Boulder and a few other local governments in Colorado are suing Suncor USA and ExxonMobil in state court, trying to hold the two companies legally liable for causing climate change and make them pay for infrastructure improvements in these localities. This lawsuit is part of a coordinated national litigation campaign, with about two dozen similar lawsuits filed around the country—all by state and local governments that name different combinations of companies that sell Americans the energy we need.
The two companies targeted in the Boulder case filed a petition with the U.S. Supreme Court in June asking the Court to decide two major questions implicated by the litigation: 1) whether the claims are inherently federal common law claims and not state law claims at all and 2) where the cases should be heard—federal or state court. The Supreme Court held in American Electric Power v. Connecticut (AEP) in 2011 that climate litigation raises interstate emissions and energy policy matters that are of “special federal interest.” The local governments want the cases in state court where, as the Wall Street Journal explained, they hope to side-step this Supreme Court precedent and convince local courts to award them monetary damages while, at the same time, advance the plaintiffs’ preferred energy policies.
All eyes are on the Supreme Court, as it considers whether to grant the companies’ petition. The National Association of Manufacturers filed an amicus brief with the Court, urging the Court to take up this case. Here are some key background points about this petition and litigation campaign:
1. Although the local governments have packaged their lawsuits creatively under state law, the claims in the lawsuits are inherently federal because of the global issues they raise. Climate change is not only interstate, but global in nature, which is why this litigation implicates federal questions and complex policymaking. The Supreme Court stated in AEP that claims related to emissions policy are “of special federal interest” and that “borrowing the law of a particular state would be inappropriate.” The Court then held that Congress displaced federal common law in this area when it enacted the Clean Air Act and delegated authority to the EPA to regulate greenhouse gas emissions.
The Courts of Appeal, including the Tenth Circuit in the Boulder case, erred in ruling that Congress’s delegation of these matters to the EPA somehow undermined the federal common law nature of these claims and therefore makes them suitable for state courts. By contrast, the U.S. Court of Appeals for the Second Circuit, in dismissing New York City’s climate lawsuit last year, explained that local governments should not be able to circumvent AEP by creatively packaging cases under state law: “We are told that this is merely a local spat about the City’s eroding shoreline, which will have no appreciable effect on national energy or environmental policy. We disagree. Artful pleading cannot transform the City’s complaint into anything other than a suit over global greenhouse gas emissions.” This case is simply “beyond the limits of state tort law.”
2. Ultimately, deciding how to address climate change and its impacts are legislative and regulatory questions, not liability questions for courts at all. Climate change is a by-product of modern society and needs to be meaningfully addressed, and these state law claims are ineffective at addressing this broad, global challenge. State courts cannot effectively assess the many causes of climate change or the many factors that go into setting national and international energy and climate policies—particularly affordability for families and businesses and energy and national security interests.
Affordability: The architects of the litigation have repeatedly said they want to use this litigation to make energy significantly more expensive. By imposing costs on energy production and use, their goal is to “raise the price” of fuel so the effects of climate change will “get priced into” the gas and electricity American families and businesses use every day. It is their way of holding “consumers responsible” for climate change. This is the wrong path. To be clear, this litigation will not do anything to address climate change; it will just make energy more expensive for American families and businesses. We need policies that advance affordability with global climate action.
Energy security: These lawsuits seek only to make American, Canadian and European energy companies pay—not Chinese, Russian and other state-owned energy companies. As recent events have demonstrated, this approach directly interferes with efforts to increase domestic energy, support our allies, and advance cleaner energy sources.
3. Climate litigation does not offer any solutions—globally or locally. This litigation will not generate new technologies or solutions, but it will distract businesses and local communities from doing so. It also will pit some communities against others, which is why more than 15 state attorneys general have objected to this litigation. As they explained in their briefs in these cases, the localities and other governments suing the energy industry are using these lawsuits as political tools to “export their preferred environmental policies and their corresponding economic effects on to other states.” They are concerned these lawsuits will hurt efforts in their own communities to address climate impacts by limiting their options and draining resources.
For communities looking for financial assistance to address impacts of climate change in their local communities, there are much better and faster ways to get these resources than engaging in this litigation gambit. Specifically, there are federal and state programs—including in the recent legislation signed by President Biden—that are already making funds available to facilitate real climate action and more resilient communities.
4. The Court should grant the petition in the Boulder case because the issues presented in it are critical to resolving the dozens of other pending state claims and resolving the circuit split in whether the claims are inherently federal. One way or another, these cases are likely to end up at the Supreme Court, which has already taken review of climate litigation twice, siding with the defendant companies both times. Yet, more climate lawsuits are being filed. As a matter of saving both time and resources, the Court should provide guidance on where these cases should be heard and whether these cases are appropriate for the courts at all.
The Supreme Court reconvenes at the end of September and is likely to announce whether it will grant the petition for review in the coming weeks.