The Colorado Supreme Court permitted Boulder County and the city of Boulder on Monday to proceed with their lawsuit against two fossil fuel corporations over alleged local harms caused by the effects of climate change.

By 5-2, the Supreme Court concluded federal law did not preclude the local governments from raising state-level claims of nuisance, trespass, unjust enrichment and civil conspiracy against ExxonMobil and Suncor for their conduct over several decades.

Justice Richard L. Gabriel, in the May 12 opinion, rejected the defendants’ argument that the lawsuit seeking damages was, in essence, a backdoor method of regulating global greenhouse gas emissions.

“Moreover, accepting defendants’ argument that a large damages award is equivalent to regulation and thus must be preempted could lead to the preemption of many traditional state law (liability) claims simply because they might lead to a large damages award,” he wrote. “But a lawsuit does not amount to regulation merely because it might have an impact on how actors in a given field behave.”

Justice Carlos A. Samour Jr. dissented, arguing all local governments are now empowered to file their own lawsuits to recover the costs of addressing climate change. Such a result, he argued, is “regulatory chaos.”

“We are but one indivisible nation. Yet, the majority in this case gives Boulder, Colorado, the green light to act as its own republic,” Samour wrote for himself and Justice Brian D. Boatright.

Although the lawsuit is the first of its kind to reach the state’s highest court, the case has already wound its way through every level of the federal system and resembles litigation that courts around the country have already considered.

The local governments’ claims implicated a variety of political and policy questions, including the executive and legislative branches’ prerogative to set energy policy and the slippery slope of permitting every municipal government to potentially seek money from private entities for climate-related disasters.

In the plaintiffs’ telling, ExxonMobil and Suncor knew for decades that the burning of fossil fuels and the release of greenhouse gases into the atmosphere would change the planet’s climate. Yet, the companies misrepresented or concealed their internal findings from the public. As a result, Boulder County and the city of Boulder have had to spend money to address droughts, wildfires and other manifestations of extreme weather.

The plaintiffs brought claims under the state’s common law — which refers the longstanding category of civil claims that does not originate with a specific statute. To them, the lawsuit was not about regulating emissions or altering federal policy, but to use the same tools as plaintiffs who are harmed by faulty products, for example.

On their side, the local governments wielded a 2023 decision of the Hawaii Supreme Court, finding the city of Honolulu’s similar state-law claims against Sunoco and other defendants could proceed. Recently, the U.S. Supreme Court declined to review that decision.

Meanwhile, the defendants in the Boulder County case leaned on a different decision out of the New York-based U.S. Court of Appeals for the Second Circuit. In that lawsuit, where New York City sued ExxonMobil and other energy corporations, the Second Circuit ruled that the city would be “jeopardizing our nation’s foreign policy goals” by deploying state-level legal claims against longstanding national and international energy agreements.

Although Boulder County and the city of Boulder filed their claims in 2018, ExxonMobil and Suncor transferred the case to federal court. But a trial judge and the Denver-based 10th Circuit believed it did not belong in the federal system, and the U.S. Supreme Court declined to take up the appeal in 2023.

Last year, Boulder County District Court Judge Robert R. Gunning allowed many of the local governments’ claims to proceed against ExxonMobil and two subsidiaries of Calgary-based Suncor. He noted the plaintiffs would be left “without legal recourse” if the energy companies’ argument were true. Moreover, he observed even the federal courts thought the lawsuit should be in state court.

“As the Local Governments aptly put it,” wrote Gunning, “the Energy Companies are arguing against a case the Local Governments did not plead. Through this action, the Local Governments are not attempting to litigate a policy solution to global climate change, limit fossil fuel use or production, or control greenhouse gas emissions.”

In the majority opinion, Gabriel similarly pointed out the parties “seem to talk past one another.” Nonetheless, the majority believed the Hawaii Supreme Court’s decision was persuasive, and that no federal law or constitutional provision prevented the plaintiffs’ state-law claims from proceeding.

“Nor do defendants indicate how Boulder’s claims pose an obstacle to our federal government’s dealings with any foreign nation,” Gabriel added.

Samour, in dissent, believed the lawsuit should be barred because federal law does not explicitly authorize the claims. Unlike the majority, he saw the plaintiffs as effectively seeking to regulate interstate greenhouse gas emissions.

“Make no mistake: Boulder looks to curb the energy companies’ conduct by hitting them where it hurts — their wallets,” he wrote.

Finally, Samour took the unusual step of urging the U.S. Supreme Court to review the case.

“My colleagues in the majority, like other courts, interpret Supreme Court precedent as permitting Boulder’s claims. Respectfully, I believe that they misread those cases,” he concluded.

In a statement, ExxonMobil called the lawsuit meritless and said it would “continue to fight these claims.”

“This lawsuit is based on a fundamental legal principle: You have to pay your fair share for the harm that you cause,” responded Marco Simons, an attorney representing the plaintiffs.

The case is County Commissioners of Boulder County et al. v. Suncor Energy USA, Inc. et al.

Editor’s note: This article has been updated with additional comments.