US Supreme Court nixes challenge to state climate suits against oil firms

By Nate Raymond

(Reuters) -The U.S. Supreme Court rejected on Monday a bid by 19 Republican-led states led by Alabama to block five Democratic-led states from pursuing lawsuits accusing major oil companies of deceiving the public about the role fossil fuels have played in causing climate change.

The justices declined to hear a case that was filed directly with the Supreme Court by Republican state attorneys general that took aim at cases brought in various state courts against companies including Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Shell (LON:SHEL) and BP (NYSE:BP). Those lawsuits were pursued by California, Connecticut, Minnesota, New Jersey and Rhode Island.

Justice Clarence Thomas, in a dissenting opinion joined by fellow conservative Justice Samuel Alito, said the court lacked any persuasive justification "to reject a suit involving nearly half the states in the nation, which alleges serious constitutional violations."

While nearly all the cases heard by the Supreme Court are appeals of rulings by lower courts, the top U.S. judicial body has "original jurisdiction" in a small set pitting states against states. Thomas called the court’s frequent pattern of declining to hear such state-versus-state cases troubling.  

The suits by the Democratic-led states, seeking monetary damages, generally accused the energy companies of creating a public nuisance or violating state laws by concealing from the public for decades the fact that burning fossil fuels would lead to climate change. The companies denied wrongdoing.

The 2024 litigation led by Republican Alabama Attorney General Steve Marshall was joined by his counterparts in Alaska, Florida, Georgia, Idaho, Iowa, Kansas, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, West Virginia and Wyoming.

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They argued that by suing major energy companies in state courts and seeking damages for the harms of climate change, the Democratic-led states were unlawfully trying to regulate global emissions and the U.S. energy system.

Only the federal government can regulate interstate gas emissions, and the Democratic-led states have exceeded their authority by seeking "sweeping injunctive relief or a catastrophic damages award that could restructure the national energy system," the Republican-led states argued.

Marshall said he was disappointed in the Supreme Court’s decision to reject the case.

"States like California have benefited tremendously from traditional energy, yet they are now trying to impose crippling liability on companies for actions they took in Alabama and the rest of the world. The Constitution does not grant California such powers," Marshall said. 

Minnesota Attorney General Keith Ellison in a statement said he was glad the court saw through what he called "an attempt to run interference, help the defendants in our cases avoid accountability, and play politics with the Constitution."

The Supreme Court, which has a 6-3 conservative majority, has rejected several attempts by the oil companies themselves to dismiss various climate change cases by state and local governments or move them to federal court.

For instance, the Supreme Court on Jan. 13 declined to hear a bid by Sunoco and other oil companies to scuttle a lawsuit by Honolulu after the Hawaii Supreme Court allowed the climate change case to move forward.

Democratic former President Joe Biden’s administration in 2024 argued that the Supreme Court should skip hearing both the industry’s Honolulu case appeal as well as the lawsuit by the 19 Republican-led states.

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Republican President Donald Trump’s administration is expected to oppose such lawsuits going forward. The Trump campaign ahead of the 2024 election pledged to "stop the wave of frivolous litigation from environmental extremists."

The Democratic-led states, led by California Attorney General Rob Bonta, in a filing called the Republican case against them "meritless" and said it rested on a misunderstanding of their climate change lawsuits.

They argued the lawsuits did not seek to impose liability on oil companies based on their fossil fuel production generally but instead sought to "address local harms resulting from unlawful deceptive conduct by private defendants."

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