Municipalities have been trying for decades to hold energy companies accountable for their role in the climate change crisis. In an effort to prevent suits, these companies are pushing the novel legal theory that federal common law provides a basis for jurisdiction in federal court over these claims. Once in federal court, the defendants argue that the very federal common law that served as the basis for removal has been displaced by the Clean Air and Clean Water Acts. This would then justify dismissal of the entire case for failure to state a claim. Luckily for the plaintiffs, nearly all the Courts of Appeals have rejected this theory, finding that removal on federal common law grounds is improper and remanding to state courts. But herein lies the problem. On remand, nothing stops the state courts from adopting the defendants’ theory. Essentially, the defendants are permitted to relitigate their preemption argument after a federal court holds that federal law does not apply.
This Note argues for the adoption of a new rule of preclusion that would apply in these cases. Where a federal court determines that federal law does not cover the claims, that judgment should have issue preclusive effect in a subsequent state court proceeding on an ordinary preemption defense. This is because a finding of no jurisdiction by a federal court necessarily entails a finding that federal law does not cover, and thus preempt, the state law claims. This rule would serve to simultaneously preserve the balance of federalism, keeping state claims in state courts and allowing only federal claims in federal courts, as well as preventing dismissals on inconsistent judgments. This rule would also preserve a fundamental notion of justice in the American legal system; it would allow the climate tort plaintiffs to finally have their day in court.
