by Neil Auwarter
As the Trump administration implements its “burn, baby, burn” agenda by gutting federal regulation of fossil fuel emissions, dozens of states and cities are pursuing climate action using a new tactic: lawsuits in state courts seeking to hold oil and gas companies accountable for their role in climate change.
Key allegations and legal theories — echos of states versus Big Tobacco
Ten states, including California, Minnesota and Hawaii, have sued major U.S. oil and gas companies like ExxonMobil and Shell for harm residents have suffered due to extreme weather, sea level rise, drought and wildfires. More than a dozen cities, from Honolulu to Charleston, have filed their own lawsuits. The legal theories include public nuisance, negligence and failure to warn. But legal experts believe the most promising claims are those based on deception and fraud — that the companies deceived consumers about the climate damage they knew their products were causing.
These fraud and deception claims are strikingly similar to claims against Big Tobacco in the 1990s. Like Big Oil, tobacco companies were accused of deceiving consumers about the harms caused by their product. The tobacco companies argued that state court claims against them were barred — ”preempted” by the federal Cigarette Labeling and Advertising Act. But in the landmark 1992 case of Cipollone v. Liggett Group, the U.S. Supreme Court ruled that while the federal act preempted some legal claims, it did not preempt claims based on fraud and conspiracy to lie about the dangers of tobacco. This ruling paved the way for 46 states to sue tobacco companies, resulting in a stunning 1998 settlement under which the companies agreed to pay $206 billion.
Like Big Tobacco before it, Big Oil now claims that federal law — this time the Clean Air Act — preempts the state court claims. The oil company defendants took this claim of preemption to the U.S. Supreme Court in the flagship climate case brought by the city of Honolulu. But in January 2025, the Supreme Court refused for now to hear the case, allowing the state court actions to proceed. This ruling did not resolve the preemption issue on its merits, but it has encouraged the plaintiffs and climate activists. The ruling keeps open the possibility that even the currently constituted Supreme Court will follow its earlier ruling in Cipollone when the time comes for the court to decide the preemption issue.
Outsourcing the job of climate denialism
One historic blunder that exposed Big Tobacco to claims of fraud occurred in 1994 when seven tobacco CEOs testified under oath before Congress that nicotine was not addictive — even though internal company documents later showed they knew the reverse was true. So Big Oil CEOs were careful not to repeat the same mistake when they testified before Congress in 2021. Instead, the CEOs acknowledged climate change is real and driven by the burning of fossil fuels. But at the same time Big Oil was quietly outsourcing a campaign of climate disinformation by funneling money to front groups like the American Petroleum Institute and a handful of willing scientists who published pseudoscientific climate denialism. A notable example is the climate denialist Willie Soon, a Malaysian astrophysicist whose Solar and Stellar Physics research group was for more than 10 years funded almost entirely by $1.2 million from ExxonMobil and other fossil fuel entities. Soon’s work claims climate change is caused by variations in radiation from the sun. Big Oil’s bet is that the artifice of paying third parties to spew climate denialism will insulate it from claims of fraud and deception like those that brought Big Tobacco to its knees in the 1990s. But the plaintiffs will ask courts and juries to see through this as a mere smokescreen.
Can the state court climate cases surmount three high legal hurdles?
Preemption: The first and perhaps highest hurdle is that courts may decide the federal Clean Air Act preempts state law claims. The test is whether the Clean Air Act shows Congress intended the act to be the sole regulatory scheme governing the use of fossil fuels. If so, then the federal law preempts state laws from intruding on that regulatory scheme. But, as noted, the preemption defense will be difficult to assert against deception-based claims. Plaintiffs will ask courts to find, as in Cipollone, that Congress could not have intended to allow manufacturers to intentionally deceive the public.
Reliance: A second hurdle is that some of the fraud-based claims most likely to survive the preemption defense require proving “reliance,” meaning that consumers reasonably relied on the defendants’ deceptive statements when they purchased oil and gas-based products. One answer is that some of the state law claims, such as Hawaii’s statute prohibiting deceptive business practices, require proving only that a statement was “likely to deceive,” not that particular consumers actually believed and relied on the statement.
Causation: A third hurdle is proving causation – that the defendants’ actions caused harm. Proving the threshold fact that fossil fuels contribute to climate change should be relatively simple, especially since the standard of proof in civil cases is a “preponderance,” meaning more than a 50% probability. But quantifying the climate harm caused by a particular producer is more complicated for several reasons. First, fossil fuels are not the sole source of greenhouse gasses. Second, U.S. companies produce only 20-25% of global oil and natural gas. A third problem for plaintiffs will be connecting climate to weather: Plaintiffs will struggle if courts find they must prove the defendants’ products caused a particular storm, drought or heatwave. Fourth, courts may decide plaintiffs must quantify how much less oil and gas the public would have consumed had they not been misled. Again, however, some legal claims, like Hawaii’s deceptive business practice statute, do not require proving a seller’s deception actually caused consumers to purchase a product.
Despite the potential to overcome such legal hurdles, the success of these lawsuits is far from a given. One environmental law expert, Michael Gerrard of Columbia Law School, was cautious in his assessment: “There are a lot of lawsuits pending, but so far, not a single court in the world has held fossil fuel companies financially responsible for greenhouse gas emissions. It’s highly uncertain whether these cases will ultimately succeed.” Importantly, though, the litigation’s discovery phase could be impactful even before the cases reach trial. The plaintiffs’ access to internal communications will reveal what Big Oil knew about climate impact, and how it promulgated disinformation. Bombshell admissions hidden until now in corporate records may jolt the public and policy-makers into a new phase of action, as occurred in the litigation against Big Tobacco.