Court Opinion

ID: 9940559
Source: CourtListenerOpinion
Date Created: 2024-02-14 19:03:45.904239+00
Date Added: 2024-06-11T13:45:00.730849
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

STATE OF DELAWARE, ex rel.        )
KATHLEEN JENNINGS, Attorney       )
General of the State of Delaware  )
                                  )
      Plaintiff,                  )C.A. No. N20C-09-097 MMJ CCLD
                                  )
BP AMERICA., BP P.L.C., CHEVRON   )
CORPORATION, CHEVRON U.S.A. INC., )
CONOCOPHILLIPS, CONOCOPHILLIPS )
COMPANY, PHILLIPS 66, PHILLIPS 66 )
COMPANY, EXXON MOBIL              )
CORPORATION EXXONMOBIL OIL        )
CORPORATION, XTO ENERGY INC.,     )
HESS CORPORATION, MARATHON OIL )
CORPORATION, MARATHON OIL         )
COMPANY, MARATHON PETROLEUM )
CORPORATION, MARATHON             )
PETROLEUM COMPANY, LP             )
SPEEDWAY LLC, MURPHY OIL          )
CORPORATION, MURPHY USA INC.,     )
ROYAL DUTCH SHELL PLC, SHELL OIL )
COMPANY, CITGO PETROLEUM          )
CORPORATION, TOTAL S.A., TOTAL    )
SPECIALITIES USA INC., OCCIDENTAL )
PETROLEUM CORPORATION, DEVON )
ENERY CORPORATION, APACHE         )
CORPORATION, CNX RESOURCES        )
CORPORATION, CONSOL ENERGY        )
INC., OVINTIV, INC., and AMERICAN )
PETROLEUM INSTITUTE,              )
                                  )
      Defendants.                 )

                                   1
                           Submitted: February 12, 2024
                           Decided: February 14, 2024

                   Upon The State of Delaware’s Application for
                      Certification of Interlocutory Appeal
                                    DENIED

               Upon Defendants’ Conditional Cross-Application for
                     Certification of Interlocutory Appeal
                                   DENIED

                                      ORDER

      (1) The State of Delaware has moved for an order certifying an interlocutory

appeal to the Delaware Supreme Court. The determination of whether to certify an

interlocutory appeal lies within the discretion of the Court and is analyzed under the

criteria set forth in Supreme Court Rule 42(b).          Rule 42(b)(i) states: “No

interlocutory appeal will be certified by the trial court or accepted by this Court

unless the order of the trial court decides a substantial issue of material importance

that merits appellate review before final judgment.” Rule 42(b)(ii) admonishes:

“Interlocutory appeals should be exceptional, not routine, because they disrupt the

normal procession of litigation, cause delay, and can threaten to exhaust scarce party

and judicial resources. Therefore, parties should only ask for the right to seek

interlocutory review if they believe in good faith that there are substantial benefits

that will outweigh the certain costs that accompany an interlocutory appeal.”
                                          2
      (2) Assuming that the gating requirement of Rule 42(b)(i) has been satisfied,

an application also must meet one or more of the eight factors set forth in Rule

42(b)(iii). Rule 42(b)(iii) counsels: “After considering these factors and its own

assessment of the most efficient and just schedule to resolve the case, the trial court

should identify whether and why the likely benefits of interlocutory review outweigh

the probable costs, such that interlocutory review is in the interests of justice. If the

balance is uncertain, the trial court should refuse to certify the interlocutory appeal.”

      (3) In this action, the State seeks to hold major fossil fuel companies and a

trade association liable for deceiving consumers and the public about climate change

impacts resulting from the use of fossil fuels. The State alleges: negligent failure to

warn, trespass, common law nuisance, and violations of the Delaware Consumer

Fraud Act.

      (4) By Opinion dated January 9, 2024 (“Opinion”), this Court made the

following findings.

                    This Court finds that claims in this case seeking
             damages for injuries resulting from out-of-state or global
             greenhouse emissions and interstate pollution, are pre-
             empted by the CAA. Thus, these claims are beyond the
             limits of Delaware common law.

                    This Court finds that the CAA does not pre-empt
             state law regulation of alleged claims and damages
             resulting from air pollution originating from sources in
             Delaware. Air pollution prevention and control at the
                                           3
source is the primary responsibility of state and local
governments.

       This Court finds that the political question doctrine
rarely, if ever, is applied to justify judicial abstention in
Delaware. The Court finds that there is no reason to apply
the doctrine in this case. Delaware courts have considered
similar cases in the environmental context, or involving
public nuisance product claims, without deferring on the
basis of a nonjusticiable political question.

        This Court finds that Monsanto controls. At this
stage in the proceedings, the State has stated a general
claim for environmental-based public nuisance and
trespass for land the State owns directly, but not for land
the State holds in public trust. Control of the product at the
time of alleged nuisance or trespass is not an element of a
nuisance claim. The State is alleging environmental harms
causing damage to the public. However, unlike
contamination of land and water in Monsanto, damages
caused by air pollution limited to State-owned property
may be difficult to isolate and measure. Nevertheless, that
is an issue to be addressed at a later stage of the case. This
should not be a reason to grant dismissal of nuisance and
trespass claims at this time.

       This Court finds that the State has failed to
specifically identify alleged misrepresentations for each
individual     defendant.     All     claims       alleging
misrepresentations, including “greenwashing”, must be
dismissed, with leave to amend with particularity, pursuant
to Rule 9(b).

       The Court finds that the State has stated a claim for
failure to warn. The State has alleged that Defendants
knew that their products were endangering the
environment, and harming their consumers and the State
of Delaware (a valid bystander). However, the question of
                              4
                whether the danger was open and obvious is not
                appropriate for resolution at the dismissal stage.

                       This Court finds that the DCFA claims are barred by
                the five-year statute of limitations. Tolling does not apply.

                       The Court finds that there must be a connection
                between Delaware-specific conduct and the alleged harm.
                There is no need to prove geo-located causation.1
                However, there must be a relationship between Delaware
                activities and the cause of action and alleged damages.
                Advertising, selling products, operating gas stations,
                and/or operating a refinery in Delaware are connections
                sufficient to survive dismissal. The State has alleged
                relationships for the six moving Defendants, sufficient to
                demonstrate specific personal jurisdiction. 2

                       This Court declines to resolve the Anti-SLAPP issue
                at this time based on a limited record. Thus, there is no
                basis for awarding attorneys’ fees to API.

                       This Court finds that there is a difference between
                misrepresentation and puffery. The issue of commercial
                speech, as opposed to misleading statements, involves a
                fact-intensive analysis. It is inappropriate for resolution on
                this motion to dismiss.

                      This Court finds that TotalEnergies must be
                dismissed for failure to be served with process.

                      THEREFORE, Defendants’ Joint Motion to
                Dismiss Plaintiff’s Complaint for Failure to State a Claim
                is hereby GRANTED IN PART AND DENIED IN
                PART.

1
    Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1026 (2021).
2
    See City and County of Honolulu v. Sunoco LP, 2023 WL 7151875, at *16 (Haw.).
                                                5
      Certain Defendants’ Motion to Dismiss for Lack of
Personal Jurisdiction is hereby DENIED.

       BP Defendants’ Motion to Dismiss the Complaint
for Failure to State a Claim Based Upon Misrepresentation
is hereby GRANTED, WITH LEAVE TO AMEND
WITH PARTICULARITY.

      Marathon Defendants’ Motion to Dismiss for
Failure to State a Claim Sounding in Fraud is hereby
GRANTED, WITH LEAVE TO AMEND WITH
PARTICULARITY.

     American Petroleum Institute’s Individual Merits
Motion to Dismiss is hereby GRANTED IN PART AND
DENIED IN PART.

       Hess Corporation’s Supplemental Motion to
Partially Dismiss for Failure to State a Claim on Statute of
Limitations Ground (DCFA) is hereby GRANTED.

      TotalEnergies SE’s Motion to Dismiss for Lack of
Personal Jurisdiction and Insufficient Service of Process is
hereby    GRANTED           ON THE           BASIS      OF
INSUFFICIENT SERVICE OF PROCESS.

      Apache Corporation’s Motion to Dismiss for
Failure to State a Claim is hereby GRANTED IN PART
AND DENIED IN PART.

       CITGO Petroleum Corporation and Murphy USA
Inc.’s Joint Motion to Dismiss for Failure to State a Claim
is hereby GRANTED IN PART WITH LEAVE TO
AMEND WITH PARTICULARITY, DENIED AS TO
DUTY TO WARN.

       CNX Resources Corporation’s Motion to Dismiss
for Failure to State a Claim Based Upon Misrepresentation
                             6
                 is hereby GRANTED IN PART WITH LEAVE TO
                 AMEND WITH PARTICULARITY, DENIED AS TO
                 DUTY TO WARN.

                       Marathon Oil Corporation’s Motion to Dismiss is
                 hereby GRANTED IN PART AND DENIED IN PART.
                 CONSOL Energy Inc.’s Motion to Dismiss for Failure to
                 State a Claim is hereby GRANTED IN PART WITH
                 LEAVE TO AMEND WITH PARTICULARITY,
                 DENIED AS TO DUTY TO WARN.

                       Chevron Defendants’ Anti-SLAPP Special Motion
                 to Dismiss is hereby DENIED.

                       American Petroleum Institute’s Motion to Strike
                 and/or Dismiss the Complaint Under the District of
                 Columbia’s Anti-SLAPP Statute is hereby DENIED.3

          (5) Certain Defendants moved for reargument. The Court issued an Order

dated February 12, 2024, denying the motions. Application for interlocutory appeal

was not ripe for consideration before resolution of the motions for reargument.

          (6) The State argues that interlocutory appeal pursuant to Supreme Court Rule

42(b) is justified because the Opinion: decided a substantial issue of material

importance; involves important questions of first impression; and conflicts with

decisions rendered by other trial courts in Delaware. Further, the State contends that

interlocutory review would serve considerations of justice and would advance

judicial economy.

3
    State ex rel. Jennings v. BP America Inc., et al., 2024 WL 98888, at *24-25 (Del. Super.).

                                                   7
      (7) Specifically, the State asserts that five substantial issues of material

importance warrant interlocutory review:

                  1. Whether the federal Clean Air Act (“CAA”)
             preempts the State’s claims insofar as they seek relief for
             harms involving out-of-state emissions;
                   2. Whether State ex rel. Jennings v. Monsanto Co.,
             299 A.3d 372 (Del. 2023), limits the State’s public
             nuisance claim to harms to State-owned lands;
                   3. Whether the statute of limitations bars the State’s
             claims for violations of the DCFA;
                   4. Whether Superior Court Civil Rule 9(b) requires
             dismissal of all claims alleging misrepresentations by
             Defendants; and
                   5. Whether the claims against TotalEnergies SE
             should be dismissed for insufficient service of process.

      (8) The State also argues that the Opinion decided important questions of first

impression regarding the preemptive scope of the CAA. The Opinion purportedly

is in conflict with a recent decision of the Supreme Court of Hawai’i.

      (9) The State contends that the Opinion conflicts with other Delaware case

law by applying the Rule 9(b) particularity requirement to all misrepresentation

claims, including the Delaware Consumer Fraud Act claims.

                                           8
      (10) Finally, the State asserts that unless the Opinion is reversed on

interlocutory appeal, the parties will need to ultimately re-do all stages of litigation,

including discovery, motion practice, expert opinions and trial.

      (11) Defendants oppose certification of the interlocutory appeal. With regard

to the CAA, Defendants argue that although the Opinion is the first time a Delaware

court has ruled on the issue, the Court relied on established federal precedent

supporting preemption. With regard to application of the recent Delaware Supreme

Court Monsanto decision, interlocutory review is not warranted simply because a

trial court applies a Supreme Court ruling for the first time. As to Rule 9(b),

Defendants point out that it is well-settled that allegations of fraud must be pled with

particularity. In any event, the misrepresentation claims were dismissed without

prejudice, subject to rejuvenation through amendment. Finally, the parties fully

briefed the dismissal based on failure of service and the implicit good cause issue.

      (12) Defendants alternatively move that should the Court certify the CAA

issue for interlocutory review, Defendants’ conditional cross-appeal should be

granted. The specific question would be whether the State’s claims seeking relief

for harms allegedly arising from interstate and international emissions are precluded

and preempted by federal law. The purpose would be to present all potentially case-

dispositive CAA issues.

                                           9
          (13) The Court finds that the Opinion determines a substantial issues of

material importance.4 However, the likely benefits of interlocutory review do not

outweigh the inefficiency, disruption, and probable costs. Thus, interlocutory

review will not serve the interests of justice.

          (14) Reliance on well-established federal precedent, or application of a recent

Delaware Supreme Court decision, are not the type of questions of law resolved for

the first time in Delaware that warrant interlocutory appeal as a matter of right. The

Court finds that the Opinion does not conflict with the decisions of other Delaware

trial courts. Interlocutory appeal clearly will not terminate the litigation.

          THEREFORE, the State has failed to demonstrate that any of the eight

criteria set forth in Delaware Supreme Court Rule 42(b)(iii) require that the Court

exercise its discretion to certify interlocutory appeal. The State of Delaware’s

Application for Certification of Interlocutory Appeal is hereby DENIED.

Defendants’ Conditional Cross-Application for Certification of Interlocutory Appeal

is hereby DENIED.

          IT IS SO ORDERED.

                                               /s/ Mary M. Johnston
                                          The Honorable Mary M. Johnston

4
    Supr. Ct. R. 42(b).

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