Background
In March 2024, the City of Chicago sued fourteen fossil fuel extraction, refining, and distribution companies in Illinois state court, alleging products liability, negligence, nuisance, unjust enrichment, consumer fraud, and misrepresentation. Chicago claimed that defendants understood the climatic effects of burning fossil fuels but intentionally concealed and misrepresented those effects, deceiving consumers and the public. As a result of this alleged disinformation campaign, Chicago contended that consumers used more fossil fuel and used it less efficiently than they otherwise would have, causing the city to suffer damages including heat-related deaths and illness, degraded air quality, increased electricity costs, sewage overflows, water contamination, transit disruptions, shoreline erosion, and property damage.
Critically, Chicago disclaimed any injuries arising from federal property or from defendants’ provision of military and national defense fuel products to the federal government, expressly disclaiming recovery for such injuries. The complaint’s theory of liability sought damages only for harm attributable to increased fuel consumption caused by the defendants’ alleged misrepresentations to consumers and the public.
Defendants removed the action to federal court under 28 U.S.C. § 1442(a)(1), the federal officer removal statute, arguing that they had performed substantial work for the federal government over the past century: World War II and Korean War-era military fuel production, Cold War-era specialized fuel contracts, ongoing military supply contracts, management of the Strategic Petroleum Reserve since the 1970s, and federal leases for oil extraction on the Outer Continental Shelf and federal lands. The district court remanded to state court, and defendants appealed.
The Court’s Holding
The Seventh Circuit affirmed the remand, holding that defendants’ federal work was too attenuated from Chicago’s claims to satisfy § 1442(a)(1)’s requirement that the suit be “for or relating to” acts performed under color of federal office. Under recent Supreme Court guidance in Chevron USA Inc. v. Plaquemines Parish (2026), the statute requires a “connection” between the conduct at issue and federal duties, but that connection must be more than “tenuous, remote, or peripheral.” The court concluded this suit failed that test.
The court identified multiple fatal disconnections. Defendants’ most significant federal work—World War II and Korean War-era military fuel production—occurred decades before the alleged misinformation campaign, which allegedly began in the 1970s. Even defendants’ more recent federal work, including Cold War military contracts, current military fuel supply, and federal resource leases, bore insufficient relationship to Chicago’s claims of deceptive consumer advertising. Critically, nothing in Chicago’s complaint alleged that the misrepresentations targeted the federal government, involved federal fuel work, or induced the government to increase its own fuel purchases.
The court emphasized that Chicago’s express disclaimer of injuries from federal property and military fuel provision was binding and “ensured that the sum the City hopes to recover is independent of the defendants’ federal work.” Additionally, if an Illinois state court enjoined defendants from false advertising about fossil fuels, defendants’ federal work could continue unimpeded—a strong indication that the suit did not relate to federal operations in the statutory sense. The court noted that every circuit to consider similar climate-deception suits had reached the same conclusion, and the Supreme Court had recently cited two such decisions with approval.
Key Takeaways
- States and municipalities may pursue climate deception claims against fossil fuel producers in state court despite defendants’ historical and ongoing work for the federal government.
- § 1442(a)(1) removal requires a meaningful, non-attenuated connection between the specific conduct challenged and federal duties; temporal distance and subject matter divergence defeat removal even with substantial prior federal involvement.
- A plaintiff’s express limitation of damages to injuries independent of defendants’ federal work strengthens the remand analysis and binds the plaintiff in litigation.
- Test for federal operations interference: if enjoining the challenged conduct would not compromise defendants’ federal work, removal is inappropriate under § 1442(a)(1).
Why It Matters
This decision establishes clear boundaries on the federal officer removal statute in climate-deception litigation. It blocks a potentially sweeping defense strategy—that any lawsuit against a fossil fuel company with historical federal contracts belongs in federal court. By requiring a meaningful connection between the specific tortious conduct and federal duties, the court allows municipalities and states to litigate climate deception claims in state court. The decision is reinforced by the Supreme Court’s recent guidance in Plaquemines Parish and unanimous circuit precedent, suggesting this framework will survive appellate scrutiny.
The practical effect is to clear the path for state and local climate litigation to proceed in state courts, where juries and judges may prove more receptive to climate accountability theories. The decision does not foreclose defendants’ right to seek federal removal on new theories as litigation develops (if subsequent pleadings reveal new factual bases), but it sets a high bar for removal based on attenuated federal work. For fossil fuel defendants, it narrows an important jurisdictional safe harbor.