Supreme Court nixes fossil fuel giant fight to dismiss liability lawsuit

Oil and gas companies will be forced to face a suit seeking damages over Honolulu's claims they downplay their products' contribution climate change.

by Ryan Knappenberger and Kelsey Reichmann, Court House News, January 13, 2025

WASHINGTON (CN) — The Supreme Court turned down an appeal from fossil fuel giants on Monday, rejecting an attempt to skirt a climate change lawsuit seeking to hold companies liable over claims of deceptive marketing about the effect of greenhouse gases.

Companies such as Sunoco, Exxon Mobil, Chevron and BP said they are facing dozens of lawsuits, leaving a vital industry at risk of owing billions of dollars over accusations it causes climate change. 

The justices denied the oil and gas companies' petition without further explanation in Monday's orders list.

“This case presents a case-dispositive and recurring question of extraordinary importance to the energy industry, which is facing dozens of lawsuits seeking billions of dollars in damages for the alleged effects of global climate change,” Kannon Shanmugam, an attorney with Paul Weiss, wrote in the companies’ petition. 

In 2017, Honolulu filed a lawsuit against Exxon Mobil, Chevron, Sunoco and others, saying the companies misled consumers about fossil fuels' impact on climate change. The city claims their behavior led to increased fossil fuel consumption and exacerbated the local impacts of climate change in Hawaii. 

Honolulu cites state laws in its complaint, but the fossil fuel companies wanted the case moved to federal court. Three courts — a district court, the Ninth Circuit and the Supreme Court — had already shot down the companies’ first attempt to move the case to federal court. 

Once the case was kicked back to state court, the companies tried to get lawsuit dismissed. Exxon and others argue that state courts do not have jurisdiction to hear the dispute because the case involves the impact of interstate and international climate change. 

The fossil fuel companies want to expand on a similar ruling involving oil and gas companies in Maryland. In BP P.L.C. v. Mayor & City Council of Baltimore, the justices held that federal courts could review an order remanding a case to state court. The 7-1 ruling allowed oil and gas companies to challenge an order to have state courts review Baltimore’s complaint. 

Exxon and others wanted the court to go further.

“Having litigated the question whether those cases were removable to federal court — including before this court in BP P.L.C. v. Mayor & City Council of Baltimore — the question now is whether the plaintiffs’ claims can legitimately proceed on the merits,” Shanmugam wrote. 

Oil and gas companies frame the question as whether climate change cases can proceed in state court even though the injuries claimed include the effects of interstate and international greenhouse gas emissions. 

Honolulu rejects that characterization. The city says its case is narrowly focused on the effects of climate change that oil companies caused in violation of Hawaii’s regulation on marketing laws. Honolulu says its case would not force the companies to curb emissions in any way. 

“The complaint ‘do[es] not ask th[e] court to limit, cap, or enjoin the production and sale of fossil fuels’ by petitioners or anyone else,” Victor Sher, an attorney with Sher Edling representing the city, wrote in its brief. “Instead, it seeks damages for local climate-change impacts in Honolulu that are attributable to petitioners’ deceptive conduct, and it requests equitable relief to mitigate the ongoing risks posed by those local impacts through, for example, infrastructure projects to protect respondents from sea level rise.” 

Honolulu urged the justices to skip the fossil fuel companies' appeal, arguing that the high court’s intervention was unnecessary at this stage. 

After the Supreme Court declined oil and gas companies' petition to review whether to move the case to federal court, a state trial court shot down another motion to dismiss the complaint on federal preemption. The Hawaii Supreme Court unanimously affirmed. 

Honolulu said the state high court’s interlocutory order is not a final judgment on the case and therefore is not under the U.S. Supreme Court’s jurisdiction to review. 

“Reversing the decision below would not terminate the litigation; no federal policy would be ‘seriously erode[d]’ by litigating this case to final judgment; and petitioners have raised additional federal defenses that might warrant this court’s review at a later date,” Sher wrote. 

The Supreme Court asked the Biden administration to weigh in before deciding whether to hear the case. 

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R: Supreme Court allows Honolulu’s climate case against oil firms | Honolulu Star-Advertiser

CD: US Supreme Court Rejects Big Oil Attacks on Hawaii Climate Lawsuit | Common Dreams

G: US supreme court allows Hawaii lawsuit against fossil fuel firms’ misinformation | US supreme court | The Guardian

AT: Supreme Court lets Hawaii sue oil companies over climate change effects - Ars Technica

NBC: Supreme Court allows Hawaii climate change lawsuit to move forward

DC: Supreme Court Won’t Hear Bid To Shut Down Hawaii Climate Lawsuit | The Daily Caller

B: Oil Industry Spurned by Supreme Court on Hawaii Climate Suit - Bloomberg

SB: Supreme Court declines to step into Maryland gun licensing and Hawaii climate change suits - SCOTUSblog