Executive Summary

• On October 5, 2026, the Supreme Court heard oral arguments in a major climate change case—Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County, in which the city and county of Boulder seek to hold energy producers Suncor and ExxonMobil financially liable for localized climate adaptation costs and alleged deceptive marketing practices.
• With Justice Samuel Alito recused, the 8-justice Court evaluated the questions of 1) whether the Court has statutory authority to weigh in on the case which has a pending decision from Colorado State Court; and 2) whether the federal Clean Air Act and federal common law preempt state tort claims involving global greenhouse gas emissions.
• The case has high stakes as the Court’s ruling would affect dozens of other similar lawsuits pending around the country and determine whether state and local governments have the authority to sue fossil fuel companies on the ground of climate change damage; this insight provides an overview of the case and discusses five potential rulings and their policy implications for federal, state, and local governments, oil and gas companies, and the broader U.S. energy industry.

Introduction

On October 5, 2026, the Supreme Court heard oral arguments in Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County, in which the city and county of Boulder seek to hold energy producers Suncor and ExxonMobil financially liable for localized climate adaptation costs and alleged deceptive marketing practices.

The central disputes of the case are whether federal law preempts state law in addressing climate change, and whether states have the authority to seek compensation from alleged damage caused from climate change under the tort law.

The case has received tremendous interest from Congress and government agencies, with almost 200 congressional members and more than 40 states signed on to amicus briefs siding with either Suncor and ExxonMobil or Boulder. The Court’s ruling would affect dozens of other similar lawsuits pending around the country and determine whether state and local governments have the authority to sue fossil fuel companies on the ground of climate change damage.

With Justice Samuel Alito recused, the eight-justice Court evaluated the questions of 1) whether the Court has statutory authority to weigh in on the case which has a pending decision from Colorado State Court; and 2) whether the federal Clean Air Act (CAA) and federal common law preempt state tort claims involving global greenhouse gas (GHG) emissions.

This insight provides an overview of the case and the arguments on both sides, highlights the key points during the oral argument, and discusses five potential rulings and their policy implications for federal, state, and local governments, oil and gas companies, and the broader U.S. energy industry.

Overview of the Case

Summary of Suncor v. Boulder

In 2018, the City and County of Boulder filed a lawsuit in Colorado state court against Suncor Energy (a Canadian oil producer that operates the only two refineries in Colorado) and ExxonMobil (the largest U.S. energy company). The municipalities sought financial compensation for local climate adaptation costs under the state tort law, alleging two wrongdoings by the defendants: 1) Suncor’s and ExxonMobil’s fossil fuel products contributed to climate change; 2) the companies engaged in deceptive marketing regarding the effects of GHGs.

Procedural history

From the very start, the companies tried to move Boulder’s claims from state to federal court. They argued that since the case involved climate change—a global issue caused by GHG emissions crossing state and national borders—a federal court should hear it instead. The companies’ efforts eventually failed—the federal court said that state climate lawsuits belonged in state courts.

The companies then asked the state trial court to dismiss the case, arguing federal laws such as the CAA and the Constitution preempt Boulder’s claims. The state court also refused the request.

The oil companies then turned to the Colorado Supreme Court, which agreed to consider whether Boulder’s state law claims were preempted by federal law. In May 2025, the Colorado Supreme Court ruled that federal law did not block the state law climate lawsuit, allowing it to proceed further in the Colorado state court.

In response, Suncor and ExxonMobil turned to the U.S. Supreme Court, and the Court granted review of the case in February 2026.

Arguments on both sides

Suncor’s main arguments:

• The Clean Air Act makes the Environmental Protection Agency (EPA) the main regulator of GHG emissions and limits states’ authority over emission regulations to within their own borders, so the CAA preempts state lawsuits over climate change.
• Colorado has no constitutional authority to seek liability compensation under the state tort law regarding the conduct (fossil fuel production) beyond its borders, which would violate the horizontal federalism, equal sovereignty, and extraterritoriality principles.
• The application of Colorado law to worldwide fossil fuel production could interfere with the U.S. federal government’s constitutional authority over foreign affairs.

Boulder’s main arguments:

• The lawsuit does not attempt to limit GHG emissions through regulations. Instead, Boulder seeks compensation for local harm under traditional state tort law.
• The Clean Air Act covers emissions from specific sources, but it does not include any provisions about regulating deceptive marketing and consumer protection concepts.
• Colorado Supreme Court’s ruling was not a final decision, so the U.S. Supreme Court does not yet have the authority to hear the case.

Highlights of the Oral Arguments

The 8-justice bench dynamics

One week before the hearing, the Court announced without explanation that Justice Samuel Alito would no longer participate in the case. Some commentators suggested that the recusal was driven by Justice Alito’s ownership of individual stocks in oil and gas companies, which would lead to a conflict of interest in his involvement in the case.

With the absence of Justice Alito—perceived as a likely conservative vote siding with Suncor—the 8-justice bench could reach a 4–4 deadlock, leaving in place the Colorado Supreme Court decision that Boulder’s claims against Suncor and ExxonMobil are not preempted by federal law.

Highlights of the Justices’ Questions

• Procedural exit seems less likely: The justices did not spend much time evaluating whether the Court has the judicial authority to weigh in on the case. The Court appeared unlikely to drop the appeal without issuing a ruling, based on the questions posed by the justices.
• Federal preemption question was the center of the discussion: The justices spent a significant amount of time questioning the issue of federal preemption—specific legal principles including extraterritoriality and equal sovereignty were discussed at length; several justices, including Chief Justice Roberts, Justice Gorsuch, Justice Kavanaugh, and Justice Barrett questioned Suncor’s attorney about whether Boulder’s state tort law claim regarding harm from climate change should be preempted by the federal common law, the Constitution, or the Clean Air Act. They further questioned whether the federal preemption question at hand was limited to air and water, or any other exterritorial phenomena, with Justice Gorsuch remarking “It’s a little complicated” during the discussion.
• Practical implications were discussed: Several justices, including Justice Thomas, Chief Justic Roberts, and Justice Gorsuch raised practicality issues with Boulder County’s attorney about a hypothetical ruling that would allow Boulder to prevail, and the practical outlook of an immediate proliferation of state and local litigation cases against companies in the energy industry or other sectors.

Possible Rulings and Implications

Based on the dynamics during the hearing, there are five likely ways the Court could rule on the case in several months, likely by the spring or summer of 2027.

Scenario A, Procedural Exit: The Court Drops the Appeal Without Preemption Ruling (A less likely outcome based on the oral arguments)

Description of the ruling

The Court could determine that it does not have the judicial authority to weigh in on the case, as the decision from the Colorado Supreme Court is not final. This ruling would leave the state court’s decision intact, and allow Boulder’s claims to proceed.

Policy implication

The Court would likely have to take up another climate case in the future with a similar dispute in federal preemption. In the meantime, dozens of other similar climate lawsuits in other states would continue in their own preemption fights without nationwide precedent set by the Court.

Scenario B, Sweeping Federal Preemption: Banning Climate Lawsuits in State Courts

Description of the ruling

The Court could issue a broad ruling, stating that the CAA preempts state tort law claims seeking damages for interstate and international greenhouse gas emissions. Such a ruling would reverse the Colorado Supreme Court’s decision and effectively order the dismissal of Boulder’s lawsuit. Notably, this would establish nationwide precedent, ruling out dozens of pending state and local climate lawsuits across the country. It would also establish a strict threshold against claims using state tort law to seek compensation for inherently diffuse, interstate environmental harms that fall under federal statutory authority.

Policy implication

A sweeping preemption ruling would significantly reduce liability risks for fossil fuel producers at the state and local level. It would also prevent a patchwork of state and local climate regulations imposed by judicial rulings. This would mean that the Court affirms that climate lawsuits cannot be adjudicated case by case across state courts and redirects climate policymaking back to the federal government.

A sweeping preemption ruling would create an immediate conflict with the Trump Administration’s deregulatory agenda. The administration argues that the EPA lacks statutory authority under the CAA to regulate GHG emissions and uses this argument to justify its actions to repeal the 2009 Endangerment Finding and power plant emissions regulations. (See American Action Forum’s insights here and here.) This legal conflict could inadvertently bolster challenges brought by environmental groups seeking to block the administration’s regulatory rollbacks, and even encourage further litigation against the EPA. This would certainly lead to a prolonged judicial battle and introduce even higher policy and regulatory uncertainty for companies looking to make long-term investment decisions in the U.S. energy sector.

Scenario C, A Split Ruling: Emissions Claims Tossed, Deceptive Marketing Claims Survive

Description of the ruling

The Court could rule that Boulder’s claim based on climate damage does not hold, which would be a narrow federal preemption compared to a sweeping one. The deceptive marketing claims would survive, and Boulder could move the case forward based on this claim.

Policy implication

A narrow preemption ruling would do little to shield fossil fuel producers from state and local liability. Instead, municipal and state litigators would pivot aggressively toward deceptive marketing and consumer protection claims under state tort law. With various consumer protection standards across multiple state courts, oil and gas companies would face a fragmented legal landscape and prolonged exposure to pending trials.

At the same time, since this outcome confirms that federal law preempts climate emissions-based tort laws, it reinforces the principle that GHG emissions fall squarely under federal statutory authority. This would inadvertently strengthen environmental groups’ legal challenges against federal deregulatory rollbacks and lead to compounding uncertainty for energy investors

Scenario D, Rejection of Preemption: Greenlighting Climate Lawsuits in State Courts

Description of the ruling

A majority of the Court could hold that federal law does not preempt state tort law claims, concluding that Boulder’s claims can fully move forward under Colorado State Court. This decision would reaffirm states’ legal authority to seek compensation for costs incurred under climate adaptation and deceptive marketing practices.

Policy implication

The rejection of the preemption ruling would be a de facto greenlighting of climate lawsuits filed by state and local governments. This decision would trigger a proliferation of climate lawsuits at the state and local level, creating substantial legal and regulatory uncertainty for oil and gas companies, and potentially a highly fragmented court-imposed state climate policy landscape consisting of various emission regulations and standards across jurisdictions.

Scenario E, A 4–4 Tie: Boulder Advances, but No National Rule Is Set

Description of the ruling

The 8-justice Court could reach a 4–4 divide regarding the federal preemption question. The Court would issue a brief order affirming the Colorado Supreme Court’s decision, sending the case back to the Colorado state court for discovery.

Policy implication

Boulder would score a local victory on the case regarding the preemption question. Since no nationwide precedent is set in this scenario, the Court would likely have to take up another climate case in the future with a similar dispute in federal preemption. In the meantime, energy companies would continue to defend federal preemption in dozens of other similar climate lawsuits in other states, leaving the legal and regulatory landscape fragmented.