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The US Supreme Court has begun hearing a closely watched climate case that could determine whether cities and states can pursue oil and gas companies for the costs of climate-related damage. At the centre of the dispute is a lawsuit brought by Boulder, Colorado, against ExxonMobil and Suncor Energy.
The case could have consequences far beyond Colorado. Dozens of US states, cities and counties have filed or considered similar lawsuits seeking to make fossil-fuel companies contribute towards the growing costs associated with climate change. The legal battle therefore represents a much broader question: can communities use state courts to seek compensation from fossil-fuel companies for climate-related losses?
Boulder filed its lawsuit in 2018, arguing that ExxonMobil and Suncor had misled the public about the climate risks associated with fossil fuels. Local officials are seeking compensation for costs linked to climate impacts, including damage to infrastructure, health risks and extreme weather. The companies have denied wrongdoing and are attempting to prevent the case from proceeding in state court.
Why the case matters beyond Boulder
The oil companies’ argument is largely about where climate-related claims should be decided. Their lawyers say climate change is a global issue because greenhouse gases released in one location can affect the atmosphere and communities across state and national borders. In their view, allowing individual states to develop their own climate liability cases could create a patchwork of rules and expose fossil-fuel companies to a potentially enormous number of lawsuits.
The companies argue that federal law, including the Clean Air Act, prevents these state-level claims from moving forward. They maintain that decisions about emissions and climate policy should be handled at the federal level rather than through separate lawsuits in state courts. Boulder’s lawyers take a different position. They argue that the lawsuit is not an attempt to regulate global emissions through state law. Instead, it is a conventional legal claim seeking compensation for alleged harm to the community. They have also questioned the industry’s reliance on federal law, pointing out that the Clean Air Act gives states and local governments an important role in controlling pollution.
During the hearing, the justices appeared divided. Some conservative members of the court questioned whether state courts should be allowed to handle claims involving pollution that crosses state boundaries. Other justices questioned whether the Supreme Court was being asked to intervene too early, suggesting the case might return to state court before the justices make a final determination.
The unusual composition of the court adds another layer of uncertainty. Justice Samuel Alito has recused himself from the case, leaving eight justices to decide it. His absence creates the possibility of a 4-4 split if the court divides along ideological lines. In such a situation, the existing Colorado Supreme Court decision could remain in place.
A potential turning point for climate litigation
The stakes are particularly high because the Boulder lawsuit is part of a growing wave of climate litigation in the US. Local governments facing rising costs from floods, wildfires, heat and other climate-related impacts have increasingly looked to the courts for financial accountability. Supporters of these lawsuits see parallels with earlier litigation against tobacco and opioid companies. Those cases eventually resulted in major settlements and demonstrated how litigation could be used to make industries pay for some of the social costs associated with their products.
The fossil-fuel industry, however, argues that climate change is fundamentally different. Because virtually every modern economy has relied on fossil fuels, the companies contend that assigning responsibility through individual state lawsuits would create an unmanageable legal system and effectively allow courts to determine national climate policy.
For climate campaigners and local governments, the Supreme Court’s decision could determine whether this legal strategy remains viable. A ruling favouring ExxonMobil and Suncor could make it considerably harder for similar cases to proceed. A decision allowing Boulder’s lawsuit to continue, meanwhile, could give other communities a stronger pathway to seek compensation for climate-related damage.
The court is expected to issue its ruling by the end of its current term in 2027. Until then, the Boulder case remains more than a dispute between one Colorado community and two energy companies. It has become a test of how far local governments can go in seeking accountability for the consequences of a warming climate, and whether the courtroom will remain an avenue for addressing the financial costs of climate change.
References:
https://www.theguardian.com/us-news/2026/oct/05/supreme-court-big-oil-climate-damage-lawsuits
https://www.washingtonsun.com/courts/supreme-court-climate-cases
https://www.epa.gov/clean-air-act-overview
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