Who should cover the costs of climate change?
That is the question underpinning the first case of the Supreme Court’s new term, a landmark dispute over whether state and local governments can seek to hold oil companies responsible for billions of dollars in costs from floods, droughts, wildfires and other climate-related disasters.
The case before the justices pits officials from Boulder, Colo., against two major oil companies — Suncor Energy and Exxon Mobil. The Colorado officials contend that they should be able to proceed with a lawsuit arguing that the oil companies violated state law and seeking to hold them responsible for the costs of environmental damages. The companies, joined by the Trump administration, argue that such lawsuits are barred by federal law and the Constitution.
A decision is expected by the end of June or early July. Depending on its scope, the ruling could have significant implications for similar efforts to sue fossil fuel companies for billions of dollars in damages caused by climate change.
If the court sides with the companies and finds that such lawsuits are not allowed, it could doom dozens of other such cases by local and tribal governments percolating in lower courts throughout the country.
A decision for Boulder could clear the way for similar cases to move forward, potentially opening up oil companies to enormous financial liability.
Only eight of the nine justices are scheduled to take the bench for the argument. Last week, Justice Samuel A. Alito Jr. announced he would recuse himself from the case.
He gave no reason in the recusal announcement, but he had faced pressure from environmental and court watchdog groups to step aside because he has publicly reported owning stock in two oil companies that are not parties to the case but could be affected by the outcome, ConocoPhillips and Phillips 66. He had also gone on a luxury fishing trip with an investor in a company involved in the dispute.
In an interview after his announcement, Justice Alito told Bloomberg that he had taken “into account the particular arguments that were made on both sides here” and decided that recusal was “the prudent step.”
Under the court’s ethics code, justices can recuse at their own discretion. They typically step aside if their impartiality could be questioned, including because of a financial tie to a party or a close friend or family member who is involved.
If the justices were to split 4 to 4 in Justice Alito’s absence, a lower court decision to allow the Boulder suit to move ahead would stand. Such deadlocked decisions set no binding national precedent.
The legal fight began in April 2018, when the city and county of Boulder sued Exxon and Suncor, asserting that the companies should be required to share in the costs of climate change, including damages from more heat waves, wildfires, droughts and floods.
Boulder argued that local governments and taxpayers “cannot pay the full costs of all that is needed, nor should they.” The suit contended that the companies “knowingly and substantially” fueled the climate crisis by “producing, promoting and selling a substantial portion of the fossil fuels that are causing and exacerbating climate change.” It also claimed that the companies concealed and misrepresented the dangers of their products.
After a decision by the Colorado Supreme Court to allow the case to continue in state court, the oil companies asked the justices to intervene. The Trump administration joined them, a reversal of the Biden administration’s stance on the climate lawsuits.
The oil companies argued that the case should be heard in federal court, not state. Federal courts are often thought to be a more business-friendly venue.
The companies claim that federal laws regulating the environment pre-empt Boulder’s lawsuit and that because climate change is a global problem, it cannot be handled in state courts.
They are joined by the lawyers for the Trump administration, who argue that a ruling for Boulder could spur a raft of litigation, allowing “every locality in the country” to “sue essentially anyone in the world for contributing to global climate change.”
Boulder has pushed back on those arguments, saying in its briefs that its lawsuit is part of a tradition “since the Founding” to use state law to handle cases where the harm comes from outside the state, including in environmental cases.
