By John Kruzel
WASHINGTON, Sept 30 (Reuters) - Facing potential liability for harms related to climate change, major oil companies have again turned to the US Supreme Court, teeing up a case that could determine the fate of dozens of climate-related lawsuits by state and local governments against fossil fuel companies.
The dispute involves a bid by ExxonMobil and Suncor Energy to scuttle a lawsuit brought by officials in Boulder, Colorado, seeking to hold the companies liable for helping drive climate
change and misleading the public about the risks of fossil fuels.
The case will be argued next Monday on the first day of the court's new nine-month term. It marks the latest example of energy-sector companies asking the justices to block climate-related liability or limit federal environmental regulation.
Nearly 60 state and local governments have brought similar suits seeking billions of dollars from fossil fuel companies, with more continuing to be filed, Exxon and Suncor told the justices. A ruling by the top US judicial body in favor of the companies could lead to many of those cases being dismissed.
President Donald Trump's administration has backed Exxon and Suncor, arguing that federal law precludes Boulder's claims.
"The stakes are enormous here. There are billions of damages that are sought," attorney Deepak Gupta, who regularly argues before the Supreme Court, said during a Georgetown Law preview of the court's new term. "And the underlying subject here is maybe the most consequential thing we could be litigating."
Backers of the oil companies argue that if Boulder's most far-reaching claims are allowed to proceed, it could give states sweeping power over conduct occurring far outside their borders.
Saikrishna Prakash, a University of Virginia law professor who filed a brief supporting the companies, said the implications would reach well beyond Exxon and Suncor.
"If Boulder can attach liability to these two companies, I think it can attach liability to thousands of others as well," Prakash said during a preview of the case hosted by George Mason University's Antonin Scalia Law School. "Essentially, Boulder claims that Colorado can reach around the United States (and) regulate production everywhere by attaching liability to it."
INDUSTRY TRACK RECORD
Energy companies and trade groups, along with states allied with them, have built a largely winning record before the justices over the past two decades in cases involving climate liability and the reach of federal environmental regulation.
One key setback for them came in a 2007 ruling, however, when the court ruled that greenhouse gases qualify as air pollutants under the Clean Air Act, a landmark federal anti-pollution law, and that the Environmental Protection Agency has authority to regulate them.
The burning of fossil fuels releases greenhouse gases including carbon dioxide into the atmosphere, trapping heat and raising average global temperatures over time.
The energy sector gained a major victory in 2011 when the Supreme Court blocked states and environmental groups from suing under federal law to seek court-ordered reductions in carbon emissions from power companies.
Climate plaintiffs responded by turning to lawsuits brought under state laws. Oil companies repeatedly have asked the Supreme Court to block or redirect a growing wave of state-law climate suits.
In a 2021 ruling involving Baltimore, the court sided with BP, Chevron, Exxon and other energy companies on a procedural issue governing appeals over whether climate cases belong in state or federal court. The decision aided companies seeking to move such cases into federal court, generally viewed as a more favorable venue for them.
That procedural issue first brought the Boulder case to the Supreme Court in 2023, when it left in place a lower court's ruling returning the lawsuit to state court. Justice Samuel Alito took no part in consideration of the case at that time and has recused from participating in the current dispute. Alito owns stock in several oil and gas companies but not Exxon or Suncor, according to his financial disclosure forms.
MONETARY DAMAGES SOUGHT
The Boulder case involves whether federal law precludes certain state-law claims seeking damages for harms allegedly caused by the effects of greenhouse gas emissions. The justices also directed the parties to address whether the court has jurisdiction to decide the case at this stage.
Boulder's city and county governments sued Exxon and Suncor in 2018, accusing them of misleading the public about the climatic effects of fossil fuels while continuing to promote and sell their products. The companies deny wrongdoing.
The plaintiffs seek unspecified monetary damages to help cover past and future costs associated with climate change, including infrastructure repairs, environmental damage, emergency management and harms to public health.
"Local communities are living with the mounting costs of climate change," Aaron Brockett, mayor of the city of Boulder, said after the court announced it would hear the case. "The Supreme Court should affirm Colorado's right to hold these companies accountable for the harm they have caused in Colorado."
The companies urged lower courts to dismiss the case, arguing among other things that Boulder's claims intrude on an area governed by federal law and the Clean Air Act. The Colorado Supreme Court rejected these arguments last year, prompting the companies to appeal to the US Supreme Court.
(Reporting by John Kruzel; Editing by Will Dunham)
