The US Supreme Court is considering whether to hear a lawsuit that could have significant adverse implications for America’s energy and climate policy over the next decade.
The lawsuit, filed by Boulder, Colo. in state court, is part of a national effort to blame climate change on energy companies by making them legally responsible for climate-related infrastructure projects.
The petition for review was filed by the two energy company defendants in the case, Suncor Energy Inc. and ExxonMobil Corp.
The Supreme Court is seeking the Biden administration’s input on whether it should review the jurisdictional question at issue: Can state courts make these decisions, or do questions over causes and impacts of climate change arise under federal law and must they go to federal court? This question is central to the litigation.
The local governments are hoping their state courts will be more likely to allow the cases to go forward.
Climate change is a critical national and international issue, and these cases belong in federal court. The climate issues they raise involve inherently federal questions best handled by Congress and federal agencies.
Previous White House Opposition
Lawsuits blaming climate change on the energy industry have been around for 20 years, with the court weighing in twice. First was American Electric Power v. Connecticut in 2011, when states sued utility companies for climate change. That was followed by BP v. Baltimore in 2021, which like the current case, seeks to impose state law liability for climate impacts on energy producers.
Both the Obama and Trump administrations opposed the lawsuits, and their reasons apply equally here.
As President Barack Obama’s solicitor general said in his brief on behalf of the US, climate change is “a result of the actions of innumerable sources of various kinds of emissions from around the world over many decades” and impacts nearly everyone. It is “impossible to consider the sort of focused and more geographically proximate effects” raised in climate litigation.
Also, there would be “almost unimaginably broad categories of both potential plaintiffs and potential defendants,” making the question of who to blame “capacious.”
The Obama administration also explained that the litigation raises energy and climate policies “more appropriately addressed by the representative branches of government.”
In the Boulder case, the advocates behind the litigation acknowledge their motive is to advance their preferred climate policies. They want to raise the price of oil and gas by pricing the cost of climate mitigation into these energy sources.
Federal Issues Best Left to Congress
But deciding whether there should be a carbon penalty, how much it should be, and how funds should be spent is the purview of Congress and regulators, not state courts.
The court in American Electric Power echoed the Obama administration’s concerns in a unanimous decision by Justice Ruth Bader Ginsburg. From a legal perspective, the court held the federal common law causes of action had been displaced by Congress’s enactment of the Clean Air Act.
But the court also explained the institutional deficiencies with courts setting emissions policies, saying these are issues within an area of “national legislative power.” The court added that Congress and the Environmental Protection Agency are “better equipped to do the job than individual district judges issuing ad hoc, case-by-case” decisions.
Lawsuit Circumvents Precedent
Boulder’s lawsuit is a bald attempt to circumvent this ruling. The groups openly repackaged the litigation because, in their words, they still believed “the courts offer the best current hope” for imposing their policy priorities. So they filed their claims in state courts, hoping to find a court that would sidestep the Supreme Court’s ruling.
The Obama administration’s predictions have come true. About 25 of these lawsuits have been filed, and they name various combinations of energy companies. Some target a single company, while others name up to 40 energy sellers.
The claims are also not unique to any community, abandoning any “geographic nexus” the Obama administration said is generally required “between those liable and those injured.” The litigation also has led to highly politicized campaigns geared at recruiting government plaintiffs and vilifying the companies.
The first question for the courts is whether the lawsuits are actual state law claims. In BP v. Baltimore, the Supreme Court heard a procedural question over the scope of appellate review of the defendants’ arguments that these claims invoke inherently federal interests and so the cases must be sent to federal court.
The then-solicitor general filed a brief saying the review should be broad. The brief also said the claims belong in federal court, noting that the American Electric Power decision did not open the door for “tort claims based on the common law of an affected State.”
The Supreme Court agreed to broaden the scope of review, but it did not decide the question of whether the claims must go to federal court.
Biden at a Crossroads
That brings us to Boulder’s case and the question for the Biden administration. The solicitor general is in a tight spot. Proponents of the litigation know that climate is a priority for Biden, but that does not mean it is in his interests to yield federal authority over national climate and energy policy to state courts.
Given global challenges around energy availability and cost, supporting litigation intended to raise the price of oil, gas, and other energy sources would seem to contradict the administration’s affordable energy objectives. The litigation also counters Biden’s energy security efforts by seeking money from American, Canadian, and European companies—not China, Russia, and other nations’ producers.
Although these cases are painted with a state law veneer, the claims are national and international in scope. Addressing climate change requires leadership—not lawsuits—as well as massive innovation so we can produce and use energy in ways that are affordable and sustainable.
These decisions should not be made in state courts, but under the leadership and checks and balances of the legislative and regulatory branches of the US government.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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Phil Goldberg is special counsel to the Manufacturers’ Accountability Project.