A Supreme Court case in Hawaii could raise gas costs for us all

Aloha spirit be damned, the Hawaii Supreme Court has deemed the oil industry unwelcome in the state.

In a ruling late last year, the court affirmed that the city of Honolulu could file a lawsuit alleging that Sunoco, Exxon, ConocoPhillips, and an assortment of other companies have caused it injury via their products’ greenhouse gas emissions.

Now it may be up to the US Supreme Court to set the matter straight: Is climate change an area of special federal interest or can states give Big Oil the boot? If the latter, the outcome from 50 new sets of legal hoops is inevitably higher energy prices for all Americans.

Honolulu’s core claim is that the oil companies’ “efforts between 1965 and the present to deceive about the consequences of the normal use of their fossil fuel products” constitute tortious conduct.”

The chain of reasoning is that Sunoco et al have marketed and sold products that, when combusted, emit carbon dioxide and other gasses, exacerbating the greenhouse effect, warming the planet, melting glaciers, and causing sea levels to rise.

That rising water, the argument goes, has caused “historical, projected, and committed disruptions to the environment — and consequent injuries to the City.”

Honolulu’s claim underscores how difficult climate damage attribution really is. Yes, emissions add incrementally to sea level rise. But, no, we cannot attribute with confidence a portion of the cost of managing rising water to particular companies.

According to the US government’s Interagency Sea Level Task Force, the Hawaiian Islands are expected to experience 6-8 inches of sea level rise by 2050. That will surely require some coastal adaptation measures, as Honolulu says.

But what the City is slower to acknowledge is that factors other than sea level rise are playing a part in its troubles too — including its own land use and the unlucky fact that Hawaii’s volcanic geology is resulting in the islands sagging lower year by year.

Mercifully, the Supreme Court wouldn’t be weighing in on the scientific technicalities of Honolulu’s tort claim, but rather on whether Hawaii — or any other state — has climate change authority at all.

In June 2024, SCOTUS asked the Biden administration’s Solicitor General for the federal government’s opinion on the matter of federal preemption raised by the oil companies in their appeal of the Hawaii Supreme Court decision.

The appeal argues that federal law — namely the Clean Air Act — supersedes state law claims. As we near the end of the Biden presidency, a filing from the Solicitor General in favor or opposed to the Supreme Court taking up this appeal is imminent. 

If SCOTUS does so, how might the justices consider the constitutional questions at hand? Related air and water pollution cases suggest the oil companies have precedent on their side.

In 1987, the Rehnquist court decided in International Paper Company v. Ouellette that the Clean Water Act preempts a common-law nuisance suit filed in a Vermont court under Vermont law, when the source of the alleged injury was located in New York.

In 2011, the Roberts court unanimously reached a similar decision in a Clean Air Act case, American Electric Power Company v. Connecticut.

Justice Ruth Bader Ginsberg’s opinion for the court then, that “it is primarily the office of Congress, not the federal courts, to prescribe national policy in areas of special federal interest,” applies today just the same.

Most recently, in 2021, the US Court of Appeals for the Second Circuit upheld a federal district court decision in City of New York v. Chevron that a municipality cannot “utilize state tort law to hold multinational oil companies liable for the damages caused by global greenhouse gas emissions.”

As George Mason University legal scholar Donald Kochan argues, the 2023 Hawaii Supreme Court ruling that the City of Honolulu’s case could proceed creates just the kind of national legal dissonance that requires the US Supreme Court to step in. 

Given the dispersed nature of the corporate actions in question, this is a federal matter, not a state matter. Hawaiians, like citizens of the other 49 states, are represented in House and Senate and can channel their political energy through federal legislation.

If this case goes forward in Hawaii, it will jeopardize the national commercial market and legal framework that makes America, despite it all, the best big country in the world for productivity, wealth creation, and widely-shared prosperity. 

Jordan McGillis is the economics editor of City Journal.