How Could the Supreme Court Rule in Landmark Climate Change Case?

Written by John Egan for IIR News Intelligence (Sugar Land, Texas)

Summary

On October 5, the U.S. Supreme Court heard a case that looked like the ultimate "all or nothing" lawsuit, where the decision could either potentially bankrupt an entire industry or decisively shut the door on this type of climate-change litigation. A third approach, a "split-the-baby" decision, could give something to both sides, likely would satisfy neither and potentially leave the door open for future lawsuits around climate change.

Potential Implications of Supreme Court Case

The U.S. Supreme Court (SCOTUS) heard oral arguments October 5 in Suncor Energy (U.S.A.) Incorporated, et al. v. County Commissioners of Boulder County, et al., case number 25-170. The case has drawn widespread interest from the energy and environmental communities and beyond.

Both sides have engaged in more than a little catastrophizing about the issues in the case and the court's potential decisions. Oil and gas companies, including petroleum refiners, have claimed an adverse court decision would bankrupt their industry. Those seeking to delay or reverse climate change have asserted not only that the world is effectively on fire and the fuel is being supplied by fossil fuels, but also that oil and gas companies for years knew about, and misrepresented, the effect their products would have on the climate.

Observers said the high court could rule in one of three basic ways:

• It could find for the city and county of Boulder, either in a sweeping or a narrow procedural ruling. This could open the door to several dozen lawsuits that mirror, to one degree or another, Boulder's.
• It could find for the oil and gas companies, again either in a sweeping or a narrow ruling. The energy companies would welcome a broad decision that said federal law, policy and court decisions on climate change, clean air and clean water preempt state-level tort actions, effectively insulating companies from other state-level claims.
• It could split the difference in a mixed ruling, agreeing with the oil and gas companies but leaving the door open for lawsuits filed under different legal venues.

The Perils of Predicting High Court Decisions

Predicting SCOTUS rulings has long been a parlor game for law school professors and lawyers who practice before the court. Until recently, the court under Chief Justice John Roberts has sought to avoid blockbuster rulings in favor of taking smaller steps. But recent court shifts in personnel and ideology has moved the court in a different direction, apparently less concerned about issuing far-reaching decisions on some of the cases it hears.

The Supreme Court-watching website "SCOTUSblog" reported that "it wasn't clear whether a majority of the justices agreed with the energy companies that federal law prohibits Boulder's claims."

In predicting rulings by the court, observers typically rely on questions justices ask of the litigants. But no clear roadmap emerged from the October 5 oral arguments.

That said, here are some of the questions raised by the justices during oral argument:

• Associate Justice Clarence Thomas, and several of other justices, engaged in a prolonged back-and-forth with both sides about whether the court had jurisdiction to decide this case, and under what legal theory.
• Chief Justice Roberts asked Kannon K. Shanmugam, the oil companies' lawyer and a partner at Davis Polk & Wardwell LLP, to concede, and he did, that "there are some situations in which an individual who engages in conduct in State B, causes harm to somebody in State A, can be sued under the law of State A."
• Associate Justice Elena Kagan asked Shanmugam how Boulder's lawsuit differed from prior state tort actions such as against tobacco companies and opioid manufacturers, specifically the liability companies incur when they misrepresented the health dangers of their products.
• Associate Justice Amy Coney Barrett asked Shanmugam about situations where state authority to sue over nuisances is preserved even when the predominant federal laws, policies and court decisions on climate change, clean air and clean water granted primary authority to the federal government.
• Associate Justice Ketanji Brown Jackson noted that the oil companies raised several other federal issues in their Colorado litigation, and asked lawyers for the oil companies if this case was ripe for a SCOTUS ruling. She also asked both sides about the "direct, traceable and particularized effects" of the oil companies' activities. Tort law often turns on tying activities directly to effects.
• Associate Justice Neil Gorsuch asked Kevin K. Russell, a partner at Russell & Woofter LLC and the lawyer for Boulder, if there was anything anomalous about his client applying state law to regulate worldwide conduct by oil and gas companies.
• Associate Justice Brett Kavanaugh asked Russell about the practical consequences of a decision in Boulder's favor, which would include bankrupting oil and gas companies.

This case has an unusual wrinkle: One member of the nine-member court did not participate in the proceedings. A week before oral arguments, the court issued a one-sentence statement that Associate Justice Samuel Alito would not participate in the proceedings. The court did not explain the reasons for Alito's recusal, but it was well-known that he has significant investments in oil and gas companies.

Forbes magazine estimated the judge holds between $175,000 and $545,000 in fossil fuel investments, including shares of oil and gas companies ConocoPhillips Company and Phillips 66, neither of which was part of the litigation.

Alito's recusal set up an unusual situation: the potential for the court to deadlock 4-4, in which case the Colorado litigation on the merits would be allowed to proceed.

A decision is expected before the court's current term ends next June.

Key Takeaways

• The U.S. Supreme Court (SCOTUS) heard oral arguments October 5 in Suncor Energy (U.S.A.) Incorporated, et al. v. County Commissioners of Boulder County, et al., where Boulder asked the court to allow a state-level lawsuit to proceed on the merits.
• The court was asked to sort out a welter of issues, including whether it has jurisdiction in this case and whether federal law, policy and court decisions on climate change, clean air and clean water preempt state-level tort claims alleging misrepresentation of the dangers created by a product, in this case, oil and natural gas.
• Oil companies have claimed that an adverse SCOTUS decision would bankrupt their business.
• Climate groups have claimed that the world is effectively on fire and fossil fuels such as oil and natural gas are the fuel. They also asserted that oil and gas companies knew for decades their products were contributing to a warming of the climate yet misrepresented that.

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