Earlier this month, the Supreme Court heard oral arguments in Suncor v. County Commissioners of Boulder. The case concerns Boulder, Colorado’s attempt to sue several energy companies for damages allegedly caused by greenhouse-gas emissions. During oral argument, Boulder leaned heavily on its claim that the companies had engaged in deception: that Suncor and other companies were misleading the public by trying to obscure or downplay the effects of climate change.
That argument has been flawed from the start, resting on basic misunderstandings of the law of fraud and deception. There is no allegation of a conspiracy, and no reason to think that even these two companies knew or said the same things to the public at any time, so trying them together would be a nightmare. The Court should recognize these defects and swiftly reject Boulder’s claim, which would otherwise open the door to endless similar litigation.
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The entire proceeding should have come to a halt when Boulder’s lawyer, Kevin Russell, told the Court that “this case is not about emissions. It’s about deception and producers” who, in his view, are “non-emitters not subject to the [clean air] act.” Russell made this argument because if Suncor et al. were “emitters,” he feared that they would be subject to federal legislation that preempts state-law emissions claims.
At no point, however, did Russell grasp the transformation needed to keep Boulder’s toothless deception claim viable. If the case is about deception rather than emissions, who deceived whom and when? Under Rule 9(b) of the Federal Rules of Civil Procedure, Boulder “must state with particularity the circumstances constituting fraud or mistake.” Colorado has a similar rule, as do other states, including New York.
Yet Boulder’s complaint fails to specify when the alleged misrepresentations were made, by whom, or to whom. Nor does it identify the content of the misstatements or allege any particular duty owed by the defendants or other fossil-fuel companies. Moreover, tort law (Third Restatement of Torts: Liability for Economic Harm, §9) requires allegations of materiality, reliance, and loss. None appears in Boulder’s complaint.
Moreover, there is no reason to allow Boulder to amend or refile its defective claim, since publicly available information shows that it could never plead a valid cause of action. As I have explained elsewhere, a successful claim for fraud or deception requires that a defendant possess information unavailable to the plaintiff, putting the latter at a systematic disadvantage in making investment decisions. There can be no deception if all relevant parties share the same pool of knowledge. For example, under Section 10(b)(5) of securities law, sellers must disclose all material information to their buyers; and deliberately failing to do so would be fraudulent.
But here, every party has access to the same information, which should foreclose any fraud claims. To argue otherwise leads to absurdities. During oral argument, Justice Clarence Thomas observed that the plaintiffs “could just as easily sue retailers of oil and gas products,” all of which operate within the state. By the same logic, enterprising private plaintiffs could sue Boulder itself: as a public body with relevant expertise, the entire county has long known what Suncor and Exxon Mobil knew.
Ironically, in Boulder’s Supreme Court brief, Russell wrote, “the deception claims require only that petitioners stop misleading the public; they could avoid liability without reducing their contributions to emissions at all.” This invites a simple question: Why doesn’t Boulder issue the warning itself? That, too, would presumably remedy the alleged informational harm. Yet Boulder’s brief does not specify what the warning should say or what years it should cover. Nor does it explain why the county is playing hide-the-ball when it could simply post what it considers the ideal warning on its own website.
These basic deficiencies of Boulder’s fraud claims were not addressed in the case. Justices Sonia Sotomayor and Elena Kagan noted that the defendants “have causation arguments to raise,” but thought that these arguments had to be raised at trial. But what is left to try? No oil and gas company was ostensibly hiding the facts about global warming, thus causing drivers to drive more, increasing emissions and therefore damages.
Both Sotomayor and Kagan failed to recognize that any causation argument would have to explain how Suncor’s speech affected drivers’ behavior. Since many drivers already knew about global warming, why would they change their behavior simply by being told what they already knew? Unless substantial numbers of drivers would have stopped driving or driven less, the causation argument collapses—and with it the entire deception claim.
As Chief Justice John Roberts noted, Boulder’s complaint could open the floodgates to as many as 90,000 copycat claims: “if [Boulder] prevail[s], the next day, a municipality in every single state will file a lawsuit.” The combined weight of these suits could bankrupt every fossil-fuel company doing business in the United States. Boulder’s novel strategy thus threatens far greater damage than a simple injunction, which would at least leave the companies’ assets intact.
Since its 1959 decision in San Diego Building Trades Council v. Garmon, the Court has recognized that tort damages can exert the same coercive force as regulation. In holding that the suit was preempted by federal law, Justice Felix Frankfurter observed that it made no difference whether the state acted through broad or specific laws:
Regardless of the mode adopted, to allow the States to control conduct which is the subject of national regulation would create potential frustration of national purposes. . . Such regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.
If tort liability is barred in routine local labor disputes, as it was in Garmon, it should also be barred in global-warming cases. That remains true even if Boulder switched gears by instead attempting to hold the defendants liable for their emissions rather than their statements, given the countless other parties worldwide that have also contributed to emissions.
The Court applied similar reasoning in 2011’s American Electric Power Co. v. Connecticut. There, it held that the Clean Air Act (1970), which the EPA had already described as “comprehensive,” “displaced” private actions under federal law but left open the question of whether it also “preempted” state tort actions, since that issue had not been briefed below.
Given the massive financial threat these suits pose to an entire industry, all three kinds of preemption—conflict between federal and state law, federal occupation of the field, and state enforcement that would “frustrate” federal programs—apply a fortiori. Thousands of local lawsuits seeking damages would cause far greater disruption than a single, targeted federal action addressing conventional pollution from identifiable sources rather than diffuse emissions.
The plaintiffs’ argument was fatally flawed by treating cases involving discrete harms crossing state lines as guides to litigation involving an indefinite number of plaintiffs and an equally vast class of defendants. Boulder, for example, repeatedly invoked International Paper v. Ouellette, a conventional pollution case in which a New York “point source” contaminated a single site in Vermont, and the Court applied New York law. But Ouellette offers little guidance in a case with no identifiable point source.
At root, the absence of clear boundaries makes it imperative to dismiss these suits. Boulder’s deception claim is fundamentally defective, and its flaws cannot be cured by reverting to an equally untenable emissions claim. The Court should recognize these defects and reject Boulder’s case.