Supreme Court justices appeared mixed Monday during arguments over Boulder, Colo.'s effort to force two major energy companies to cover the cost of local climate change-related damages.
The top court's decision could affect similar lawsuits pending in state court — there are 32 such cases brought by state, tribal and local governments, including Michigan, Vermont, Chicago, and the territory of Puerto Rico,
The governments argue that oil companies should help cover the costs of climate damage like wildfires, rising sea levels and severe storms. If successful, it would mean a potential new source of new revenue for cities and states, money that could be securitized to back municipal bonds.
Lawsuits against oil companies could be compared to tobacco and opioid lawsuits, Justice Elena Kagan suggested during Monday's oral arguments.
Considered one of the most significant cases of the 2026-2027 term,
The city and county of Boulder, Colo. in 2018 sued Exxon Mobil and Suncor Energy, arguing the companies knowingly contributed to global climate change and causing millions of dollars of local damage.
The energy companies — who have the Trump administration's support — have unsuccessfully argued the state claims are preempted by federal law and must be dismissed. In August 2025 they brought the question to the Supreme Court, which agreed to hear the case.
During Monday's oral arguments, some judges expressed concern that allowing Boulder's lawsuit to advance would unleash similar litigation.
"Presumably if you prevail, the next day, a municipality in every single state will file a lawsuit that will probably copy your pleadings," Chief Justice John Roberts said. "How do you think that will work out on the ground?"
"I don't think there's anything in the Constitution that says preemption arises from whenever a state law, if copied in other states, could cause a lot of litigation," responded Boulder's attorney Kevin Russell.
The oil companies are facing "around three dozen" of similar lawsuits from municipalities, said Kannon Shanmugam, attorney for the plaintiffs.
"If Boulder's claims are allowed to go forward, some 90,000 municipalities across the country will have the ability to make national and international energy policy by asking juries to impose catastrophic damages on selected fossil-fuel producers," Shanmugam said. "Put simply, that is not the constitutional scheme that the Founders adopted."
Conservative justices seemed to support the oil companies while the liberal justices leaned toward Boulder.
Justice Brett Kavanaugh pointed to a series of Supreme Court cases that he said "make crystal-clear that interstate air and water pollution are matters for federal law."
Justice Samuel Alito recused himself, as he has stock in oil companies, which makes a 4-4 tie possible. That would leave in place the Colorado Supreme Court's ruling, which allows Boulder's case to move forward.
An association representing local governments filed an
"Local governments are frequently the level of authority best positioned to bring these actions because it is local budgets that most directly absorb the costs of injury to constituents, damage to infrastructure, and costs of emergency response," said the Local Government Legal Center, coalition of government organizations
"That multiple parallel lawsuits exist around the country does not establish that the issue is federal in nature, as the oil companies and their amici contend, but instead highlights the adverse impact on local government and their constituents that results from a misleading marketing scheme," the group said.
The oil companies have also filed their own countersuits, including in a case that
