Maryland Supreme Court Affirms Dismissal of Municipal Climate Litigation Against Energy Companies

The court held that the municipalities’ claims were preempted by federal law and alternatively failed to state plausible claims under Maryland common law. 

The ruling digs a new trench in the escalating battle over state-court climate tort litigation. As we have detailed before, proponents of climate regulations are increasingly turning to state courts to press their claims. High courts in both Hawaii and Colorado have allowed suits against energy companies to proceed, reasoning that claims related to fossil fuel production and promotion — as opposed to use — were not preempted by federal law governing the regulation of emissions, e.g., the Clean Air Act (CAA). Maryland broke sharply from those decisions, aligning instead with the Second Circuit and courts in South Carolina that we previously discussed which concluded that the state-law claims were preempted.

This preemption holding arrives at a pivotal moment. The US Supreme Court recently granted a writ of certiorari in the Colorado case, agreeing to address “[w]hether federal law precludes state-law claims seeking relief for injuries allegedly caused by the effects of interstate and international greenhouse-gas emissions on the global climate” while adding its own question regarding its “statutory and Article III jurisdiction to hear th[e] case.” In declining to stay its ruling pending the Supreme Court’s review of the Colorado case, the Maryland Supreme Court observed that the Supreme Court’s jurisdictional question may prevent it from reaching the merits and that a contrary ruling from another high court could prove useful. As discussed below, Maryland’s analysis offers the Supreme Court a roadmap for keeping state courts out of the business of regulating global emissions. 

Maryland’s Decision

Three suits consolidated for purposes of appeal — brought by the Mayor and City Council of Baltimore, the City of Annapolis, and Anne Arundel County — gave rise to the decision. The Baltimore litigation, filed in July 2018, had already reached the Supreme Court on the question of removal — the case was removed to federal court, remanded back to state court, a finding which was affirmed by the Fourth Circuit, vacated and remanded by the Supreme Court, and affirmed again by the Fourth Circuit. In that earlier posture, the Fourth Circuit found no federal questions implicated by Baltimore’s lawsuit. The Maryland Supreme Court disagreed, concluding at the motion-to-dismiss stage that federal interests controlled the outcome. 

At the heart of the complaints, the municipalities alleged that the defendants had known for 50 years of a direct link between fossil fuels and climate change, yet concealed that knowledge, discredited publicly available scientific evidence, and sowed public doubt about the impacts of fossil fuel pollution. The alleged harms included rising sea levels, increased coastal erosion, exacerbated storm surges and tidal effects, disruption of the hydrologic cycle, more severe and frequent extreme weather events, and related social and economic injuries. The alleged tortious conduct encompassed extraction, processing, selling, promoting, and concealing the risks of fossil fuels while failing to pursue less hazardous alternatives. The suits asserted claims under Maryland law for public nuisance, private nuisance, strict liability for failure to warn, negligent failure to warn, and trespass. 

Central to the municipalities’ strategy was the argument that their suits did not seek the abatement of pollution and instead targeted deceptive marketing and statements — not fossil fuel consumption. This framing had persuaded the Colorado Supreme Court to allow similar claims, and it echoed the approach that litigants in tobacco cases had used to avoid preemption. The Maryland Supreme Court rejected the framing. The court characterized the municipalities’ “myopic view of their claims” as “creative pleading” designed “to utilize state law to regulate global conduct that is purportedly causing global harm.” It was equally unmoved by the municipalities’ election for damages over injunctive relief, reasoning that significant damages awards can regulate an industry as effectively as direct policy changes. The principal concurrence and dissent took exception, describing the majority as declining to “decide the case [the p]laintiffs brought” in favor of deciding “the case [the d]efendants described” — something that “no court, state or federal, has previously done” in the climate tort context. 

That threshold finding triggered cascading consequences. The Maryland Supreme Court concluded that federal common law displaced the state-law claims, that the CAA in turn preempted that federal common law, and that the state-law claims had not snapped back to fill the void. For claims concerning extraterritorial emissions, judicial canons of restraint regarding interference with foreign affairs served to justify dismissal. This analytical framework closely tracks the Second Circuit’s reasoning in City of New York v. Chevron Corporation which affirmed the dismissal of similar claims. As an independent and potentially adequate basis of state law, the court also concluded that the tort claims failed to state claims for relief because the alleged harms were not unique to the municipalities, the defendants’ lacked control over particular particulates, and no relevant duty was owed to the municipalities. 

Broader Implications

The decision carries broad implications for stakeholders across the energy and climate sectors, demonstrating some judicial reluctance to use state tort law to address a problem of global scale.

• Preemption Formalism or Realism: The Maryland Supreme Court’s holding depends on the premise that the CAA preempts state-level regulation of greenhouse emissions, but the federal government’s own position on that question has shifted. As amici in the analogous Hawaii case, the United States argued that Hawaiian tortious marketing claims were not preempted by the CAA. Before the Maryland Supreme Court, the United States reversed course and contended that state law did not apply. Some view the reversal as hard to square with the US Environmental Protection Agency’s (EPA) February rescission of the Greenhouse Gas Endangerment Finding and its conclusion that the CAA does not authorize regulation of greenhouse gases for climate purposes. How other courts will balance the position that federal government has fully occupied the field of climate regulation while simultaneously revoking the endangerment finding remains an open question.

• Whose Molecule Is It Anyway?: A concurrence in the decision identifies “a mismatch between the structure of tort law and the nature of the harm alleged” in suits like Baltimore’s. “No single extraction decision, no single sale of fuel, and no single consumer transaction creates a foreseeable risk of harm to any identifiable person.” Unlike tobacco litigation — where litigants could trace a direct causal chain from specific brands smoked for decades to an individual’s cancer — climate claims may require tracing which molecule of carbon dioxide, emitted by the consumption of which barrel of oil, caused a particular harm. The inability to attribute blame to a specific actor complicates fashioning a remedy proportional to that actor’s harm. The scope of potential climate related damage and absence of source identifiers on carbon dioxide molecules present analytical issues that some courts are leery to resolve. 

• Lengthy Lawsuits: The Baltimore litigation alone required three separate appellate decisions to resolve which court should hear the defendants’ motion to dismiss — often the first contested motion in any case. Litigants will continue to pursue novel theories and new venues in search of receptive forums for this pressing issue. Complex questions of jurisdiction, preemption, and redressability will persist over the course of protracted litigation, demanding counsel with deep subject-matter expertise and a long-term perspective. 

Stay tuned for further updates on climate tort cases. Members of the firm’s Environmental, Energy & Cleantech, and Environmental, Social & Governance teams regularly monitor regulatory and court decisions affecting the energy space.