Biden Judge Dismisses Democrat AG’s Climate Claim As ‘Speculative’

A Biden-appointed federal judge tossed Michigan’s lawsuit against major oil companies Tuesday, finding its attempt to link a decades-old alleged conspiracy to current energy costs too “speculative.”

U.S. District Judge Jane Beckering dismissed Democratic Michigan Attorney General Dana Nessel’s federal antitrust claim against BP, Chevron, ExxonMobil, Shell and the American Petroleum Institute (API), ruling that the state lacked antitrust standing. Then-President Joe Biden nominated Beckering to the U.S. District Court for the Western District of Michigan in 2021.
“This decision adds to the growing list of federal and state courts that have dismissed climate lawsuits. These climate suits are baseless no matter plaintiffs’ attempts to concoct new litigation theories, like these meritless antitrust claims,” Theodore J. Boutrous, Jr. of Gibson, Dunn and Crutcher LLP, counsel for Chevron Corporation told Daily Caller News Foundation.

Nessel filed the lawsuit in January, alleging the companies acted as a cartel to suppress competition from renewable energy and preserve their dominance in Michigan’s transportation and primary energy markets.

Beckering’s opinion cited a previous federal appellate decision warning that it would be “entirely speculative and beyond the competence of a judicial proceeding to create in hindsight a technological universe that never came into existence.”

“The Court concludes that these damages calculations are sufficiently speculative to suggest that Defendants’ alleged conspiracy did not proximately cause Plaintiff’s overcharges,” she wrote.

Beckering found most of those alleged harms were outside the scope of federal antitrust law.

“These harms are, at most, ‘collateral damage’ with respect to the markets in which Michigan alleges Defendants conspired: the transportation and primary energy markets,” Beckering wrote. “Therefore, Michigan cannot invoke the antitrust laws to remedy these harms.”

That left Michigan with one plausible antitrust injury: allegedly paying too much to power the state.

Michigan has plausibly pled just one antitrust injury: overcharges for energy,” Beckering wrote.

The judge found that suppressing competition from renewable energy could plausibly increase energy prices, noting that price increases are a conventional form of antitrust injury.

The alleged conspiracy’s effect on fossil fuel prices would depend on numerous forces outside the defendants’ control, Beckering noted, including technological developments, other investors, public interest in renewable energy and fossil fuel supplies.
Calculating damages would require determining how much lower energy prices would have been in a world where the alleged conduct never occurred.

The companies could reasonably have foreseen that suppressing renewable alternatives would increase energy prices and that maintaining elevated fossil fuel prices was an alleged purpose of the conspiracy, Michigan argued. Beckering acknowledged those considerations favored Michigan’s causation argument, but found they were outweighed by “the indirectness of the injury, the uncertain causal chain, and the existence of other potential plaintiffs.”

Michigan alleged the conspiracy stretched back to the 1970s and sought damages for inflated energy prices, higher insurance premiums, depressed home values and other alleged harms. Its case echoed the 1972 Supreme Court decision Hawaii v. Standard Oil Co., which held that federal antitrust law did not allow Hawaii to recover damages for alleged injury to its general economy.

Beckering cited the Hawaii case while laying out Michigan’s authority to pursue monetary and injunctive antitrust relief on behalf of itself and its residents. The 1972 ruling recognized a state can sue for money it directly lost or spent itself — and it can ask a court to stop unlawful conduct, but it generally cannot collect antitrust damages simply because its overall economy was harmed.

The decision comes amid a broader legal fight over attempts by states and municipalities to hold fossil fuel companies liable for alleged climate-related harms.

Courts have rejected several such lawsuits, though others remain pending. The Maryland Supreme Court, for example, upheld the dismissal of climate lawsuits brought by Baltimore, Annapolis and Anne Arundel County against oil and gas companies.

Michigan has also become a battleground over fossil fuel infrastructure and climate policy. The Michigan Supreme Court in July vacated state regulators’ approval of Enbridge’s Line 5 tunnel project and sent the matter back to the Michigan Public Service Commission for additional proceedings. Nessel has separately sought to shut down Line 5, arguing the pipeline threatens the Great Lakes.

The Michigan dismissal comes less than two weeks before the U.S. Supreme Court is scheduled to hear one of the most closely watched climate-liability disputes currently before the justices.

The Supreme Court is scheduled to hear oral arguments Oct. 5 in Suncor Energy v. County Commissioners of Boulder County, a Colorado case asking whether federal law preempts state-law claims seeking damages tied to interstate and international greenhouse gas emissions.

The case stems from a 2018 lawsuit brought by Boulder County, the city of Boulder and San Miguel County against Suncor Energy and ExxonMobil. The Colorado governments allege the companies promoted fossil fuels while concealing or misrepresenting their climate risks. Suncor and Exxon dispute the allegations and argue states cannot use state tort law to regulate or impose liability for worldwide greenhouse gas emissions.

Climate-litigation advocates, states, industry groups and other organizations have filed briefs in the case as the justices prepare to consider the boundary between state tort law and federal authority over interstate emissions.