Blockbuster legal fights over climate policy are on the horizon this year as the Trump administration and business interests head to court to prevent states from reining in greenhouse gas emissions and forcing some of the largest U.S. companies to disclose climate risks.
Climate could also once again become a major issue at the Supreme Court in 2026, as the justices consider an oil industry bid to stop states, cities and counties nationwide from holding the fossil fuel industry financially accountable for rising global temperatures.
Beyond the courtroom, the administration is expected to soon finalize the rollback of a 2009 finding that underpins most climate rules, stoking debate over whether doing so will weaken an argument the oil industry has used to defend itself against liability lawsuits.
The legal fights come as the scope of climate litigation expanded in 2025. An Oregon woman accused the oil and gas industry of contributing to her mother’s death during a heat wave. Washington state homeowners filed a landmark lawsuit against oil majors arguing that climate change has caused more frequent and intense natural disasters, leading insurance premiums to rise.
“Climate litigation is evolving rapidly and is a symptom of the failure of governments everywhere to take meaningful action to address the threat,” said Pat Parenteau, emeritus professor at Vermont Law and Graduate School.
Still, the Trump administration is alone in “working overtime to prevent any of these cases from coming to trial,” Parenteau said.
“Other governments may oppose remedies being sought in some of the cases, but not they’re denying the reality of the threat or arguing that courts have no role whatsoever in adjudicating the issues,” said Parenteau, who has provided pro bono advice to a law firm bringing climate lawsuits in the U.S.
Here are five key climate issues that will play out in court in 2026:
1. DOJ battles states
The Department of Justice last spring sued four Democratic-led states, spurred by an executive order Trump signed in April instructing DOJ to target state laws the president says are “burdening” fossil fuel production.
DOJ’s lawsuits carry “potentially far‑reaching consequences for traditional energy companies,” the law firm Jones Day wrote in a recent note to clients.
Two of the lawsuits — against New York and Vermont — aim to invalidate state laws creating “climate Superfunds” that seek payment from energy producers for greenhouse gas emissions. If courts agree the state laws are barred by federal law, DOJ’s lawsuits could lead to a “de facto nationwide federal shield against state climate torts and ‘climate Superfund’ recovery schemes,” Jones Day attorneys wrote.
If New York and Vermont prevail, “traditional energy producers could face retroactive exposure untethered to federal permitting,” the law firm wrote.
“Either outcome,” Jones Day said, “will affect litigation risk and strategy across the energy value chain.”
DOJ’s lawsuits haven’t discouraged other states from considering their own climate Superfund laws. New Jersey lawmakers will discuss a proposed law in January, and Maryland has decided to investigate the possibility.
The Trump administration has also sued Hawaii and Michigan, seeking to block the states from joining their Democratic counterparts in launching lawsuits that ask the oil industry to foot the bill for climate impacts.
Hawaii has filed a climate liability lawsuit. Michigan has considered filing but has not yet started a case.
2. California climate disclosure
California’s first-in-the-nation climate disclosure laws had been set to take effect Jan. 1 before a federal appeals court in November pumped the brakes on one measure requiring major companies to report climate risks.
The decision by the 9th U.S. Circuit Court of Appeals came just after the U.S. Chamber of Commerce urged the Supreme Court to block the climate disclosure laws, arguing the appellate court had failed to act.
The 9th Circuit suspended SB 261 — which was scheduled to take effect in January — pending appeal. The law would require businesses with revenues of more than $500 million to disclose climate-related financial risks and measures taken to mitigate and adapt.
The court declined to stop enforcement of the second law — SB 253 — which takes effect in June. It would require corporations with at least $1 billion in revenue to report carbon emissions across their supply chains, along with emissions connected directly to their operations and energy purchases.
The sweep of California’s laws means they likely apply to most large companies across the United States, and they have drawn increased attention since the Trump administration withdrew a Biden-era climate disclosure rule advanced by the Securities and Exchange Commission.
Oral arguments on the matter are scheduled for Jan. 9. The California Air Resources Board has said the Jan. 1 deadline is no longer in effect, but companies may voluntarily report.
Exxon Mobil in October filed its own lawsuit against California, arguing the state’s disclosure laws seek to embarrass large fossil fuel producers in the hope that they will be “shamed into curbing their emissions.” The state has filed a motion to dismiss.
3. Taxing tourists to pay for climate change
A federal appeals court has temporarily blocked Hawaii from imposing a tax on cruise ship passengers to offset the costs of climate change.
The 9th Circuit issued the block on Dec. 31, a week after a lower court rejected a request from the cruise industry and Trump administration to stop the first-in-the-nation fee from taking effect Jan. 1.
The cruise industry sued the state in August, seeking to halt its plans for an 11 percent surcharge on the gross fare paid by a cruise ship’s passengers.
The Trump administration got involved in November, calling Hawaii’s “green fee” a “scheme to extort American citizens and businesses.”
Deputy Assistant Attorney General Bradley Craigmyle last month told Judge Jill Otake of the U.S. District Court for the District of Hawaii that the fee conflicts with federal law barring states from taxing vessels operating in U.S. waters. The state has said it is “confident in the legality” of its law.
The state will be able to increase fees on hotel room and vacation rentals, but the 9th Circuit stayed the cruise tax until it hears the case on an expedited schedule.
4. A Supreme Court battle royale
The nation’s highest bench will soon reveal whether it will take up the oil and gas industry’s latest effort to quash a swath of lawsuits seeking to hold companies financially accountable for the costs of climate change.
Exxon Mobil and Suncor Energy have asked the justices to find that federal law bars local governments from seeking relief for climate change in state courts. A decision to take up the case would be a significant — if preliminary — win for the companies, which have warned that the liability lawsuits could cost them billions of dollars.
It takes the vote of four justices to agree to hear a petition, a threshold most requests fail to achieve. The court rebuffed similar efforts twice in 2025 but did hand energy companies a narrow procedural win in the litigation in 2021.
The Trump administration has backed the oil companies’ petition, boosting its chance of being heard by the justices.
Oil industry lawyers have argued there is a “clear and acknowledged conflict” as to whether federal law precludes local governments from suing fossil fuel producers for the alleged effects of global greenhouse gas emissions.
Boulder, which sued the oil companies, has argued that states have always had the authority to police in-state injuries, pointing to similar lawsuits against the manufacturers of opioids and asbestos.
5. Endangering a key oil industry defense
Even as oil and gas producers challenge climate liability lawsuits at the Supreme Court, the industry has notched nearly a dozen wins against the local governments that are suing them, convincing judges the claims are preempted by the Clean Air Act.
But fossil fuel companies’ winning argument could be undercut by the Trump administration’s move to repeal the endangerment finding, the 2009 EPA decision that serves as the foundation for many federal climate regulations.
“It’s been their go-to, the one that has knocked the cases they’ve won out of court,” said Parenteau of Vermont Law and Graduate School.
The Sierra Club said in a recent report that repealing the Obama-era finding would expose polluters to “significant common-law liability” because EPA would no longer be authorized to address interstate greenhouse gas emissions.
Oil companies’ argument has been that a 2011 Supreme Court case — American Electric Power v. Connecticut — bars plaintiffs from suing climate polluters under federal common law because greenhouse gas emissions are regulated by the Clean Air Act.
“Repealing EPA’s authority to regulate climate pollution under the Clean Air Act would be a disastrous decision for many reasons,” and Andres Restrepo, a senior attorney at the Sierra Club, adding the environmental group “would explore all possible avenues — including but not limited to litigation — to hold polluters accountable in the absence of federal action.”
Donald Kochan, executive director of the Law & Economics Center at George Mason University’s Antonin Scalia Law School, called the theory “wholly unpersuasive.” The Supreme Court, he said, will determine whether the Clean Air Act preempts legal challenges by looking at what Congress has authorized an agency to do — not by what an agency has chosen to do.
“Their argument is that if the federal government steps back, the states are allowed to step in,” Kochan said. “But the courts are looking at whether or not Congress has chosen to exercise its federal statutory authority in this space, not whether the executive agencies have chosen to act in this space.”
He said courts look to reach decisions “based on fixed law, not on the changing nature of executive discretion.”
Still, the uncertainty has put the industry on edge, said Jeff Holmstead, a partner at Bracewell who headed EPA’s air regulations office during the George W. Bush administration. Some of the larger trade associations, he said, have raised concerns about the proposal.
The Chamber of Commerce in its public comments on the endangerment finding repeal sought to reaffirm that the Clean Air Act would “continue to displace” federal common law claims regarding greenhouse gas emissions. It also asked EPA to note that state laws imposing climate liability are barred under federal law.
“I don’t want to overstate the industry’s concern,” Holmstead said. “They view it as something that may increase their litigation risk, but companies are also starting to weigh that against the uncertainty of having EPA regulations.”
