Climate Lawsuit Against Exxon: Koch Industries to Remain in State Court as Supreme Court Declines Appeal

The U.S. Supreme Court made a pivotal decision on Monday, opting not to entertain a bid from major fossil fuel companies and an industry trade group to transfer a lawsuit filed by Minnesota against them from state court to federal court. The lawsuit accuses these companies of exacerbating climate change, a significant contention within the energy industry.

The Decision

Exxon Mobil Corp, Koch Industries, and the American Petroleum Institute had sought the high court's review of a March ruling by the St. Louis-based 8th U.S. Circuit Court of Appeals. The Appeals Court upheld that Minnesota's lawsuit, alleging decades-long deceptive marketing by the energy industry to undermine climate science and public understanding of fossil fuel-related hazards, rightly belonged in state court, where it was originally lodged.

This decision by the Supreme Court follows last year's trend, where the justices declined to consider multiple similar appeals. This action effectively returned cases filed in various states - including California, Colorado, Rhode Island, Hawaii, Maryland, and others - back to state courts. State courts have been viewed as more favorable to plaintiffs compared to federal courts.

Eight U.S. appeals courts have supported lower court decisions, redirecting analogous climate cases to state courts. The rationale has been that these lawsuits predominantly raise state law claims, thereby negating federal court jurisdiction.

The Jurisdiction is the Key

The American Petroleum Institute and energy companies have argued that federal jurisdiction is fitting as climate change represents a matter of national and global significance. They contend that these lawsuits aim to regulate federal energy policy through state law, suggesting that the federal court system is better suited to address the alleged harms resulting from greenhouse gas emissions, which span beyond state boundaries and occur worldwide.

Minnesota's lawsuit in 2020 accused the energy companies and the American Petroleum Institute of being aware since the 1970s and 1980s that their fossil fuel sales would contribute to climate change. However, the state alleged that the companies withheld this information from the Minnesota public and actively worked against climate science. According to the state, these coordinated efforts to downplay fossil fuel risks breached state consumer protection and fraud laws, resulting in billions of dollars in economic damages associated with climate change.

The companies and the institute have refuted these allegations. In August, they urged the Supreme Court to move the case to federal court, highlighting the state's intent to seek remedies for the global implications of climate change, a matter that they believe belongs in the federal legal sphere.