Supreme Court Case in Hawaii May Lead to Increased Gas Prices for Consumers
Aloha spirit be damned, the Hawaii Supreme Court has decreed the oil industry unwelcome in the state.
In a ruling late last year, the court upheld the city of Honolulu’s right to sue Sunoco, Exxon, ConocoPhillips, and other companies for alleged damages caused by their products’ greenhouse gas emissions.
Now, the decision may be brought to the US Supreme Court to determine if climate change falls under special federal jurisdiction or if states can take action against Big Oil. If states are allowed to proceed, the result could be higher energy prices for all Americans due to the legal battles ahead.
The core of Honolulu’s claim is that the oil companies’ actions over the years have been deceptive regarding the effects of their fossil fuel products, constituting tortious conduct.
They argue that products sold by Sunoco and others when combusted emit gases that contribute to the greenhouse effect, warming the planet and causing environmental damage such as melting glaciers and rising sea levels.
The resulting rise in sea levels, according to their claim, has led to historical and projected environmental disruptions that have affected the City.
This case highlights the complexity of attributing climate damage as emissions contribute to incremental sea level rise. However, pinpointing specific companies responsible for the costs of managing rising water remains challenging.
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, necessitating coastal adaptation measures, as stated by Honolulu.
However, other factors beyond sea level rise, such as land use and Hawaii’s volcanic geology causing the islands to sink lower each year, also contribute to the City’s challenges.
Thankfully, the Supreme Court’s decision would focus on the legal aspects of Honolulu’s case, determining state authority over climate change rather than scientific technicalities.
In June 2024, SCOTUS requested the Biden administration’s Solicitor General for their opinion on the matter of federal preemption challenged by the oil companies in their appeal of the Hawaii Supreme Court ruling.
The appeal argues that federal law, specifically the Clean Air Act, supersedes state law claims. As the Biden presidency nears its end, a response from the Solicitor General regarding the Supreme Court’s involvement in the appeal is imminent.
If SCOTUS decides to review the case, they will consider the constitutional implications raised by the oil companies, drawing on previous air and water pollution cases where the companies had legal precedence.
In 1987, the Rehnquist court ruled in International Paper Company v. Ouellette that the Clean Water Act preempted a nuisance suit filed in Vermont under Vermont law when the alleged injury source was in New York.
In 2011, the Roberts court unanimously made a similar decision in a Clean Air Act case, American Electric Power Company v. Connecticut.
Justice Ruth Bader Ginsberg’s opinion then, that “it is primarily the office of Congress, not the federal courts, to prescribe national policy in areas of special federal interest,” is pertinent today.
Most recently, in 2021, the US Court of Appeals for the Second Circuit affirmed a federal district court decision in City of New York v. Chevron that multinational oil companies cannot be held liable for damages caused by global greenhouse gas emissions using state tort law.
As George Mason University legal scholar Donald Kochan argues, the Hawaii Supreme Court’s ruling creating legal dissonance necessitates the US Supreme Court’s intervention.
Given the widespread nature of the issues at hand, this is a federal matter that should be addressed at the national level. Hawaiians, like all Americans, have representation in Congress to address climate change through federal legislation.
If the case proceeds in Hawaii, it could disrupt the national commercial market and legal structure that contribute to America’s productivity, wealth creation, and shared prosperity.
Jordan McGillis is the economics editor of City Journal.
