Supreme Court Weighs Climate Lawsuits That Could Bankrupt Oil Companies, Experts Warn

The Supreme Court heard oral arguments Monday in a case that could reshape the legal landscape for the fossil fuel industry and, energy policy experts warn, leave oil companies bankrupt and Americans paying more at the pump. The dispute, Suncor v. Boulder, centers on whether federal law prevents cities and states from suing oil producers under state law for alleged climate damage linked to emissions that cross state borders.

Boulder, Colorado, and its county sued ExxonMobil and Suncor Energy in 2018, accusing the companies of knowingly contributing to climate change while misleading the public about the dangers of fossil fuels. The municipalities are seeking damages to help cover the mounting costs of climate-related harms. Roughly 30 similar lawsuits are pending across the country, including cases in Portland and Baltimore.

During oral arguments, Justice Clarence Thomas pressed Boulder's attorney, Kevin Russell, on whether the legal theory could expose businesses beyond oil producers to similar lawsuits, including large retailers. Russell acknowledged that «nothing in our theory prevents that,» though he noted state tort law could impose additional limitations. Justice Brett Kavanaugh separately raised concerns about the financial consequences of widespread litigation, warning that enough lawsuits could «bankrupt» defendants and questioning whether virtually any manufacturer or business could face similar claims.

Energy policy experts say the stakes extend far beyond the courtroom. Jason Isaac, CEO of the American Energy Institute, warned that a ruling in Boulder's favor could trigger a mass exodus of energy companies, creating fuel scarcity and higher prices. «You would see mass exodus and that would create more scarcity with fuel, more so than we're seeing already today, higher prices,» Isaac said. «And that's really what this is about. It's about controlling these companies and stopping the use of hydrocarbons.»

Isaac also cautioned that a Supreme Court ruling for Boulder could open «Pandora's box,» allowing thousands of jurisdictions to pursue similar lawsuits. He noted there are more than 90,000 levels of government in the United States alone that could begin lawsuits against energy companies, driving up costs for consumers because the cost to defend those cases would be astronomical. A 4-4 split could have a similar practical effect by leaving the lower court's ruling in place, though a tie would not establish nationwide precedent. Justice Samuel Alito has recused himself from the case without providing an explanation.

O.H. Skinner, executive director of the Alliance for Consumers, argued the lawsuits are an attempt to accomplish through the courts what climate advocates have been unable to achieve through Congress. «When you really boil it down, and you separate it from all the legal arguments, the advocates who push these cases are very clear,» Skinner said. «That it's an effort to get a backdoor carbon tax, because carbon taxes have never passed in Congress, or to bankrupt the energy industry.»

Skinner added that who could be sued might extend beyond oil producers to businesses across the energy supply chain, including gas stations, automakers, and utilities that sell or use fossil fuels. «From Boulder's perspective, anybody who's contributed to climate change would qualify, any sort of company, big or small, and the problem here is that to the left, climate change is everything and everything is climate change,» he said. «So it's very hard to find a line for who isn't contributing to climate change.»

Boulder has maintained the case is not an attempt to regulate national climate policy, arguing instead that Colorado has the authority to hold companies accountable under state law for alleged harms suffered within its borders. «Since the founding, states have had the power to provide tort remedies for injuries occurring within their borders even when the conduct causing those injuries occurred elsewhere,» Russell told the justices.

ExxonMobil and Suncor argue that because greenhouse gas emissions travel globally, Colorado cannot use state law to hold companies liable for emissions originating outside its borders. The companies contend such disputes should instead be governed by federal law. David Bookbinder, who previously served as counsel of record for Boulder but is no longer involved in the case, described the lawsuit as a way to implement an «indirect carbon tax» during a Federalist Society forum last year.

Isaac said the case differs from lawsuits against tobacco or opioid companies because greenhouse gas emissions come from countless sources around the world and cross state and national borders, making it difficult to isolate responsibility for climate-related damage. «Emissions are a global phenomenon,» he said. The court's decision could determine whether the roughly 30 pending lawsuits proceed and whether thousands of other jurisdictions can pursue similar claims.

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Connor Quincy

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Connor Quincy covers public affairs, politics, business, culture and daily news for Core Memo. The role focuses on verification, context, and clear explanations for readers.

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