 387, 399–400 (5th
Cir. 1998), overruled on other grounds by Latiolais v.
Huntington Ingalls, Inc., 951 F.3d 286 (5th Cir. 2020))). On
the other hand, neither “an arm’s-length business
arrangement with the federal government” nor “suppl[ying]
it with widely available commercial products or services”
are enough to show “acting under” a federal officer. Id.
Compliance with the law and obeying federal orders are also
not enough, “even if the regulation is highly detailed and . . .
the private firm’s activities are highly supervised and
monitored.” Id. (quoting Watson, 551 U.S. at 153). Finally,
we said that courts “may not interpret [the removal statute]
so as to ‘expand the scope of the statute considerably,
potentially bringing within its scope state-court actions filed
against private firms in many highly regulated industries.’”
Id. (quoting Watson, 551 U.S. at 153).

    Defendants argue that they acted under federal officers
in six ways. Two arguments fail because they set out only
normal commercial or regulatory relationships that do not
involve detailed supervision. We rejected two in San Mateo
12        CITY & CTY. OF HONOLULU V. SUNOCO

II, and Defendants’ new factual points do not change the
outcome. And we need not reach the last two. Even if
Defendants acted under federal officers, they still fail the
colorable federal defense prong.

                             a

    Defendants did not act under federal officers when they
produced oil and gas during the Korean War and in the 1970s
under the Defense Production Act (DPA). DPA directives
are basically regulations. See Michael H. Cecire & Heidi M.
Peters, Cong. Rsch. Serv., R43767, The Defense Production
Act of 1950: History, Authorities, and Considerations for
Congress 4–7 (2020). When complying, Defendants did not
serve as government agents and were not subject to close
direction or supervision. The government sometimes
invoked the DPA in wartime, but unlike Winters,
Defendants’ compliance with the DPA was only lawful
obedience. See Watson, 551 U.S. at 153 (citing Winters,
149 F.3d at 387). That is not enough. See San Mateo II,
32 F.4th at 759–60.

                             b

    Next, Defendants argue that they acted under federal
officers when they repaid offshore oil leases in kind and
contracted with the government to operate the Strategic
Petroleum Reserve (SPR). Their argument fails because
Defendants did not act as government agents, there was not
close direction or supervision, and Defendants’ actions were
more like an arm’s-length business deal.

    The SPR is a federally owned oil reserve created after
the 1973 Arab oil embargo. Heather L. Greenley, Cong.
Rsch. Serv., R46355, The Strategic Petroleum Reserve:
Background, Authorities, and Considerations 1–2 (2020).
          CITY & CTY. OF HONOLULU V. SUNOCO                13

Many Defendants pay for offshore leases in oil and deliver
it to the SPR. Another Defendant leases and operates the
SPR and by contract must support the government if there is
a drawdown on the reserve.

    But Defendants cannot show “acting under” jurisdiction
for SPR activities. First, payment under a commercial
contract—in kind or otherwise—does not involve close
supervision or control and does not equal “acting under” a
federal officer. Second, operating the SPR involves a typical
commercial relationship and Defendants are not subject to
close direction. See San Mateo II, 32 F.4th at 756–57.
Relative to Winters, 551 U.S. at 153, the government’s
directions here are more general and involve fewer detailed
specifications and less ongoing supervision.

                              c

    Defendants also did not act under federal officers when
conducting offshore oil operations. Under OCSLA, the
federal government offers private parties leases for offshore
fossil fuel exploration, development, and production.
43 U.S.C. §§ 1331–1356b. But in San Mateo II we rejected
“acting under” for offshore oil and gas operations under
these federal leases. 32 F.4th at 759–60. We reasoned that
“[t]he leases do not require that lessees act on behalf of the
federal government, under its close direction, or to fulfill
basic governmental duties,” there was not a significant risk
of state court prejudice, and the leases’ obligations “largely
track[ed] statutory requirements.” Id. (citing Watson,
551 U.S. at 152).

    Using new factual arguments, Defendants try to
surmount San Mateo II. They contend that Congress studied
creating a national oil company and that offshore oil
resources are a national security asset. And they show how
14        CITY & CTY. OF HONOLULU V. SUNOCO

the government controls offshore oil operations under
federal leases.

    Yet Defendants break no new ground. Congress
endorsed oil operations and considered making a national oil
company, but that does not show that oil production was a
basic governmental task. Government oversight for offshore
leases is not enough to transform activities that San Mateo II
rejected into ones showing “close direction.” Id. at 759.

     Defendants rely on a history professor who specializes
in oil exploration. The professor chronicles offshore oil
leases and government control over such operations, which
Defendants contend show a high degree of supervision. But
the government orders show only a general regulation
applicable to all offshore oil leases. Indeed, Defendants’
expert portrays the “OCS orders” as “directions and
clarifications to all operators on how to meet the
requirements in the C.F.R.” General government orders
telling Defendants how to comply are not specific direction
and supervision, which the removal statute requires. Cf.,
e.g., Leite v. Crane Co., 749 F.3d 1117, 1123 (9th Cir. 2014)
(“[T]he Navy issued detailed specifications governing the
form and content of all warnings . . . on the equipment itself
and in accompanying technical manuals.”).

    Defendants also argue that government “regional
supervisor[s] still had to make adaptive and discretionary
decisions” pertaining to individual operations. But these
were decisions like approving certain actions on a well or
giving specific waivers to excuse compliance with
regulations, not directing or supervising operations
generally. The government also set overall production levels
for wells. Yet the orders were general regulations that
applied to everyone rather than “unusually close” direction
or supervision. See Watson, 551 U.S. at 153. We agree with
          CITY & CTY. OF HONOLULU V. SUNOCO                 15

the district court that the leases do not show sufficient
direction to meet the “acting under” prong. City of Honolulu
v. Sunoco LP, No. 20-cv-00163, 2021 WL 531237, at *5–6
(D. Haw. Feb. 12, 2021).

                              d

      Finally, Defendants did not act under federal officers in
operating the Elk Hills oil reserve. Elk Hills was an oil field
run jointly by the Navy and Standard Oil, a predecessor of
Chevron. See United States v. Standard Oil Co., 545 F.2d
624, 626–28 (9th Cir. 1976). Because of interconnected
underground oil, the parties agreed to coordinate. San Mateo
II, 32 F.4th at 758. And “[b]ecause the Navy sought to limit
oil production . . . in the event of a national emergency, the
. . . agreement required that both Standard [Oil] and the
Navy curtail their production and gave the Navy ‘exclusive
control over the exploration, prospecting, development, and
operation of the Reserve.’” Id. at 758–59.

    In San Mateo II, we rejected the “acting under” argument
for Standard Oil’s Elk Hills operations. Id. at 759–60.
Rather than acting for the government, Standard Oil and the
Navy had “reached an agreement that allowed them to
coordinate their use of the oil reserve in a way that would
benefit both parties,” and so “Standard [Oil] was acting
independently.” Id. at 759.

    As with the OCS leases, Defendants try to sidestep San
Mateo II. They offer a different contract between the parties
(“Operating Agreement”), which is separate from the “Unit
Production Contract” in San Mateo II. Defendants argue that
the Navy had “exclusive control” over the time and rate of
exploration, and over the quantity and rate of production at
Elk Hills. And Defendants uncovered evidence showing that
the Navy employed Standard Oil.
16        CITY & CTY. OF HONOLULU V. SUNOCO

    We reject Defendants’ arguments. While one could read
the language about the Navy’s “exclusive control” as
detailed supervision, what instead happened was the Navy
could set an overall production level or define an exploration
window, and Standard Oil could act at its discretion. The
agreement gave Standard Oil general direction—not
“unusually close” supervision. Sunoco, 2021 WL 531237,
at *6.

    Besides, we have already held that a similar arrangement
did not meet the “acting under” prong. See Cabalce v.
Thomas E. Blanchard & Assocs., Inc., 797 F.3d 720, 727–29
(9th Cir. 2015). In Cabalce, we studied a relationship
between the government and a contractor in which the
contractor had to act “as prescribed and directed by” the
government. Id. at 724. Yet we held that the defendant was
not “acting under” federal officers. Id. at 730. We noted
that “the contract define[d] [the defendant’s] duties . . . in
general terms,” and the contractor was the one who decided
how to fulfill those duties. Id. at 728. The same logic applies
here. The contract gave Standard Oil duties in general terms,
and Standard Oil was free to fulfill them as desired. Such an
arrangement does not rise to the level of “acting under.”

                              2

    Prong two requires Defendants to “assert a colorable
federal defense.” San Mateo II, 32 F.4th at 755 (citing Riggs,
939 F.3d at 986–87). The defense must “aris[e] out of
[defendant’s] official duties.” Arizona v. Manypenny,
451 U.S. 232, 241 (1981). And in assessing whether a
defense is colorable, we must not be “grudging.” Jefferson
County v. Acker, 527 U.S. 423, 431 (1999). The Supreme
Court even held that a rejected federal defense could be
colorable. Id.; see Stirling v. Minasian, 955 F.3d 795, 801
(9th Cir. 2020) (“We do not express a view on whether this
          CITY & CTY. OF HONOLULU V. SUNOCO                 17

defense is ‘in fact meritorious’; we hold only that it is
‘colorable.’” (citing Leite, 749 F.3d at 1124)).

    To satisfy this prong, Defendants cite the government-
contractor defense, preemption, federal immunity, the
Interstate and Foreign Commerce Clauses, the Due Process
Clause, the First Amendment, and the foreign affairs
doctrine. For some of these, as the district court put it,
Defendants have “simply assert[ed] a defense and the word
‘colorable’ in the same sentence.” Sunoco, 2021 WL
531237, at *7 (citation omitted). Overall, the defenses fail
to stem from official duties or are not colorable.

    Most defenses do not flow from official duties. For
instance, Defendants argue that they cannot be “held liable
consistent with the First Amendment for alleged ‘roles in
denialist campaigns to misinform and confuse the public.’”
Even if this defense is colorable, it does not arise from
official duties, as Defendants do not contend that the
government ordered their allegedly deceptive acts.
Defendants’ due process, Interstate and Foreign Commerce
Clauses, foreign affairs doctrine, and preemption defenses
similarly do not arise from official duties.

    That leaves the government contractor and immunity
defenses. But Defendants do not show that these defenses
are colorable. On the government contractor defense,
Defendants cite two cases that dealt with design defect
claims, not failure to warn claims. See Boyle v. United
Techs. Corp., 487 U.S. 500 (1988); Gertz v. Boeing Co.,
654 F.3d 852 (9th Cir. 2011). And for their immunity
defense, Defendants argue that because they produced oil
and gas “at the direction of the federal government, . . . they
are immune from liability for any alleged injuries.” Sunoco,
2021 WL 531237, at *7.
18         CITY & CTY. OF HONOLULU V. SUNOCO

    It is true that we must not be “grudging” in assessing
whether asserted federal defenses are colorable, Acker,
527 U.S. at 431, and a defendant “need not win his case
before he can have it removed.” Willingham v. Morgan,
395 U.S. 402, 407 (1969). Still, Defendants’ conclusory
statements and general propositions of law do not make their
defenses colorable.     Thus, we reject federal officer
jurisdiction.

                                B

    Federal enclave jurisdiction refers to the principle that
federal law applies in federal enclaves. San Mateo II,
32 F.4th at 748–49 (citing U.S. Const. art. I, § 8, cl. 17).
When the federal government buys state land, unless one of
three narrow exceptions apply (none of which are relevant
here), federal law governs. Id. at 749 (citing Mater v. Holley,
200 F.2d 123, 124 (5th Cir. 1952)). This means a federal
court may have federal question jurisdiction based on
injuries arising from conduct on the enclave. Id.; see Alvares
v. Erickson, 514 F.2d 156, 160 (9th Cir. 1975) (noting that
there is federal jurisdiction if the claim’s locus is in a federal
enclave); cf. Lake v. Ohana Mil. Cmtys., LLC, 14 F.4th 993,
1003 (9th Cir. 2021) (noting that federal jurisdiction is not
exclusive if there is concurrent state jurisdiction).

    We invoke the doctrine of federal enclave jurisdiction
narrowly. See San Mateo II, 32 F.4th at 749–50 (finding no
jurisdiction where plaintiffs raised state-law claims arising
from injury to local property); Durham v. Lockheed Martin
Corp., 445 F.3d 1247, 1250 (9th Cir. 2006) (finding
jurisdiction for asbestos exposure on a federal enclave). A
claim must allege that an injury occurred on a federal
enclave or that an injury stemmed from conduct on a federal
enclave. San Mateo II, 32 F.4th at 749–50. And the
connection between injuries and conduct must not be “too
          CITY & CTY. OF HONOLULU V. SUNOCO                 19

attenuated and remote.” Id. at 750. For example, a
defendant cannot use activities on federal enclaves to create
instant jurisdiction for a state-law claim. See, e.g., Lake,
14 F.4th at 1002 (“[T]here is no reason to treat the resulting
state laws as if they were assimilated into federal law.”);
Allison v. Boeing Laser Tech. Servs., 689 F.3d 1234, 1238
(10th Cir. 2012) (“[N]o federal statute yet allows the broad
application of state employment, tort, and contract law to
federal enclaves.”).

    In San Mateo II, the defendants asserted that energy
companies had engaged in activities on federal enclaves
possibly leading to global warming and rising seas. 32 F.4th
at 750. But while the defendants identified some conduct on
federal enclaves, any connection between that conduct and
the plaintiffs’ alleged injuries was too remote. Id. The
plaintiffs’ claims asserted property damage in local areas.
Id. at 749–50. So we rejected the idea that the plaintiffs’
injuries arose from fossil fuel operations on federal enclaves.
Id. at 750–51 (citing Gunn v. Minton, 568 U.S. 251, 258
(2013)).

    Defendants do not satisfy federal enclave jurisdiction.
Plaintiffs’ claims are not about Defendants’ oil and gas
operations, and Defendants’ activities on federal enclaves
are too remote and attenuated from Plaintiffs’ injuries.

    Like San Mateo II, the Complaints do not attack
Defendants’ underlying conduct. See 32 F.4th at 744. Yet
Defendants try to recharacterize the claims from deceptive
practices to activities on federal enclaves. Sunoco, 2021 WL
531237, at *8. But “[t]he plaintiff is ‘the master of the
claim.’” San Mateo II, 32 F.4th at 746 (quoting City of
Oakland v. BP PLC, 969 F.3d 895, 904 (9th Cir. 2020)). We
agree with the district court: “[i]t would require the most
20        CITY & CTY. OF HONOLULU V. SUNOCO

tortured reading of the Complaints to find” jurisdiction.
Sunoco, 2021 WL 531237, at *8.

    Defendants try another ploy. They argue that because
some conduct happened on federal enclaves, the conduct
relates to injuries from Defendants’ deceptive practices. We
reject such a broad application. Under San Mateo II,
Defendants’ alleged tortious conduct is too attenuated from
Plaintiffs’ claimed injuries. Federal enclave jurisdiction
needs a direct connection between the injury and conduct.
San Mateo II, 32 F.4th at 750. As in San Mateo II, there is
no link. Even if much of Defendants’ oil and gas operations
occurred on federal enclaves, that still does not transform
Plaintiffs’ claims about deceptive practices into claims about
the conduct itself. See Suncor, 25 F.4th at 1272 (“[A]lleged
climate alteration by [the Energy Companies] . . . does not
speak to the nature of [the plaintiffs’] alleged injuries.”
(citation omitted)).

    Plaintiffs’ claims do not implicate federal enclave
activities. Nor is Defendants’ conduct tied directly to
Plaintiffs’ claimed injuries. Following San Mateo II, we
rebuff Defendants’ arguments.

                              C

    OCSLA permits federal jurisdiction over actions
“arising out of, or in connection with” operations on the OCS
“involv[ing] exploration, development, or production.”
43 U.S.C. § 1349(b)(1). But to achieve jurisdiction, one
must show more than “but-for” causation. Jurisdiction must
be based on conduct. The phrase “aris[e] out of, or in
connection with” permits federal jurisdiction for tort claims
“only when those claims arise from actions or injuries
occurring on the [O]uter Continental Shelf.” San Mateo II,
32 F.4th at 753. A test requiring only some connection
          CITY & CTY. OF HONOLULU V. SUNOCO               21

between a tort and OCS activities has no limiting principle.
Id. at 751 (citing Maracich v. Spears, 570 U.S. 48, 60
(2013)).

     Other circuits have applied a broad “but-for” standard.
Yet these cases dealt with claims having a “direct physical
connection to an OCS operation” or a “contract or property
dispute directly related to an OCS operation.” E.g., id.
at 754 (citing Suncor, 25 F.4th at 1273). Courts have also
required a “sufficient nexus to an operation on the OCS,” id.
(citing Suncor, 25 F.4th at 1273), and denied a “‘mere
connection’ between a claimant’s case” and OCS operations,
id. (quoting Baltimore II, 31 F.4th at 221).

    In San Mateo II, we rejected jurisdiction under OCSLA.
The defendants contended that the plaintiffs’ injuries—
allegedly caused by fossil fuel products, wrongful
promotion, concealment of hazards, and failure to seek safer
alternatives—were due in part to “cumulative fossil-fuel
extraction,” some of which occurred on the OCS. Id. at 751.
Even acknowledging that the removal statute does not
require “but-for” causation strictly, we held that the
connection between the limited OCS activities and the
plaintiffs’ injuries was “too attenuated.” Id. at 754. The
alleged injuries occurred in local jurisdictions. Id. at 749–
50. And the complaints did not refer to OCS activities; they
targeted the nature of the defendants’ products, knowledge
of harm, and concealment. Id. at 750.

   Defendants’ sporadic OCS activities cannot shoehorn
OCSLA jurisdiction for just any tort claim. The parties
agree that some Defendants engaged in exploration,
development, and production on the OCS. Sunoco, 2021
WL 531237, at *3. If that were the test, then Defendants
might have an argument. Yet federal jurisdiction does not
22        CITY & CTY. OF HONOLULU V. SUNOCO

exist because oil and gas companies’ OCS activities are too
attenuated and remote from Plaintiffs’ alleged injuries.

    Plaintiffs contend that oil and gas companies created a
nuisance when they misled the public. But just because
Defendants were allegedly trying to hoodwink the public
about harm from oil and gas operations—partially occurring
on the OCS—does not mean that OCS activities caused
Plaintiffs’ injuries. The connection is too tenuous.

    Indeed, Plaintiffs’ claimed injuries from Defendants’
deceptive practices do not stem from activities on the OCS,
even if OCS-produced oil accounts for 30% of annual
domestic production, as Defendants assert. As the district
court stated, “failing to warn and disseminating information
about the use of fossil fuels have nothing to do with such
direct acts or acts in support” of OCS operations. Id.

     Ruling for Defendants would “dramatically expand
[OCSLA]’s scope” because “‘[a]ny spillage of oil or
gasoline involving some fraction of OCS-sourced oil’ or
‘any commercial claim over such a[n OCS-sourced]
commodity’” could lead to removal. Suncor, 25 F.4th
at 1273. A statute about OCS fossil fuel should not let oil
and gas companies remove nearly every suit, no matter how
remote the tie to the OCS. See San Mateo II, 32 F.4th at 752
(citing Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473,
479 n.7 (1981)); Baltimore II, 31 F.4th at 232 (“Any
connection between fossil-fuel production on the OCS and
the conduct alleged in the Complaint is simply too remote.”);
Shell Oil, 35 F.4th at 60 (noting that the broad OCSLA
jurisdiction the energy companies advocated was “a
consequence too absurd to be attributed to Congress”).
          CITY & CTY. OF HONOLULU V. SUNOCO               23

   Defendants ask us to build a bridge too far to reach
federal jurisdiction under OCSLA.         Because such a
construction would lead to unstable results, we refuse.

                             IV

    This case is about whether oil and gas companies misled
the public about dangers from fossil fuels. It is not about
companies that acted under federal officers, conducted
activities on federal enclaves, or operated on the OCS. Thus,
we decline to extend federal jurisdiction.

   AFFIRMED.