The Supreme Court heard arguments Monday on the fate of a lawsuit filed by a Louisiana parish against multiple oil producers over damage to the state’s coastline, marking the high court’s first oral arguments of 2026.
The matter before the justices is over whether to move the case to federal court, but the ruling in Chevron USA v. Plaquemines Parish will have wider ramifications for efforts to sue oil producers over damage to state coastlines. In state court, a jury ordered Chevron to pay a $745 million judgment to the Louisiana residents for damage related to oil production. If the case is allowed to move to federal court, that judgment could be tossed.
Lawyers for Chevron and other oil companies sued by the parish are pushing for the lawsuit to move to federal court. They claim that because the oil companies were contracted to produce oil for the government from the Gulf of America during World War II, there is “a close and direct connection between the challenged oil production and refining activities taken under federal direction.”
Paul Clement, the lawyer arguing for the oil companies at Monday’s arguments, faced sharp questions from the justices over whether the companies have met the standard to move the case to federal court. Justice Brett Kavanaugh questioned Clement on the companies’ reasoning, specifically regarding the strength of their arguments that the state court system wasn’t sufficiently fair to them.
Clement responded by noting that the coastline case involves “issues that are nationally important but locally unpopular,” arguing that “those are the times when it’s most important to be in federal court.”
“If they can prove their case in federal court, then everybody’s going to accept the outcome, and they’re not going to view it as something that’s a product of local prejudice,” Clement said of the oil companies.
Louisiana Solicitor General Benjamin Aguiñaga, arguing for the parish, also faced questions over why the venue for the legal dispute matters. Justice Clarence Thomas asked Aguiñaga what the practical difference between resolving the lawsuit in state court versus federal court would be.
“We have the same reasons for wanting to be in state court that anybody who sues under state law wants to be in state court. We want the actual experts interpreting state law, especially when we get to the Louisiana Supreme Court, on an important statute like this, and especially with respect to a problem that is so sweeping in scope,” Aguiñaga told the high court.
Justice Samuel Alito announced on Thursday that he would recuse himself from the case, meaning that it will be decided by eight justices and could end in a 4-4 deadlock.
Alito said he recused himself “because of a financial interest in ConocoPhillips, the parent corporation for Burlington Resources Oil and Gas Company,” which remained a party at the district court level despite having previously said that it had withdrawn from the case at the Supreme Court. In the event of a deadlock, the lower court’s ruling stands.
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The high court is expected to release its ruling in the case by the end of June.
Oral arguments at the Supreme Court continue on Tuesday, when all nine justices will be on the bench to hear arguments in a pair of cases challenging the legality of state laws that limit women’s sports to biological females.