This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.

What's Trending

Tracking trends critical to life sciences and technology companies.

| 2 minute read

U.S. Supreme Court Allows Honolulu's Lawsuit Against Oil and Gas Companies to Proceed in State Court

On Monday, the U.S. Supreme Court announced that it will not hear an appeal from certain major oil and gas companies to dismiss a lawsuit by the city of Honolulu seeking to hold the companies responsible for the impacts of climate change. The court did not provide an explanation for its decision.

The lawsuit accuses Sunoco, Shell, Chevron, Exxon Mobil, and BP of knowingly promoting false and misleading information about the dangers of climate change caused by burning large quantities of fossil fuels.

The companies argued that the case could proceed only in federal court, not in state court, because the legal claims sought to regulate gas emissions or interstate commerce are governed by federal law.

Honolulu argued that there is a strong case under Hawaii state law against deceptive marketing and the case should, therefore, be allowed to proceed in state court. 

Hawaii’s supreme court rejected the oil and gas companies’ argument in November 2023, permitting the case to proceed in state court on the basis that it seeks to punish deceptive marketing practices and not restrict interstate commerce. Following this ruling, the defendants appealed to the U.S. Supreme Court.

The Biden administration had previously weighed in on this case at the justices' request and urged them to reject the case, arguing that it should be allowed to proceed in state court at this time, while acknowledging that the companies could ultimately prevail. It is expected that the incoming Republican Trump administration will take a much different view of this case.

The lawsuit is not the first of its kind. A number of similar cases have been filed in recent years by blue states and cities, with mixed results.

In 2023, the Supreme Court rejected appeals from major oil companies facing similar public nuisance lawsuits filed by cities in Colorado, Maryland, and Rhode Island. In 2021, however, the court ruled in favor of oil companies in a similar lawsuit from Baltimore. That case was ultimately dismissed after being sent back to the lower courts on procedural grounds. Similarly, last January, a state judge in Delaware rejected parts of a Delaware lawsuit against BP, Chevron, and other companies.

Also in 2023, California sued ExxonMobil, Shell, Chevron, ConocoPhillips, and BP, as well as the American Petroleum Institute, for allegedly deceiving the public for decades about the impact of climate change that created climate-related harms in the state. This lawsuit is currently being challenged by 19 Republican states.

On Tuesday, a New York judge rejected a New York City lawsuit originally brought in 2021 under then-Mayor Bill de Blasio, seeking to hold oil and gas companies financially accountable for climate change, alleging that the oil industry intentionally misled the public about the role of fossil fuels in worsening climate change. In his opinion, New York Supreme Court Justice Anar Patel found that the city failed to show that Exxon Mobil, Shell, and BP deceived New Yorkers about the climate effects of their products.  In making his ruling, the Justice noted that the “City cannot have it both ways by, on one hand, asserting that consumers are aware of and commercially sensitive to the fact that fossil fuels cause climate change, and, on the other hand, that the same consumers are being duped by Defendants’ failure to disclose that their fossil fuel products emit greenhouse gases that contribute to climate change.”

Tags

corporate, esg & sustainability