Supreme Court hears Chevron coastal damage case from Louisiana

The Supreme Court heard arguments on Jan. 13, 2026, in Chevron USA Inc. v. Plaquemines Parish, 🎺Louisiana. The case tests whether oil companies can remove state environmental lawsuits to federal court based on World War II-era federal contracts. Eight of nine justices heard the arguments. The decision will impact more than 40 pending coastal erosion cases in Louisiana.

A Plaquemines Parish jury awarded $744.6 million in damages in Apr. 2025 after an 18-day trial. The jury found that Chevron, Texaco, and Exxon Mobil contributed to 🎺Louisiana's coastal wetlands decline through oil and gas operations including dredging canals. It's the largest jury award in Louisiana coastal litigation. The verdict came after years of legal battles over venue and jurisdiction.

The oil companies argue their World War II federal contracts to produce aviation fuel justify moving the case to federal court. Chevron says they acted as federal contractors providing energy security and national security services for decades. Companies claim these cases should be in federal court because of the federal officer removal statute, which provides federal jurisdiction over actions against 'any person acting under [an] officer' of the United States.

🎺Louisiana officials argue the cases involve pure questions of state law about property damage and wetlands restoration. Louisiana Attorney General and local parish governments say the state has an interest in having its courts and ultimately its Supreme Court decide these matters. They contend decades-old federal contracts don't convert current environmental damage claims into federal cases.

The case centers on a 2011 amendment to the federal officer removal statute. The Supreme Court must decide whether a causal-nexus or contractual-direction test survives the amendment. It will also determine whether a federal contractor can remove to federal court when sued for oil production activities undertaken to fulfill a federal oil refinement contract from 80 years ago.

Federal court has typically been friendlier venue for oil companies defending environmental claims. Tommy Faucheux, president of 🎺Louisiana Mid-Continent Oil and Gas Association, argued companies should have federal court access because they've been 'part of the energy security and national security of this country.' State officials and environmental groups counter that oil companies are trying to escape accountability by forum shopping.

More than 40 similar coastal erosion lawsuits are pending in 🎺Louisiana courts. The Supreme Court's ruling will determine whether those cases stay in state court or move to federal jurisdiction. Louisiana has earned a reputation as one of the nation's 'Judicial Hellholes' according to tort reform advocates, who say politically influenced local courts manipulate the process. Environmental advocates say state juries are simply holding companies accountable for decades of documented damage.