Big Oil Returns to Supreme Court in High-Stakes Boulder Climate Case

By John Kruzel

WASHINGTON, Sept 30 (Reuters) – Major oil companies are again looking to the U.S. Supreme Court for protection from climate-related liability, teeing up a case that could decide the future of dozens of lawsuits filed by state and local governments against the fossil fuel industry.

The justices will hear arguments Monday, the first day of the court’s new nine-month term, in a dispute involving ExxonMobil and Suncor Energy. The companies want to shut down a lawsuit by Boulder, Colorado, officials accusing them of helping drive climate change and misleading the public about the risks of fossil fuels.

The case is the latest example of energy companies asking the justices to block climate liability claims or curb federal environmental regulation. Nearly 60 state and local governments have filed similar suits seeking billions of dollars from fossil fuel companies, Exxon and Suncor told the court, and more are still being filed. A ruling favoring the companies could lead to many of those cases being dismissed.

President Donald Trump’s administration has backed Exxon and Suncor, arguing that federal law bars Boulder’s claims.

“The stakes are enormous here. There are billions of damages that are sought,” attorney Deepak Gupta, a frequent Supreme Court advocate, said during a Georgetown Law preview of the court’s new term. “And the underlying subject here is maybe the most consequential thing we could be litigating.”

Supporters of the oil companies say that if Boulder’s broadest claims are allowed to proceed, states could gain sweeping authority over conduct occurring far outside their borders.

Saikrishna Prakash, a University of Virginia law professor who filed a brief backing the companies, said the consequences would extend well beyond Exxon and Suncor.

“If Boulder can attach liability to these two companies, I think it can attach liability to thousands of others as well,” Prakash said during a case preview hosted by George Mason University’s Antonin Scalia Law School. “Essentially, Boulder claims that Colorado can reach around the United States (and) regulate production everywhere by attaching liability to it.”

Industry track record

Energy companies, trade groups and allied states have built a largely winning record before the justices over the past two decades in cases involving climate liability and the scope of federal environmental regulation.

One key loss came in 2007, when the court ruled that greenhouse gases qualify as air pollutants under the Clean Air Act, the landmark federal anti-pollution law, and that the Environmental Protection Agency has authority to regulate them.

Burning fossil fuels releases greenhouse gases such as carbon dioxide into the atmosphere, trapping heat and raising average global temperatures over time.

The energy sector won a major victory in 2011 when the Supreme Court blocked states and environmental groups from suing under federal law to seek court-ordered cuts in carbon emissions from power companies.

Climate plaintiffs then shifted to lawsuits brought under state laws. Oil companies have repeatedly asked the Supreme Court to block or redirect the growing wave of state-law climate suits.

In a 2021 ruling involving Baltimore, the court sided with BP, Chevron, Exxon and other energy companies on a procedural issue governing appeals over whether climate cases belong in state or federal court. The decision helped companies seeking to move such cases into federal court, generally seen as a more favorable venue for them.

That procedural issue first brought the Boulder case to the Supreme Court in 2023, when the justices left in place a lower court ruling returning the lawsuit to state court. Justice Samuel Alito did not take part in consideration of the case then and has recused himself from the current dispute. Alito owns stock in several oil and gas companies but not Exxon or Suncor, according to his financial disclosure forms.

Monetary damages sought

The Boulder case asks whether federal law precludes certain state-law claims seeking damages for harms allegedly caused by greenhouse gas emissions. The justices also told the parties to address whether the court has jurisdiction to decide the case at this stage.

Boulder’s city and county governments sued Exxon and Suncor in 2018, accusing them of misleading the public about the climatic effects of fossil fuels while continuing to promote and sell their products. The companies deny wrongdoing.

The plaintiffs seek unspecified monetary damages to help cover past and future costs tied to climate change, including infrastructure repairs, environmental damage, emergency management and public health harms.

“Local communities are living with the mounting costs of climate change,” Aaron Brockett, mayor of the city of Boulder, said after the court announced it would hear the case. “The Supreme Court should affirm Colorado’s right to hold these companies accountable for the harm they have caused in Colorado.”

The companies urged lower courts to dismiss the case, arguing among other things that Boulder’s claims intrude on an area governed by federal law and the Clean Air Act. The Colorado Supreme Court rejected those arguments last year, prompting the companies to appeal to the U.S. Supreme Court.

(Reporting by John Kruzel; Editing by Will Dunham)