[25-170] Suncor Energy (U.S.A.) Inc. v. Commissioners of Boulder County

Supreme Court Oral Arguments

The Supreme Court hears arguments in Suncor Energy v. County Commissioners of Boulder County, a case centering on whether Colorado can use state tort law to hold fossil fuel producers liable for global climate change harms. Petitioner's counsel

Key takeaways

• Petitioner Suncor Energy argues that Colorado's climate change lawsuit violates constitutional principles of equal sovereignty and extraterritoriality by attempting to regulate global fossil fuel production.
• Respondent Boulder County contends that states retain traditional tort powers to seek remedies for in-state injuries, even when caused by out-of-state conduct like marketing fossil fuels globally.

Main topics

• State vs. Federal authority over climate change litigation
• Constitutional principles of equal sovereignty and extraterritoriality

Notable quotes

"Our constitutional system does not permit state law to be used in that manner."

Conclusion

The episode provides a deep dive into constitutional federalism and statutory preemption as justices

Transcript preview

Speaker 8 (0:00) We'll hear argument first this term in Case 25-170, Suncor Energy v. County Commissioners of Boulder County. Mr. Shanmugam. Speaker 1 (0:09) Thank you, Mr. Chief Justice, and may it please the Court. This case involves an unprecedented effort to use state law to regulate global conduct. Boulder is suing petitioners under Colorado law on the theory that their global conduct increased the global use of fossil fuels, which led to an increase in global greenhouse gas emissions. which contributed to global climate change, which resulted in global harms. Our constitutional system does not permit state law to be used in that manner. The Constitution bars the application of state law to certain inherently federal areas. When the states entered the Union, the plan of the Convention required them to surrender certain pre-existing powers in order to ensure each state's equal sovereignty. Because of the ambient nature of air and water, and the conflicting rights of states, this Court has held for over a century that federal law governs interstate pollution claims. That principle applies with even greater force to claims involving global climate change. In addition, the Constitution's prohibition on extraterritorial regulation precludes a state from extending its law beyond its borders to regulate global conduct with global effects. A state does not have the power to regulate out-of-state conduct based solely on attenuated effects on the state. What is more, the use of state law to regulate global climate change would substantially interfere with the nation's foreign policy. And far from authorizing the application of state law, the Clean Air Act independently preempts any effort by one state to impose its law on emissions originating in others. If Boulder's claims are allowed to go forward, some 90,000 municipalities across the country will have the ability to make national and international energy policy by asking juries to impose catastrophic damages on selected fossil fuel producers. Put simply, that is not the constitutional scheme that the founders adopted. The Colorado Supreme Court's judgment should accordingly be reversed. I welcome the Court's questions. Speaker 8 (2:16) Mr. Sham again, before we get to... the merits. Would you spend some time and explain why we have jurisdiction? Speaker 1 (2:25) Sure, Justice Thomas. Our view is that the Court has both statutory and constitutional jurisdiction. I'll address those in turn. On statutory jurisdiction, our view is that Atlantic Richfield is directly on point. It could not be clearer, as a matter of Colorado law, that the proceeding below was a self-contained original proceeding, which gives rise to jurisdiction in this court under Section 1257. Boulder's argument to the contrary is that because this case did not involve a formal writ proceeding directed at the lower court, that it falls outside the scope of Atlantic Richfield. But in Atlantic Richfield itself, this court attached no weight to the form of the underlying proceeding. Instead, the court relied on the fact that it was a self-contained proceeding. In fact, this proceeding contained many of the hallmarks of a writ proceeding. The Colorado Supreme Court ordered the trial court to respond. to its order to show cause and then discharge the order to show cause at the end of the proceeding. And the Colorado Supreme Court's move away from formal writs is not unusual. As the brief of the former state Supreme Court justices points out, many states have made that move toward a more informal label for their proceedings. The key point is that in Colorado as elsewhere, these original proceedings are distinct from Ordinary appellate proceedings, even interlocutory appellate proceedings, in Colorado there are separate rules, Rule 21 and Rule 4.2, that govern each. As to constitutional jurisdiction, I think our submission here is a straightforward one. Because this case is coming from a state court, you look to the injuries suffered by the petitioners, who were the defendants in the lower court proceeding. The decision below... definitively adjudicated our legal rights, and it did so in a way that was binding not just in this case, but in other cases in Colorado as well. So not only are my clients exposed to a greater risk of liability as a result of the fact that one of our central defenses has been knocked out, but in a very real sense, we have lost the right to be free from state regulation, which was how... this Court characterized the loss of a preemption defense in NCAA v. Murphy. And as a result, we will suffer an injury. So that personal stake, in our view, is sufficient for Article III purposes. Counsel, you would Speaker 8 (4:53) concede that there are some situations in which an individual who engages in conduct in State B causes harm to somebody in Speaker 1 (5:02) State A can be sued under the law of State A, right? Mr. Chief Justice, we would concede that. And so the principle of no extraterritorial regulation that I articulated in my opening does admit of exceptions. There are cases in which the court has permitted that where a defendant can be said to be constructively present in the state by virtue of their conduct. Well, Speaker 8 (5:27) constructively present in the state, presumably that is because of... whatever injury they've inflicted upon the person in State A, right? Speaker 1 (5:36) Yes, and in the mine run— I mean, if you throw a Speaker 8 (5:38) rock over the border and hit him, that person can be— Speaker 1 (5:40) Correct, and we have no truck with those cases. Our point is that this goes further than any of those cases, and I would submit that that's really for three reasons. First, none of the conduct that is at issue here can really be said to have been directed at Colorado. Second, the harm at issue here is a harm that is diffused nationwide and indeed worldwide. And third, any causal nexus here is severely attenuated. Well, just before you, Speaker 8 (6:10) if you don't mind, because I'll lose track of the three of them otherwise, wasn't directed at State A. But if you're in B and you're aiming at C but you hit somebody in A, that doesn't make a difference, does it? Speaker 1 (6:23) Well, it certainly is true that if you are, say, across a state border and you direct your conduct across the state border, many of the cases on which my friend relies fall into that paradigm. I think what makes this case different is that in this case, not only do you not have any sort of direction of the conduct towards Colorado. But again, the causal chain here is severely attenuated, and there is no case on which my friend relies where, in the face of such an attenuated chain of causation, this Court has said that the exception to the venerable prohibition against extraterritorial regulation applies. And I would submit that if you accept Respondent's theory, the exception would swallow the rule. Now, just to be clear, as I indicated at the outset, we are relying on two strands of federalist principle here. The second is extraterritoriality. The first is the principle of equal sovereignty, the notion that in an area like this, there are uniquely federal interests that dictate the application of federal law. Now, I think the virtue of that approach is that it underlies the entire line of cases from this court involving interstate pollution going all the way back. Could I Speaker 3 (7:43) just keep you before you leave the extraterritoriality? Sure. I mean, usually we think of extraterritoriality as questions of choice of law. In other words, a state can't apply its own law extraterritorially. You know, here the choice of law question has not been really dealt with by the lower court. So what are you arguing? Are you arguing like, oh, everybody knows this is a case where the plaintiffs are going to want to apply Colorado law and that's how we should treat it, and you're saying that choice of law is impermissible? Or are you saying something broader than that, which is regardless of the choice of law chosen, there's something impermissible about this lawsuit because of its Speaker 1 (8:34) extraterritorial nature? Sure. So, Justice Kagan, I'll give you our bottom line and then the explanation. Our bottom line is that, in fact, no state's law can apply here, and that before you get to the question of choice of law, you've got to determine which state's laws potentially could apply here. Our view is that under either the equal sovereignty principle or the closely related extraterritoriality principle, there is no justification for... Colorado's law applying, the law of the affected state Speaker 8 (9:07) to apply. So just Speaker 1 (9:07) to interject here, Speaker 8 (9:08) let's say your defendant is from Texas. You'd object to Colorado applying Texas law? Speaker 1 (9:14) We would object to Colorado applying Texas law as well, but I think the answer to that is a little more complicated. We acknowledge under our equal sovereignty principle that Congress can authorize state law to apply. Congress has done that in a limited way in the Clean Air Act by, in the saving clause, authorizing the law of the source state to apply. So just to put a pin on it, if I understand Speaker 8 (9:42) it. because it is complicated to me, you would say that if the Clean Air Act, it's the Clean Air Act that forbids Colorado from applying Texas law? It is the... It's not any... Anything else? It's just the Clean Air Act. It is the Speaker 1 (9:57) constitutional principle. That's what I'm wondering. Speaker 8 (10:00) I'm trying to disaggregate those. Yes. Is there something in the Constitution that prohibits the application of Texas law to a Texas defendant? As a matter of— Or is it the Clean Air Act? Which is it? Speaker 1 (10:08) As a matter of constitutional structure, federal law and only federal law can apply. We point to this Court's cases starting with Missouri v. Illinois. Could Speaker 8 (10:18) a Texas Speaker 1 (10:18) Court apply Texas law? A Texas court can apply Texas law to ordinary interstate pollution claims by virtue of the Clean Air Act. So our view as to how this is supposed to work, Justice Gorsuch, and I recognize that there are— It's a little complicated. This case is certainly a little bit complicated. Can I Speaker 6 (10:37) just ask for a point? You're talking about a source in Texas? Yeah. Yeah. Speaker 8 (10:40) A Texas defendant who's a source— of Speaker 1 (10:44) applying Texas law. Yeah, there's one caveat that in our view prevents Texas law from applying, but it's an important one. Here's how the analysis in our view should work. Step one, as a matter of constitutional law, as this court's cases involving interstate pollution say, this is within the field of uniquely federal interest. We go all the way back, again, to Justice Holmes in Missouri v. Illinois and his explanation as to why as a matter of constitutional structure that is so. Second, under our approach, It is for Congress to authorize state law to apply if it wishes to do so. I think one reason — I'm sorry. Speaker 8 (11:20) Please, Speaker 3 (11:21) I was Speaker 8 (11:21) just Speaker 1 (11:21) trying to Speaker 8 (11:22) supplement you. I do want to get to point three, but — But Speaker 1 (11:25) I think one Speaker 3 (11:25) reason why this is becoming a little bit more complicated is because you keep switching back and forth between your two theories. You know, one theory is a theory really about air and water regulation and who gets to do that. And another theory is not about that and really goes much further and sets out broad principles of who can do what extraterritorially with respect to any subject. And as you're pressed on the extraterritorial aspect, you go back to your environmental theory. So is it really that your extraterritorial theory cannot stand alone? Speaker 1 (12:04) Like my children, I love both of our theories equally, Justice Kagan. Well, but if that's Speaker 3 (12:09) true, then you can't answer questions about the extraterritorial theory by referring to the nature of Speaker 1 (12:17) air and water regulation. They both get you to the same result in this case. And let me explain why. As I was saying to Justice Gorsuch, under our equal sovereignty theory, Congress has the authority to authorize... state law to apply. There's nothing anomalous about that. That is just Congress saying that in this uniquely federal area, we can prescribe as a federal rule of decision that state law applies. It's no different from a court applying federal common law, borrowing state law. Now, my caveat, which I think is an important one, is that in the context of these sorts of climate change claims, it really doesn't make a lot of sense. to talk about the source state law. Remember that my clients are not emitters, as was the case in American Electric Power. My clients are producers of fossil fuels. And these sorts of claims, I said at the outset that the application of federal law follows a fortiori from the interstate pollution cases. Unlike in the traditional interstate pollution cases like Ouellette, where you have two states, the source state and the affected state. Here, because the claim runs through global climate change, the claims here necessarily depend on the emissions of anyone who uses fossil fuels worldwide. All 50 states and foreign countries have an interest. Speaker 7 (13:43) I have a starting problem, which is I don't see anywhere below where you argued the extraterritoriality principle at all. And in this case, you raised it only on reply. And yet you come here and start arguing it as your first argument. Haven't you forfeited? It's a defense like any other. If you didn't raise it below, I didn't see anywhere in your briefs this argument. But putting that aside, I'm trying to disentangle them. You are really staying away from the word that seemed to control the briefing below and even here, which is preemption. All right? Are you clean? You don't win unless you get us to say that federal law preempts state law in this area, period. Correct? Speaker 1 (14:44) That is correct, which is to say this is — But Speaker 7 (14:46) you can't say that for the reasons that the Chief Justice pointed out, which is there are nuisance suits that we have permitted under state law. in both the Clean Water Act, and I don't see why we wouldn't permit it under the Clean Air Act either. Speaker 1 (15:07) Yeah, let me answer that question, and I do want to finish off my answer to Justice Kagan. Let me address your question first, Justice Sotomayor. I respectfully disagree with your suggestion that this issue was not fully preserved, and I would note that we made all these arguments in our petition for certiorari. There was never any suggestion by respondent that these arguments were not made below. Now, I will acknowledge that I think that the two strands of our argument are closely related. And the reason that they are closely related is that the constitutional source for our arguments is essentially the same. Our constitutional source is that when the states went into the constitutional system, the states... sacrificed certain rights that they would have had as independent sovereigns, and they went into the Union on an equal footing. That is really the source for the extraterritoriality principle, which goes all the way back to Justice Marshall and Justice Story. I would point this Court to the various amicus briefs, including the amicus brief of Professor Prakash, as well as the amicus brief of Tennessee, which set out the originalist history for these principles in some detail. Now, to answer Justice Sotomayor, the last part of your question, yes, it is true in both Willette and in American electric power that the Court recognized that there is some room for state law to operate, at least in the context of a bilateral interstate pollution dispute. But that is because the Clean Water Act and the Clean Air Act contain these saving clauses, which this Court— What Speaker 7 (16:45) do you do with Watson? Speaker 7 (16:47) What do you do with Watson that didn't — it wasn't a bilateral situation? Speaker 1 (16:52) With, sorry? Speaker 7 (16:53) Watson. Watson versus employer liability. That was a multi-state case. Speaker 1 (17:00) I'm not sure I'm remembering. JUSTICE SOTOMAYOR and the U.S. Well, that Speaker 7 (17:04) was a constructive President's case. Speaker 1 (17:07) Oh, well, look, I think what I would say as to the constructive presence cases more generally, not just Watson, but any other constructive presence case, is that there is no case comparable to this one. I actually think that the closest case on which my friend relies is State v. Lord, which was not a case from this Court. But even in that case, what you were dealing with was the diversion of water into the affected state. It was much easier to say in that context that the nuisance... existed in the affected state than here. And again, I would just say that in Ouellette and AEP, the Court was plainly construing and definitively construing the scope of the savings clauses to apply only to source state law. And the last thing, can I say one last thing to Justice Kagan, and I'll be very brief? Sure. Justice Kagan, on the extraterritoriality principle, I think what I would say is that if you accept our view, that this goes too far under the extraterritoriality principle. I think your analysis is at an end. I suppose that one could make an additional argument that even as to the extraterritoriality principle, Congress could authorize the application of state law, but it would still get you to the same result. So, yes, these are separate strands, but I think ultimately the conclusion under each is the same. Speaker 8 (18:28) Thank you, Counsel. Justice Thomas, Speaker 7 (18:30) anything further? That's the sort of mirror. Speaker 7 (18:34) I want to go back to jurisdiction. I don't want to leave it. As I look at Article 21 of the Colorado system, which is very different than the one that we looked at at Atlantic Ridgefield, it has two strands, and our amicus tell us that very directly. They tell us that the first strand is like Atlantic Ridgefield, has to do with writs of prohibition or some sort of writ of that sort. but that it also encompasses appellate jurisdiction. And we don't have... a right to take certiorari over appellate jurisdiction cases. How do we know, since the Court below didn't tell us, that this was an original writ or just an interlocutory appeal? Speaker 1 (19:21) Sure. So I don't think with respect that that characterization of Rule 21 is correct. I think it is true that Rule 21, which is labeled original jurisdiction under the Constitution, sweeps in two constitutional provisions in Colorado, Article VI, Section 2, which grants the Supreme Court superintending control, and Article VI, Section 3, which grants the Supreme Court power to issue certain writs. But I think that the key fact here is that whichever strand of the Constitution you're proceeding under, the rule itself is talking about original jurisdiction in the Colorado Supreme Court, and it could not be clear that the rule provides for a self-contained proceeding. I'm sorry. Speaker 7 (20:12) If we're unsure of your characterization, because there's certainly a number of amici brief who disagree with that characterization, shouldn't we be certifying this question to the Colorado Court instead of us deciding it? We have to be sure of our jurisdiction before we take it. Speaker 1 (20:29) You do, Justice Sotomayor, but we cite numerous decisions from the Colorado Supreme Court that characterize the proceeding in exactly this fashion. And the other side Speaker 7 (20:40) gives us numerous statements completely to the contrary that describe it just as an appellate process. Speaker 1 (20:47) That is, with respect, I don't think that that is accurate. I think the best thing that my friend on the other side has pointed to... is the fact that the decretal language in this case remanded. But I think the problem with that argument is that in Atlantic Richfield itself, the Montana Supreme Court's decision not only remanded but affirmed the lower court, and yet the court said this is the exercise of original jurisdiction. With respect Speaker 7 (21:13) to the cocks strand of your statutory argument, you still have federal defenses below that are available, aren't there? Speaker 1 (21:25) We do, but we cite — Speaker 7 (21:26) You still have personal jurisdiction. That's usually how we protect against extraterritoriality, correct? Speaker 1 (21:34) That provides very limited protection in a context like this, as evidenced by the fact that the trial court rejected that defense. You still have an appeal Speaker 7 (21:43) of that. Speaker 1 (21:44) And then you use personal jurisdiction to bootstrap jurisdiction worldwide. You Speaker 7 (21:47) also have causation arguments to raise the indirectness of this. could be a defense to any of the public nuisance arguments. Speaker 1 (21:56) But the very point of the fourth exception under Cox is that it provides for review in circumstances where the party seeking review might still prevail on non-federal grounds. And we point to Fort Wayne Books for the proposition. Well, Speaker 7 (22:12) that one we took great pains to say. that it was because there was a second constitutional principle at issue, which was a First Amendment right, where the injury was immediate. Here, the injury is not immediate to you. You still have appellate rights below that can protect any federal claims you have. Speaker 1 (22:31) We would submit that the injury to us is immediate for the reasons that I said earlier in response to Justice Collins. Because you're spending money Speaker 7 (22:37) in litigation. But I don't know that we've ever talked of spending money on litigation. as a constitutional injury. But Speaker 1 (22:46) we are doing so involuntarily as a result of the adverse ruling on a question of federal law. The court need only get to Cox if it disagrees with the application of Atlantic Richfield, a unanimous decision that is on all fours here. And the last thing I would say, to the extent that there is any doubt, and there really shouldn't be, about Colorado procedure. is again that in Colorado the best evidence that this is in the self-contained original proceeding category is that Colorado provides for two avenues in a circumstance like this. You can take an interlocutory appeal under Colorado Appellate Rule 4.2. That rule looks a lot like Section 1292 in the federal context, and that goes to the Colorado Court of Appeals first, as you would expect. Or you can go directly to the Colorado Supreme Court. The standard is quite high. You've got to show that you have an extraordinary question. But if you do, the proceeding begins and ends in the Colorado Supreme Court, and the rules distinguish explicitly between the original proceeding in the Colorado Supreme Court on the one hand and the underlying proceeding in the trial court on the other. Speaker 8 (23:54) Justice Kagan, anything further? Speaker 3 (23:56) Mr. Chambikin, in multiple respects, this suit appears to be based. on the old 1990s tobacco suits that were brought by states and local governments, basically saying that big tobacco had made representations, misrepresentations, which had caused people to use the product, to overuse the product, causing harm to those governments. I suppose the opioid litigation more recently follows the same model. This is Chapter 3. So if this is Chapter 3, were Chapters 1 and 2 also preempted? Speaker 1 (24:30) I don't think so. I would submit that this is, in fact, a very different book. And that is for the simple reason... Very different. ...book, not a chapter in the same book. And that is because in the tobacco litigation, as your question illustrates, that feels a lot more like a traditional misrepresentation claim where you have representations that are being made about a product. You have consumers... relying on those representations, and as a result, suffering injury quite directly if you accept the claims. And in that case, the remedies are also— Speaker 3 (25:07) I'm Speaker 1 (25:07) waiting to see the distinction because this complaint Speaker 3 (25:09) talks a lot about misrepresentations that are made by the defendants. Speaker 1 (25:16) Well, I think in an effort to avoid what would obviously be the preemptive force of our— constitutional arguments and indeed also our Clean Air Act arguments, Respondent has attempted to back up one step to the misrepresentation. But I want to make clear what is different here. What is different here is that the injury is not suffered by the Colorado consumer in the traditional sense. The claim here, if you look at the misrepresentation strand of the claims, and it's not very clearly defined in the complaint, but take a look, for instance, at paragraph 411 of the complaint at page 105. It's not really like any sort of misrepresentation claim that you would be familiar with. It's a claim that they Speaker 3 (26:04) might have a bad claim on the merits, a more attenuated claim on the merits. But this is the same kind of lawsuit against the same kind of actors for the same kind of harm. And I guess I'm not understanding. how it is that the one would be preempted and the other is not. Now, you could say to me, look, it's because really in the end, my claim is about air and water. But that's not what you seem to be saying. That is Speaker 1 (26:31) basically what we're saying. And we rely on this court's decision in Kearns for the proposition. When you're engaging in this type of analysis, you've got to look at the gravamen of the claim. And our core submission for this court is that whatever state law label you attach to the claims, and again, I would direct you to the paragraphs that talk about misrepresentation, the gravamen of the claim here is that some marginal increase in greenhouse gas emissions attributable to my client's conduct. cause the harm. Speaker 3 (27:02) Well, you sound like you have a very good causation argument, but again, I'm not sure what the difference in preemption is. But let me ask it another way. Speaker 1 (27:09) Sorry, Mr. Speaker 3 (27:10) Sam, again, let me ask it another way. Where does this principle come from, the sort of states can't regulate in the air and water space? If I understand you correctly, it's kind of the plan of the convention, no state would have entered into the convention except with the understanding that they couldn't regulate in this sphere. We have used that argument on occasion. We've never combined it with this notion that you combine it with, which is like, well, actually, the states wouldn't have entered in. Speaker 3 (27:52) state regulation is forbidden unless Congress says otherwise. So it's really just a default rule. So there's a default rule that was part of the plan of the convention. And I suppose it's like, wow, like where is the text for that? Where's the support for that? Where's the precedent