Supreme Court Takes Up Climate Tort Case Amid EPA Endangerment Rollback

By Chris Smith, Hunter Bruton and Noel Hudson

The U.S. Supreme Court’s decision to review a landmark climate tort case, coupled with the EPA’s repeal of its foundational Greenhouse Gas Endangerment Finding, signals a pivotal moment for climate liability and regulation in the United States. Together, these developments could redefine the balance of power between federal and state authority, reshape exposure to climate-related damages claims, and alter compliance obligations under the Clean Air Act. This alert outlines what businesses, municipalities and insurers need to know about the evolving litigation landscape and the potential implications for energy producers, automotive manufacturers and other industries affected by greenhouse gas regulation.

Supreme Court to Decide Scope of Federal Preemption in Climate Tort Suits

The U.S. Supreme Court has agreed to hear Suncor Energy v. Board of County Commissioners of Boulder County, a consequential climate‑liability case that tests whether federal law preempts state‑law tort claims seeking damages for climate‑related harms. Boulder County and City of Boulder allege that ExxonMobil and Suncor knowingly contributed to climate change while misleading the public about its risks, asserting causes of action such as public and private nuisance, unjust enrichment, trespass, civil conspiracy, and correlated statutory violations.

In May 2025, the Colorado Supreme Court held that federal law did not preempt these state‑based claims, allowing the case to proceed in state court. The companies’ petition argues that claims arising from interstate and international greenhouse‑gas emissions fall squarely under federal authority and therefore cannot proceed under state law. The Supreme Court’s review marks the first time it will consider the broader preemption question that underlies dozens of similar climate‑damages suits brought by states and municipalities nationwide.

In granting certiorari, the Court took the unusual step of directing the parties to brief whether it has statutory and Article III jurisdiction to hear the case at this stage. This procedural angle introduces the possibility that the Court could dispose of the case without reaching the underlying merits, depending on its conclusions regarding interlocutory review.

If the Court addresses the substantive question, a ruling expected by mid‑2027 could determine whether state‑law climate‑damages actions may proceed across the country or are foreclosed by federal law. Municipalities, energy companies, and insurers are watching closely, as the outcome could reshape the landscape for climate‑related liability exposure and litigation strategy.

EPA Repeals Endangerment Finding, Prompting Legal Challenge

At the same time, major developments are unfolding on the regulatory front. A coalition of public health and environmental organizations, including the American Public Health Association and the Sierra Club, has petitioned the U.S. Court of Appeals for the D.C. Circuit to overturn the Environmental Protection Agency’s February 2026 repeal of the 2009 Endangerment Finding.

The Endangerment Finding previously concluded that six greenhouse gases endanger public health and welfare. This finding has served as the legal foundation for federal greenhouse‑gas emission standards for motor vehicles for more than a decade. EPA argues that recent Supreme Court precedents, including Loper Bright and West Virginia v. EPA, show that the Clean Air Act does not authorize regulating greenhouse‑gas emissions from vehicles for climate‑related purposes, and it asserts that rescinding the finding and related vehicle standards will reduce regulatory burdens and save more than $1.3 trillion.

Broader Implications for Climate Liability and Regulatory Strategy

The petitioners contend that EPA’s repeal is unlawful, contradicts well‑established climate science, and rests on legal theories courts have repeatedly rejected. The challenge places renewed focus on the boundary between federal authority and state power to regulate greenhouse‑gas emissions, particularly as EPA’s rollback is expected to spur increased state‑level climate regulation and potentially lead to regulatory fragmentation. The outcome of the D.C. Circuit litigation and the likelihood of eventual Supreme Court review will have major implications for automotive manufacturers, energy producers, and any industry subject to greenhouse‑gas regulation under the Clean Air Act.

As these cases progress, companies in the energy sector face heightened uncertainty on both litigation and regulatory fronts. These developments affect risk exposure, compliance planning, disclosures, and strategic decision‑making across the industry. If you have any questions, please contact Chris Smith, Hunter Bruton, Noel Hudson or the Smith Anderson lawyer with whom you usually work.