When the Supreme Court opens its new term on Monday, America’s manufacturers will be watching one case that will have massive implications for job growth and business investment in communities across the nation. In this case, Suncor Energy v. Boulder County, the justices will consider whether state and local governments can use state lawsuits to make selected companies pay for harms attributed to global climate change.
The stakes are high and extend well beyond climate change and the two energy companies the Colorado county has sued. If individual states and municipalities can use their courts to assign financial responsibility for complex national and global policy challenges, manufacturers across sectors could face an expanding patchwork of lawsuits whenever policymakers struggle to resolve a difficult social, environmental, or economic issue.
That is why the manufacturing community is focused on how the Supreme Court decides this case and what it says in its ruling.
Boulder County and the City of Boulder contend that Suncor Energy and Exxon Mobil should be required to pay for their local climate-related harms because of their production, promotion, and sale of fossil fuels. More than three dozen similar climate cases are pending across the country, with governments suing anywhere from one company to dozens.
But climate change does not stop at state borders and is not caused by any one company or group of companies. Greenhouse gas emissions come from countless sources across the globe for generations, and are, in many respects, a byproduct of modern life.
Assigning legal responsibility for climate change, let alone which companies should pay, how much they should pay, and which local governments should receive that money, are issues that state liability law is ill-equipped to address. They raise national policy questions that state courts do not have the tools to resolve, particularly on a case-by-case basis.
Some of the attorneys involved in this litigation have acknowledged its broader economic implications. One lawyer representing Boulder said part of the litigation’s intended effect is to “raise the price” of oil, gas, and other forms of energy. Another attorney associated with the litigation described the liability they are seeking as “an indirect carbon tax,” explaining that the cost would ultimately be passed on to consumers.
Whether people should pay a carbon penalty, and if so, who should pay, how much, and how those resources should be used, is precisely the kind of question that belongs in the federal policymaking process. It requires balancing energy affordability, reliability, economic competitiveness, environmental goals, and national security.
The Supreme Court has recognized this before. In 2011, the majority explained in American Electric Power Co. v. Connecticut that greenhouse gas emissions are inherently interstate and international in nature and that claims involving them are governed by federal law. It cautioned that “borrowing the law of a particular state would be inappropriate” and emphasized that Congress and federal agencies, not judges, have the tools to weigh the competing scientific, economic, and policy considerations involved.
In that case, the Obama administration also underscored a key problem with using liability law to decide these questions: climate change involves such broad categories of potential plaintiffs and defendants that no obvious limiting principle exists for deciding who should be liable. Governments can select “a handful of defendants from among an almost limitless array of entities” associated with greenhouse gas emissions.
For manufacturers, that concern is not theoretical.
Similar litigation strategies are already being deployed outside the energy sector. Governments and advocacy groups have pursued manufacturers over plastic waste and other widely used products, seeking to shift the costs of broader social or environmental problems onto selected businesses. Lawsuits involving chemicals, packaged foods, transportation equipment, and other products likewise demonstrate how quickly litigation can become a substitute for difficult policymaking.
These cases carry real consequences. Legal uncertainty can discourage investment, constrain innovation, threaten jobs, and ultimately increase costs for consumers.
Manufacturers do not oppose action on climate change or other major societal challenges. Quite the opposite. Manufacturers are investing in technologies that reduce emissions, improve energy efficiency, strengthen infrastructure, and support resilience and adaptation. Industries confronting waste and recycling challenges are likewise investing in better systems and technologies.
GUNS. VOTING. CLIMATE. THREE SUPREME COURT CASES WILL MAKE OR BREAK ORIGINALISM
The question in Suncor Energy v. Boulder County, therefore, is not whether climate change presents serious challenges. It is who should establish the rules for addressing those challenges and through what process.
The Supreme Court should reaffirm that the rights, responsibilities, and trade-offs associated with global climate change are matters for federal policymaking — not a patchwork of state lawsuits. And it should make clear that courts cannot impose the costs of broad social and economic issues onto America’s manufacturers simply because policymakers in Congress and administrative agencies have struggled to resolve them.
Phil Goldberg is special counsel to the Manufacturers Accountability Project.