The U.S. Supreme Court heard arguments on Monday in a landmark case involving whether local governments can hold oil companies liable for damages attributed to climate change. The lawsuit, brought by the city and county of Boulder, Colorado, targets ExxonMobil and Canada-based Suncor Energy, alleging that the companies contributed significantly to global warming and should bear financial responsibility for the resulting impacts such as droughts, wildfires, floods, and related infrastructure and health costs.

The case, which began in 2018, contends that the fossil fuel producers “knowingly and substantially” fueled climate change by producing and promoting fossil fuels while allegedly concealing the associated risks. Boulder officials argue that local taxpayers should not have to shoulder these costs alone. After the Colorado Supreme Court allowed the suit to proceed in state court, the oil companies appealed to the U.S. Supreme Court, which took the case to address broader questions of jurisdiction and federal preemption.

During the nearly two-hour oral arguments, justices questioned whether federal law bars such lawsuits and whether the case is appropriate for resolution at the Supreme Court level at this point in the litigation. Conservative justices expressed skepticism about expanding liability in this way, raising concerns that a ruling in Boulder’s favor could lead to a flood of similar lawsuits across all states. Chief Justice John Roberts asked how the courts would manage potentially dozens of copycat suits, while Justice Brett Kavanaugh warned about the economic consequences for energy companies. Kavanaugh and Justice Amy Coney Barrett both noted prior rulings emphasizing that environmental pollution, particularly air and water pollution crossing state lines, is primarily a federal matter.

Conversely, the court’s liberal justices showed greater sympathy to Boulder’s position. Justice Elena Kagan likened the case to previous landmark litigation against tobacco and opioid companies, suggesting that holding fossil fuel companies accountable might represent a next chapter in addressing widespread public health harms. Justice Ketanji Brown Jackson questioned whether the Supreme Court’s intervention might be premature, noting the early stage of the litigation.

The Trump administration’s position in the case, now represented by the Biden administration, has shifted: the current Justice Department supports dismissing the lawsuit and argues that climate change regulation is a federal responsibility. Sarah M. Harris, a principal deputy solicitor general, framed interstate air pollution as an inherently federal domain, arguing that state courts are not the proper venues for such litigation.

Justice Samuel Alito recused himself from the case shortly before oral arguments, citing prudence amid calls for recusal due to his ownership of stock in oil companies not named in the lawsuit and prior recusals in similar matters. His absence creates the potential for a 4-4 tie, which would affirm the lower court’s ruling without setting a national precedent.

The outcome of this case has widespread implications, as dozens of states, cities, and tribes have filed or are preparing similar lawsuits against fossil fuel companies seeking damages for climate-related harms. Meanwhile, Congress is considering legislation that could shield oil companies from such state-level claims, which could ultimately affect or override the legal battles currently unfolding in court. A decision in the case is expected by the end of the Supreme Court’s term in late June or early July.