The dispute centers on 42 suits filed in 2013 by Plaquemines Parish and other Louisiana parishes against oil and gas companies under the State and Local Coastal Resources Management Act. The parishes alleged that the companies lacked permits for coastal zone uses and that some operations, though initiated before 1980, were illegally commenced and thus not exempt from the permitting program.
An expert report filed by the parish targeted Chevron's crude-oil production during the Second World War. The report alleged that Chevron failed to use steel tanks, used vertical-drilling methods that harmed the environment, and relied on canals instead of roads. The parishes argued these practices showed bad faith and caused marshland contamination.
Chevron removed the suit to federal court, arguing the lawsuit related to its contractual duties to refine crude oil into aviation gasoline for the U.S. military. The District Court rejected this argument and granted the parish's motion to remand to state court. The Fifth Circuit affirmed, concluding that because Chevron's refining contract did not specify how to acquire crude oil, the production activities were not related to its federal duties.
Justice Thomas, delivering the opinion of the Court, held that Chevron plausibly alleged a close relationship between its challenged crude-oil production and the performance of its federal avgas refining duties. The Court noted that much of the crude oil produced in the Delta Duck Club field was used for Chevron's own avgas refining.
The Court explained that the phrase "relating to" sweeps broadly. One thing can relate to another even if the connection is "indirect," even if it was "not specifically designed to affect" it, and even without a "strict causal relationship." The ordinary meaning of the statute requires a connection that is not "tenuous, remote, or peripheral." The Court found that the suit implicated Chevron's wartime efforts to produce and supply avgas's essential feedstock.
The Court disagreed with the Fifth Circuit's reasoning that the government's allocation of crude oil severed the relation between producing and refining. The Court analogized to preemption law, noting that an act can relate to its consequences even when the causal chain includes actions by intermediaries.
The Court also disagreed with Louisiana's argument that the removal statute requires the defendant to have been "acting under" a federal officer in taking the specific actions challenged. The Court held that this interpretation would impermissibly conflate the "acting under" and "for or relating to" elements of the federal officer removal test, leaving the "relating to" requirement with little, if any, independent function.
The judgment of the Fifth Circuit was vacated and the case remanded for further proceedings consistent with this opinion. Justice Jackson concurred in the judgment, arguing that the statute requires a causal nexus, which she found Chevron satisfied. Justice Alito took no part in the decision.