Supreme Court to Weigh In on Climate Change Lawsuit Against Oil Companies

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

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Summary

The U.S. Supreme Court has agreed to hear a lawsuit about whether federal law preempts state law in climate change litigation involving three oil companies. The case is scheduled to be argued in the high court's term that begins this October.

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Oil Companies Face Many Climate Change Lawsuits

Oil and gas companies have been sued in at least two dozen climate change cases filed by states and cities over the last five years, in jurisdictions ranging from Maine, Maryland and Puerto Rico to California, Oregon and Hawaii, according to a database of climate change litigation maintained by The Sabin Center for Climate Change Law at Columbia Law School. Typically, the states and cities allege the companies engaged in some form of misrepresentation or concealment regarding the climate impacts of fossil fuel products, leading to billions of dollars of climate change damages.

The oil and gas industry has long battled what it called "nuisance" lawsuits over climate change. The American Petroleum Institute, in its 11-point agenda for "affordable, reliable and secure American energy," released earlier this year, called for "protect(ing) U.S. energy producers and consumers from abusive state climate lawsuits ... that bypass Congress and threaten affordability." For more on that, see January 13, 2026, article - Venezuela, Permitting Reform Top U.S. Oil & Gas Priority List.

Now, the industry will get its day in court. Last month, the U.S. Supreme Court agreed to hear an appeal filed by three energy companies--Suncor Energy U.S.A. Incorporated, Suncor Energy Sales Incorporated and Exxon Mobil Corporation--that asked the high court to reverse a 2025 ruling by the Colorado Supreme Court that Boulder County, Colorado, and the City of Boulder, Colorado, were entitled to sue the oil companies to recover billions of dollars in damages caused by the combustion of hydrocarbons produced by those companies. The oil companies sought Supreme Court intervention even though the original case is still underway in Colorado State Court.

The U.S. Supreme Court said it would hear arguments over whether federal law precludes state-law claims seeking relief for injuries allegedly caused by the effects of interstate and international greenhouse-gas emissions on the global climate. The high court added that it also would hear arguments on "whether this Court has statutory and Article III jurisdiction to hear this case."

Oral arguments in the Supreme Court case will be heard in the term that begins this October. In a ruling last May, the Colorado Supreme Court rejected claims by oil companies that state-level litigation was preempted by federal law, allowing the lawsuit to proceed in a district court. In that lawsuit, Boulder County and the City of Boulder are seeking unspecified damages running into the billions of dollars for local harms caused by climate change that has been accelerated by the burning of oil and natural gas produced by the named oil companies.

Claims and Counter-Claims

The oil companies have been joined by several powerful interests, including the American Petroleum Institute; U.S. Department of Justice; the National Association of Manufacturers; the U.S. Chamber of Commerce; conservative lawyer John Yoo; tort lawyer Richard Epstein, who teaches at New York University law school; and U.S. House of Representatives Majority Leader Steve Scalise, along with 102 House members.

They claim Boulder County and the City of Boulder can't sue the oil companies because, among other reasons, federal law trumps state law and global warming is an international issue that necessarily involves foreign policy, which is exclusively the power of the federal government.

In his court filing, Scalise summarized the issue this way: "In recent years, multiple state and local governments have launched a courtroom war against the American energy industry. Unhappy with national energy policy that--in their view--has not moved quickly enough to replace fossil fuels, they attempt to wield state law and state court judgments to pursue crushing penalties against American oil and gas companies for harms allegedly caused by global greenhouse-gas emissions on the global climate."

In their joint filing, Yoo and Epstein said Boulder County and the City of Boulder were seeking to "set nationwide climate policy, all in violation of sound tort principles."

Boulder County and the City of Boulder said the case is not yet ripe for Supreme Court review, as the litigation remains underway in a lower Colorado court. The court will hear arguments on that issue.

In their filing, Boulder County and the City of Boulder also slammed "the latest version of their ever-evolving and mutually inconsistent preemption theories" advanced by the oil companies.

In statement accompanying their Supreme Court filing, Boulder County Commissioner Ashley Stolzmann said, "The oil companies have tried every avenue to delay our climate accountability case or move it to an out of state court system."

Boulder Mayor Aaron Brockett added, "Local communities are living with the mounting costs of climate change. The Supreme Court should affirm Colorado's right to hold these companies accountable for the harm they have caused in Colorado."

Key Takeaways

• In its next term, beginning in October, the U.S. Supreme Court will hear a case on whether federal law preempts state or local law on recovery of climate change damages worsened by the burning of oil and natural gas.
• Oil companies are seeking to reverse a May 2025 ruling from the Colorado Supreme Court that Boulder County, Colorado, and the City of Boulder, Colorado, were entitled to sue the oil companies to recover billions of dollars in damages caused by the combustion of hydrocarbons produced by three named oil companies.
• The actual litigation is continuing in Colorado.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).