The U.S. Supreme Court has ruled in favor of several major oil and gas companies in a long-running climate liability case, marking a significant legal setback for municipalities seeking to hold fossil fuel producers accountable for climate change impacts. The decision, issued in June 2024, centers on jurisdictional questions rather than the merits of the underlying claims, effectively blocking attempts by cities and counties to pursue state-law claims in federal court.
The ruling stems from consolidated appeals involving lawsuits filed by Baltimore, Colorado communities, and California cities against Chevron Corp., Exxon Mobil Corp., Shell PLC, and other energy giants. These cases, initially filed in state courts between 2017 and 2018, allege that the companies knew for decades about the risks of greenhouse gas emissions but engaged in coordinated campaigns to downplay climate science and mislead the public—claims modeled after litigation against tobacco and opioid manufacturers.
In a 7-2 decision written by Justice Clarence Thomas, the Court held that when determining whether a case belongs in federal or state court, judges must consider all possible grounds for federal jurisdiction raised by the defendant—not just those that ultimately succeed. This procedural shift makes it significantly harder for plaintiffs to keep climate liability suits in state courts, where they argue state laws offer stronger remedies for alleged deception and public nuisance.
The plaintiffs contend that fossil fuel firms violated state consumer protection laws by promoting products while concealing their climate harms, contributing to sea-level rise, extreme weather, and infrastructure damage. They seek compensation for adaptation costs, including seawalls, stormwater upgrades, and emergency response expenses. Defendants argue that such claims are preempted by federal clean air laws and that climate policy should be set by Congress and executive agencies, not juries applying state tort law.
Justice Thomas emphasized that the Court was not ruling on whether the claims have merit, but on the proper test for removal jurisdiction under the federal officer statute. “A defendant may remove a case to federal court if any viable ground for federal jurisdiction exists,” he wrote, reversing lower court rulings that had limited consideration to only the defendant’s eventual winning argument.
The dissent, led by Justice Ketanji Brown Jackson and joined by Justice Sonia Sotomayor, warned that the decision undermines states’ ability to address local harms through their own legal systems. “Today’s ruling elevates procedural technicality over substantive justice,” Jackson wrote, noting that it allows defendants to “forum shop” for favorable federal venues even when their removal arguments ultimately fail.
The ruling does not complete the lawsuits but sends them back to lower courts to re-evaluate jurisdictional arguments under the new standard. Plaintiffs may still attempt to remand cases to state court, though analysts say the path forward is now considerably steeper. Similar climate liability suits are pending in New York, Massachusetts, and Hawaii, all facing parallel procedural hurdles.
Background: The Rise of Climate Liability Litigation
Efforts to hold fossil fuel companies legally accountable for climate change began gaining momentum after investigative reports in 2015 by Inside Climate News and the Los Angeles Times revealed internal industry documents showing awareness of climate risks as early as the 1970s. These disclosures sparked parallels to earlier corporate accountability campaigns, prompting cities and states to explore legal remedies for adaptation costs.
The first municipal climate lawsuit was filed by San Francisco and Oakland in September 2017, alleging that 37 fossil fuel companies created a public nuisance by contributing to global warming. Though that case was dismissed on grounds that climate change is a global issue beyond the scope of state nuisance law, it paved the way for a new wave of suits focused on deception and failure to warn—claims grounded in state consumer protection and fraud statutes.
By 2020, over two dozen cities, counties, and states had filed similar actions, seeking billions in damages for infrastructure upgrades and disaster preparedness. The cases have largely proceeded on parallel tracks: some dismissed early on jurisdictional or preemption grounds, others surviving initial motions to dismiss and moving toward discovery.
Internal documents cited in the complaints include Exxon’s 1982 internal memo projecting significant warming from fossil fuel use and Shell’s 1991 film “Climate of Concern,” which acknowledged climate risks while later public messaging downplayed uncertainty. Companies have consistently denied allegations of wrongdoing, stating that their public communications reflected legitimate scientific debate and that climate policy is a matter for legislators, not courts.
Industry and Government Reactions
The American Petroleum Institute (API) praised the Supreme Court’s decision as a victory for the rule of law. “This ruling reinforces that climate policy belongs in the legislative and executive branches, not in courtrooms attempting to impose novel liability theories through state law,” said API Senior Vice President Frank Macchiarola in a statement following the ruling.
Environmental legal advocates expressed disappointment but noted the fight is far from over. “While this is a procedural setback, the underlying allegations of deception remain serious and well-documented,” said Cassie Gautsch, senior counsel at the Center for Climate Integrity. “We will continue to pursue accountability through every available legal avenue.”
The Biden administration had filed a friend-of-the-court brief supporting the oil companies’ position on jurisdictional grounds, arguing that allowing state-law climate suits to proceed could lead to inconsistent national standards and interfere with federal foreign policy. The administration did not take a position on whether the claims have merit.
Several oil companies issued statements emphasizing their investments in lower-carbon technologies. Chevron pointed to its $10 billion investments in lower-carbon ventures through 2028, while Exxon highlighted its work on carbon capture and hydrogen. Neither company admitted liability for past conduct.
What Happens Next?
The cases now return to federal appellate courts for reconsideration of jurisdictional arguments under the Supreme Court’s new standard. The Fourth Circuit will review Baltimore’s case, the Ninth Circuit will handle California matters, and the Tenth Circuit will review Colorado’s suit. No dates have been set for rehearing arguments.
If plaintiffs fail to secure remand to state court, they may seek to amend complaints to strengthen federal jurisdiction arguments or pursue alternative legal theories. Some legal scholars suggest that Congress could clarify jurisdictional rules through legislation, though such action appears unlikely in the current political climate.
The next major development to watch is whether any of the cases proceed to discovery—a phase that could compel production of additional internal communications. Courts have varied in their willingness to allow such proceedings, with some dismissing cases before evidence is exchanged and others permitting limited discovery on specific claims.
For updates on filings, court schedules, and procedural rulings, interested parties can consult the Public Access to Court Electronic Records (PACER) system or follow tracking efforts by the Sabin Center for Climate Change Law at Columbia Law School, which maintains a regularly updated database of climate litigation.
As climate impacts intensify globally, the legal battle over responsibility for adaptation costs continues to unfold across multiple fronts—from international tribunals to national legislatures and now, prominently, in the American court system. The Supreme Court’s decision reshapes the battlefield but does not end the conflict.
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