Supreme Court case could crimp states’ ability to sue oil and gas firms over climate change

Supreme Court justices will hear arguments next week in a landmark case that could determine whether states can sue oil and gas companies for climate change.Although a decision in the case, Suncor Energy v. County Commissioners of Boulder County, isn’t expected until next year, the Oct. 5 arguments will provide insight into how aggressively the conservative-leaning court could rule.The justices have been asked to determine whether states and localities have the ability to sue fossil fuel companies for damages caused by the effects of climate change, or whether federal law precludes such lawsuits. What’s driving the lawsuit In early 2018, Boulder County, Colorado, filed a lawsuit against oil major Exxon Mobil and Suncor Energy, accusing the companies of public and private nuisance, trespassing, unjust enrichment, and civil conspiracy related to their alleged contributions to climate change in the state.Boulder County accused the fossil fuel companies of deceiving the general public about the dangers of their oil and gas operations and the associated greenhouse gas emissions through their advertising and marketing. Using state tort laws, officials are seeking compensation for climate-related injuries caused by rising temperatures and extreme weather.Last year, the Colorado Supreme Court allowed the lawsuit to continue in state court.The oil companies are looking to stop the suit before it gets too far, and have asked the justices to overturn the state Supreme Court’s decision and prevent the lawsuit from going to trial.A ruling in favor of Boulder would not automatically force Suncor and Exxon to pay the state localities climate-related damages, as the case would still need to continue to trial. It would, however, pave the way for other states and municipalities to file similar lawsuits against oil and gas companies to seek compensation for greenhouse gas emissions. Even such a ruling, though, likely would not establish that other similar suits are legally sound.A ruling in favor of the fossil fuel companies would most likely halt numerous similar climate lawsuits already up for consideration across the country and make it more difficult for state governments to pressure oil and gas developers to limit their emissions.That will largely depend on how narrow the court decides to rule, if it decides to issue a ruling.Ruling without a trial When the Supreme Court agreed to hear Suncor v. Boulder, the justices said they would also consider whether the high court had the right to hear arguments in the first place.That decision stems from an argument by the Colorado localities that the high court does not have jurisdiction to hear the case because no final judgment has been made by the local courts.It is not unprecedented for the Supreme Court to hear and rule on a case before final judgment, but it is rare. Given this, it is possible that, following the Oct. 5 hearing, the justices decide it is too early to issue a ruling and send the case back to the lower courts for trial.Alejandro Camacho, a professor at UCLA’s School of Law with a focus on environmental law, said the type of claims Boulder is bringing against the companies could influence the justices’ ruling on this question.“They’re bringing state claims, nuisance and deception and such,” he told the Washington Examiner. “Clearly, those are the kinds of things that a lower state court would look at.”Preempted by federal law Suncor and Exxon claim that by attempting to collect damages from the oil and gas companies, Boulder County is influencing national energy policy and, as such, its claims are preempted by federal law and should be considered invalid.The fossil fuel companies have argued that state and local governments like Boulder are seeking to use the courts to reduce greenhouse gas emissions. And as effects of climate change, such as emissions, cross state borders, they argue that Boulder is illicitly trying to impose its “preferred policy of limiting emissions across the Nation.”The companies argue that the local claims are preempted by federal laws such as the Clean Air Act.Camacho said several of Boulder’s claims can be considered emissions-based, such as those related to nuisance and negligence, as they allege that Suncor and Exxon’s products directly contributed to climate-related harms that damaged public property.However, the deception-based claims — regarding what the companies did not tell the public through advertising — are less obvious.“The Clean Air Act clearly doesn’t say anything about that,” he said. “The Clean Act clearly is not about regulating corporate honesty and advertising, or … concealing of risks.”Even if the high court were to rule specifically that emissions-based claims are preempted by federal law, Camacho said, that could still allow Boulder’s case to move forward, as many of its claims are focused on deception.While oil companies have argued that the Clean Air Act preempts state law, it’s worth pointing out that the Trump administration may have made the case more complicated by rolling back federal rules on emissions.Earlier this year, the administration rescinded the 2009 Endangerment Finding, claiming the Clean Air Act does not give the Environmental Protection Agency authority to regulate greenhouse gas emissions.In a brief, however, Suncor and Exxon argue that management of interstate and international greenhouse gas emissions lies with the federal government, not with the states.The Department of Justice also argued in a brief in support of the companies that the federal government alone is able to bring about any action regulating interstate emissions.“They basically are disclaiming the ability to regulate greenhouse gases under the Clean Air Act, but at the same time…the companies are trying to argue that basically the Clean Air Act preempts regulation of greenhouse gases under state law,” Camacho said. “To me, it’s quite a ridiculous argument. It’s basically the government is arguing EPA can’t regulate greenhouse gases,” he continued. “And at the same time, the state common law can’t compensate for the harm from greenhouse gases.”Not about climate change There is widespread agreement that, regardless of which argument one might support, the case itself is not one about climate change or a state’s ability to mitigate climate change.Michael Buschbacher, a partner at the law firm Boyden Gray, said states do now and will still have authority over mitigating climate change and greenhouse gas emissions within their own borders.The question, he said, is whether state governments can impose billions of dollars of liability retroactively, and beyond state lines.“There’s not a state right for Texas to tell, you know, California how it’s going to regulate,” Buschbacher told the Washington Examiner. “There’s not a state right for Florida to tell Illinois … here’s how you’re going to approach, you know, vaccines or whatever. That’s the kind of issue. It’s like — states have authority, a lot of authority within their borders, but the idea that you can then reach out globally is, I think, just insane.”Green groups such as the Sierra Club have pointed to the importance of climate change in this case, as Colorado has been subject to a series of extreme weather events over the last 10 years.Margaret Kran-Annexstein, director of the Sierra Club’s Colorado chapter, said that devastating flooding hit the state in 2013, causing damage worth nearly $4 billion. Similarly, the Marshall Fire in 2021 caused more than $2 billion in damage.Given these disasters, she rejected the argument that Boulder is overreaching in its pursuit for damages.“To say that it’s an overreach is to deny the fact that Boulder is feeling the impacts of climate change here and now, and they are asking for damage compensation for a mess that Big Oil made,” Kran-Annexstein said. “They’re not trying to do anything more than ask for compensation for the challenge, the real financial hardships that people in Colorado and the city of Boulder are facing.”Down one justice In the days leading up to the scheduled arguments, the case received widespread attention after Justice Samuel Alito recused himself under pressure from environmental and climate-adjacent groups because of his investments in oil and gas companies.“Taking into account the particular arguments that were made on both sides here, I thought that recusal was the prudent step,” Alito told Bloomberg Wednesday.Recent financial disclosure reports show that Alito holds stock in companies such as ConocoPhillips and Phillips 66. While those companies are not named in the Boulder case, they are named as defendants in similar climate lawsuits filed across the country, suits that very likely would be affected by the high court’s ruling.Alito said he was not required to recuse himself and that the energy shares in question were inherited by his wife.SAMUEL ALITO RECUSES HIMSELF FROM MAJOR SUPREME COURT CLIMATE CHANGE CASEHis recusal means the oral arguments in early October will include only the other eight justices, leaving open the possibility of a deadlock decision.If the Supreme Court reaches a 4-4 split, the lower court’s ruling would remain in place, and it would be as if the high court never took up the case for oral arguments in the first place, allowing Boulder to take its claims to trial.