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A Supreme Court showdown over climate change lawsuits could drive oil companies into bankruptcy, gas stations into financial ruin and Americans paying more at the pump if judges allow cities and states to seek billions in damages against the fossil fuel industry, energy policy experts warn.
“You would see a mass exodus and that would create a greater shortage of fuel, even more so than what we’re already seeing today, higher prices,” Jason Isaac, CEO of the American Energy Institute, told Fox News Digital. “And that’s really what this is about. It’s about controlling these companies and stopping the use of hydrocarbons.”
The Supreme Court heard arguments Monday in Suncor v. Boulder, a dispute over whether federal law prevents cities and states from suing oil companies under state law for alleged climate damages related to emissions that cross state lines.
During oral arguments, Justice Clarence Thomas asked Boulder attorney Kevin Russell whether the legal theory could expose companies other than oil producers to similar lawsuits, including large retailers.
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Climate activist protesters gather outside the Supreme Court for oral arguments in Suncor v. Boulder, October 5, 2026. (Elaine Mallon Fox News)
“Nothing in our theory precludes it,” Russell acknowledged, while pointing out that state tort law could impose additional limitations.
Justice Brett Kavanaugh separately expressed concerns about the potential financial consequences of widespread litigation, warning that enough lawsuits could “put defendants out of business” and questioning whether virtually any manufacturer or company could face similar claims.
The city and county of Boulder, Colorado, sued oil giants ExxonMobil and Suncor Energy in 2018, accusing the companies of knowingly contributing to climate change while misleading the public about the alleged dangers of fossil fuels. Municipalities are seeking damages to help cover the growing costs of climate-related damages. There are about 30 similar lawsuits pending in jurisdictions across the country, including Portland and Baltimore.
The Boulder lawsuit alleged that ExxonMobil and Suncor knew for decades about the climate risks associated with fossil fuels, but misled the public about those risks. The complaint referenced an internal ExxonMobil memo from 1977 that was circulating among the company’s top executives. The memo states that “current scientific opinion is overwhelmingly supportive” of the idea that fossil fuels contribute to increased CO2 emissions.
David Bookbinder, who previously served as Boulder’s attorney of record but is no longer involved in the case, described the lawsuit as a way to implement an “indirect carbon tax” at a Federalist Society forum last year.
But Boulder argued that the case was not an attempt to regulate national climate policy, instead arguing that Colorado had the authority to hold companies liable under state law for alleged harms suffered within its borders.
“Since creation, states have had the authority to provide tort remedies for injuries occurring within their borders, even when the conduct causing those injuries occurred elsewhere,” Russell told the justices.
Chief Justice John Roberts and the Supreme Court return to the bench as disputes over President Trump’s agenda remain in focus. (Photo by Anna Moneymaker/Getty Images)
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OH Skinner, executive director of the Consumer Alliance, argued that the lawsuits are an attempt to accomplish through the courts what climate advocates could not achieve through Congress.
“When you really boil it down and separate it from all the legal arguments, the advocates who are making these cases are very clear,” Skinner told Fox News Digital. “This is an effort to get a backdoor carbon tax, because carbon taxes have never been passed by Congress, or to bankrupt the energy sector.”
Justice Samuel Alito recused himself from the case without providing an explanation.
Isaac warned that a Supreme Court ruling in favor of Boulder could open “Pandora’s box,” allowing thousands of jurisdictions to pursue similar lawsuits. He said a 4-4 split could have a similar practical effect by letting the lower court’s decision stand, even though a tie would not set a nationwide precedent.
“There are over 90,000 levels of government — government entities in the United States alone — that could also bring lawsuits against energy companies,” Isaac told Fox News Digital. “Increase costs for consumers because the cost of defending them would be astronomical.”
Members of the Supreme Court pose for a group photo at the Supreme Court on October 7, 2022. Seated from left: Associate Justice Sonia Sotomayor, Associate Justice Clarence Thomas, Chief Justice of the United States John G. Roberts Jr., Associate Justice Samuel A. Alito Jr., and Associate Justice Elena Kagan. Standing behind, left to right: Associate Justice Amy Coney Barrett, Associate Justice Neil M. Gorsuch, Associate Justice Brett M. Kavanaugh, and Associate Justice Ketanji Brown Jackson. (USA TODAY Network via Reuters Connect)
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Skinner argued that those who could be prosecuted could extend beyond oil producers to companies across the energy supply chain, including gas stations, automakers and utilities that sell or use fossil fuels.
“From Boulder’s perspective, anyone who has contributed to climate change is reliable, any company, big or small, and the problem here is that on the left, climate change is everything and everything is climate change,” Skinner told Fox News Digital. “So it’s very difficult to determine who is not contributing to climate change.”
But Isaac said the case is different from lawsuits against tobacco or opioid companies because greenhouse gas emissions come from countless sources around the world and cross national borders, making it difficult to isolate responsibility for climate-related damages.
“The shows are a global phenomenon,” Isaac told Fox News Digital.
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ExxonMobil and Suncor argue that because greenhouse gas emissions spread globally, Colorado cannot use state law to hold companies responsible for emissions originating outside its borders. The companies argue that such disputes should instead be governed by federal law.
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Meanwhile, other states, such as Utah, have prohibited the pursuit of these types of tort lawsuits.
“If the energy companies lost and Colorado won, that would drive up gas prices across the country,” Utah Attorney General Derek Brown told Fox News Digital. “And so those kinds of decisions, ultimately, are up to Congress.”
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