Can the City of Honolulu sue energy companies for emitting carbon emissions 5,000 miles away? The Supreme Court this week will consider whether to take up Sunoco LP v. City and County of Honolulu, a case that could allow a single municipality to manipulate energy policy for the entire nation. The Court should take the case to resolve a circuit split and prevent an assault on federalism.
In 2020, Honolulu sued major players in the energy industry that extract, produce, distribute, or sell fossil fuels around the world. The claims asserted consist of nuisance, trespass, and other purported state law torts. The complaint alleged that the defendants are directly responsible for climate change and seeks untold billions including compensatory damages and an abatement fund, tools Honolulu will use to push progressive energy policies. The Hawaii Supreme Court affirmed denial of the industry’s motion to dismiss, implausibly casting the plaintiffs’ claims as concerning intra-state torts and intra-state injuries that do not conflict with and are not preempted by federal law or federal regulations. (Nothing this time, by the way, about the Spirit of Aloha).
The case implicates core tenets of federalism. Honolulu is attempting to use the law of one state to dominate the others, seizing for itself the power to control and regulate through judicial decree nationwide economic activity in a manner that only the federal government can typically provide. Our federalist Constitution does not allow this outcome. Honolulu’s case is one of two dozen state and municipal climate change lawsuits that deploy state law theories against energy companies. Each represents an attempt to impose local law across the country—and indeed the world—to effect left-wing policy outcomes.
The plaintiffs allege that emissions caused by the corporate defendants have created a nuisance. Abatement is core to a successful nuisance claim, and reducing emissions is the only true means of abating the alleged nuisance. So Honolulu’s case is a vehicle for regulating energy emissions nationwide and beyond. But the principle that every state in our republic is equal forecloses Honolulu’s bid to set itself up as the nation’s energy czar.
The principle of the equal sovereignty of each state is deeply rooted in tradition and history. Speaking to the Virginia ratifying convention, James Madison explained that the Constitution chartered “a government of a federal nature, consisting of many coequal sovereignties.” Likewise in Federalist 80, Alexander Hamilton explained that cases involving “the peace of the confederacy,” including disputes among the states, were appropriately resolved by federal courts for the simple reason “that the peace of the whole ought not to be left at the disposal of a part.”
These statements track a pervasive founding-era concern that certain states would dominate the federal union by virtue of their population and economic might, an outcome the constitutional convention labored mightily to avoid through various compromises. It is an essential structural principle of the Constitution.
So it should come as no surprise that a coalition of 20 states led by Alabama has asked the Supreme Court to grant the industry’s petition. The amicus brief submitted by these states explains how Honolulu’s goals conflict with the energy policies favored by other states. For example, Alabama has identified coal power as “an essential and necessary activity which contributes to the economic and material wellbeing of the state.” Given that Honolulu’s claims reach emissions activity all over the country, its suit will necessarily compromise Alabama’s ability to pursue its own energy well-being.
Critically, this petition should not be conflated with the ongoing debates over the dormant commerce clause. This is not a case like National Pork Producers Council v. Ross, decided by the Supreme Court last year, in which the exercise of state police powers to regulate the in-state sale of pork meat was recognized as having corollary effects in other jurisdictions. As the Court made clear in a prior case, Franchise Tax Board v. Hyatt (2019), “the Constitution implicitly forbids” states from “apply[ing] their own law” in areas where “the ‘interstate . . . nature of the controversy makes it inappropriate for state law to control’” (quoting Texas Industries v. Radcliff Materials (1981)). Here Honolulu is intentionally projecting its own law to regulate emissions outside its borders. As the states’ amicus brief points out, “the allegedly tortious conduct occurred almost entirely outside of Hawaii.” The lawsuit “has everything to do with a national environmental agenda and very little to do with Hawaii.” After all, how can the plaintiffs abate the alleged emissions nuisance if the tortious conduct they allege occurs mostly not within the state, but outside of Hawaii?
The industry’s petition easily satisfies the Court’s traditional cert factors. The Hawaii Supreme Court decision directly conflicts with the Second Circuit in City of New York v. Chevron Corp. (2021). Both cases feature a municipal plaintiff advancing nuisance and trespass claims against energy companies relative to climate change. In New York, the appeals court held federal law precludes state-law climate nuisance claims. When a federal statute, the Clean Air Act, displaced preexisting federal common law with a legislative federal standard, that did not make “state law . . . suddenly become presumptively competent to address issues that demand a unified federal standard.” The Hawaii Supreme Court reached the opposite conclusion “that neither federal common law nor the Clean Air Act preempt Plaintiffs’ claims.” The Second Circuit concluded that the “basic interests of federalism” preclude suits like Honolulu’s. For good measure, the court asserted with ample citation to Supreme Court precedents, “For over a century, a mostly unbroken string of cases has applied federal law to disputes involving interstate air or water pollution.”
The pending Sunoco case also involves an issue of national importance. As the petition explains, the climate nuisance, fraud, and misrepresentation cases are reaching the point of no return. Absent the Court’s intervention, Honolulu’s case will head to trial. Companion cases are in discovery and motions practice. Energy companies face the prospect of “countless sums in litigation costs and” are “threatened with damages awards that could run into the billions of dollars.” They may have no choice but to settle with the plaintiffs, agreeing to dramatic changes to their business practices in order to avoid crushing monetary judgments. The justices should not risk this outcome and reward ideological gamesmanship.