The Energy Sector Is Threatened by a Climate Litigation Free-for-All

By Donald J. Kochan

Sunday, September 20, 2026

 

Climate litigation gets an oral argument at the Supreme Court on October 5. Several fundamental questions loom: What is the proper reach of state law? May one state impose obligations that apply to activities in other states or other nations? And may one state do so in ways that interfere with the prerogatives of the federal government?

 

The case, Suncor Energy (U.S.A.) Inc., et al., Petitioners v. County Commissioners of Boulder County, et al., is one of dozens across the United States in which local governments are seeking to hold energy companies liable through state tort law for alleged climate-change effects. In these cases, neither the activities nor the effects alleged as wrongs are contained within the borders of the states where the cases are filed. Consequently, any remedy or liability would leak beyond their borders. Any court action other than dismissal, therefore, would necessarily and inevitably entail one state’s exerting extraterritorial jurisdiction. The U.S. Constitution does not allow this.

 

While states have a significant degree of autonomy to regulate intrastate activity free of intervention from the federal government, they do not have the authority to set national policy for transboundary or national matters. They also do not have the authority to regulate activities occurring in and within the authority of other states. This is the distinction between a coordinated union in a federal system versus a system of all against all.

 

Indeed, as the U.S. Supreme Court majority wrote in its Michelin Tire Corp. v. Wages (1976 ) opinion, a major defect “of the Articles of Confederation, and a compelling reason for the calling of the Constitutional Convention of 1787, was the fact that the Articles essentially left the individual States free to burden commerce both among themselves and with foreign countries very much as they pleased.” The U.S. Constitution replaced the articles in an attempt to restrain that power. Alexander Hamilton expressed in Federalist No. 11 that the new U.S. Constitution carved out some things that were of national concern and with which states could not interfere, explaining that “there are rights of great moment to the trade of America, which are rights of the Union.” Hamilton also stressed that the Constitution was adopted to create “an unrestrained intercourse between the states,” lest interstate and foreign trade be “fettered, interrupted and narrowed by a multiplicity of causes.”

 

Recently, however, certain ambitious states (or their subunits) — with their own policy agendas and particular approaches to social problems — have, either through their legislators or through their courts, seen fit to try to expand their power in ways that would necessarily have extraterritorial effects. Climate-change tort lawsuits and their legislative cousins, climate Superfund statutes, are perfect examples of this growing tendency.

 

As Saikrishna B. Prakash of the University of Virginia Law School writes in his amicus brief filed in Suncor, Boulder’s theory of liability would eradicate the territorial limits of a state’s legislative authority — “plunging the Nation into the interstate and international discord the Framers sought to avoid.” Prakash further explains that “Boulder’s attempt to deploy state tort law to regulate the entire United States and the world would have left the Founders thunderstruck.” Indeed, “With the Constitution’s creation of the Union, any power to regulate across state lines rests with Congress.”

 

Federal law has always governed interstate and international greenhouse gas emissions, in no small part because of the need for a uniform set of federal rules. Carefully balancing the costs and benefits of regulation for producers and consumers — including environmental protection, energy reliability, energy security, economic stability, and geopolitical stability — Congress exercised its constitutional authority and built a comprehensive regulatory scheme in the Clean Air Act. And the U.S. Supreme Court has already made clear, in American Electric Power Co. v. Connecticut (2011), that the Clean Air Act displaces common-law efforts to regulate greenhouse gas emissions. In our system of federalism, states do not have a role in this matter.

 

These are the principles that the U.S. Supreme Court will guard if it reverses the Colorado Supreme Court’s decision in Suncor, which has allowed state tort suits with extraterritorial reach. If the Court does not do so, it will endorse a tort system in which every domestic and foreign company can be sued in or by every state as well as every one of the thousands of subunits within states, like the County of Boulder. Such a multiplicity of lawsuits would cripple commerce, paralyzing energy producers by subjecting them to dozens of conflicting, jury-driven liability standards for the same global conduct. That would not only be grossly unfair and lead to inconsistent and arbitrary judgments. Such a litigation free-for-all would harm energy consumers, too.