The Trump administration lost a legal fight to stop Michigan from suing the oil and gas industry over climate change. But the Department of Justice maintains it actually won.
That’s because instead of joining 10 other states in filing a climate liability lawsuit in state court, Michigan filed in federal court, where the fossil fuel industry believes it can defeat litigation that seeks to hold companies financially accountable for rising global temperatures.
And rather than echo other states’ arguments that oil companies violated state consumer protection laws by deceiving the public about the dangers of burning fossil fuels, Michigan took a new tack: It claimed instead that the industry broke state and federal antitrust laws, acting as a “cartel” to sideline renewable energy and electric vehicles.
Both moves, the Trump administration has said, are proof that its efforts to block states from tackling climate change are working.
“Our suit against Michigan had its intended effect,” Adam Gustafson, principal deputy assistant attorney general of DOJ’s environment division, told POLITICO’s E&E News last month.
He said DOJ’s lawsuit, which sought to block Michigan’s case, forced the state to abandon state law claims and “content itself with novel federal claims in federal court.”
That’s not how Michigan Attorney General Dana Nessel sees it. Nessel, a Democrat who in late 2024 brought on a legal team that includes two firms with antitrust experience, said the state’s effort began as an investigation into oil companies’ deception about climate change.
Instead, she said, the state’s probe “uncovered one of the most successful antitrust conspiracies in United States history.”
DOJ’s lawsuit seeking to derail Michigan’s lawsuit was dismissed in January, one day after the state filed its case against four of the largest oil producers and the American Petroleum Institute. DOJ’s lawsuit “had no bearing on our filed claims,” said Danny Wimmer, a spokesperson for Nessel.
Across the United States, fossil fuel companies and their allies face more than two dozen climate liability lawsuits from mostly Democrat-controlled states, cities and counties. Each case contends that the oil industry should help foot bill for the costs of responding to wildfires, flooding and other effects of a warming planet.
Michigan’s lawsuit comes as the Supreme Court has agreed to take up the industry’s bid to crush the swath of climate lawsuits and determine whether federal law bars the cases from being heard in state court.
By suing in federal court, Michigan has sidestepped those arguments and presumably could keep its case on track while the others face potential delay due to the high court’s review, said Aaron Regunberg, director of Public Citizen’s Climate Accountability Project.
“Everything that I’ve seen and read shows Michigan has been working on this lawsuit for a long time, and I think there are political and zeitgeist reasons to focus on an affordability message,” Regunberg said, noting Michigan’s lawsuit arrives amid a push for greater corporate responsibility.
“People are realizing antitrust laws are very powerful,” Regunberg said. “It feels appropriate to extend the goals of antitrust law, which is to have a fair, competitive playing field to the climate and energy sector, where the results of anticompetitive collusion is arguably more serious than anywhere else.”
‘Notoriously difficult and expensive’
It’s not all smooth sailing for Michigan’s quest to put oil companies on the hook for climate change.
“Antitrust cases are notoriously difficult and expensive to prove,” said Gwendolyn Lindsay Cooley, a former Wisconsin assistant attorney general and former chair of the National Association of Attorneys General antitrust task force.
In its lawsuit, Michigan asserted oil and gas majors and the American Petroleum Institute conducted a sprawling “conspiracy” to impede green energy. It began, the lawsuit said, in 1979 after an Exxon Mobil study found it would be necessary to have renewable energy supply at least 50 percent of global energy demand by 2010 to avoid catastrophic climate change.
Michigan’s lawsuit alleged oil companies used patent litigation to hinder rivals, suppressed information about the “hidden costs” of burning fossil fuels, tried to discredit scientific studies documenting the severity of climate change and used hackers to intimidate watchdogs.
The state argued the companies’ “collusion” has raised energy prices for Michigan consumers and set back alternatives to gas-powered transportation.
Without such concerted efforts by the companies, the state claimed, electric vehicles “would not be a fringe technology or a luxury alternative.”
Michigan’s lawsuit could face “major headwinds,” due to how the courts treat antitrust cases, said Ben Steinberg, a partner at Shinder Cantor Lerner, which focuses primarily on antitrust law.
Antitrust cases generally center on monopolistic conduct and conspiracies that restrain competition. Michigan’s lawsuit focuses on a conspiracy, and to prove its claims, the state must show an agreement or acknowledgment between competitors — a “meeting of the minds,” Steinberg said.
The state will also have to show oil companies’ conduct relates to price or commerce in some way.
“If two competitors agree, ‘Hey, we’re going to both publish an article about technologies,’ that’s an agreement to publish an article, but it doesn’t affect trade,” said Steinberg. “It’s not a restraint of pricing.”
Steinberg, who primarily represents plaintiffs in antitrust cases, said he supports using antitrust laws aggressively to combat anticompetitive conduct. But he said he believes Michigan has “two big hurdles to overcome.”
The first will be to prove there was an agreement for decades among the fossil fuel companies to stifle renewable energy technologies, as opposed to the companies working toward their self interest, promoting fossil fuels.
The second hurdle will be tying the allegations to pricing, he said, noting some of the alleged agreements in the lawsuit, such as working together to influence government policy, “may not be in the bull’s-eye” of what courts look at when it comes to an illegal conspiracy to restrain trade.
“The further the conduct strays from pricing, the harder it is to have your allegations recognized as illegal,” he said.
Gary Mouw, a lawyer with the Michigan-based law firm Varnum, suggested similar pitfalls.
“Given the complaint’s reliance on broad, decades-long industry patterns and association activity rather than concrete, recent agreements to restrict output of substitutes in Michigan, the case faces a meaningful risk of dismissal,” he wrote in a post on the firm’s website.
Big payday potential
Should Michigan prevail, however, the state could seek an award of triple its damages, said Cooley, the former Wisconsin attorney general.
That prospect makes antitrust cases “very compelling,” she said.
Cooley added that Michigan has “quite clearly alleged harm to competition, and now they will need to prove it, and have hired outside counsel to help with it, which will help them find the human power to prosecute the case.”
Michigan has hired DiCello Levitt and Hausfeld, two law firms with considerable antitrust experience, to work the case along with Sher Edling, a California-based law firm that represents municipalities in climate lawsuits around the country.
DiCello Levitt’s website says it has “led the charge in some of the most significant private antitrust litigation over the last several decades.” That includes securing $120 million for plaintiffs who alleged that several global financial institutions manipulated prices in the $8 trillion market for European government bonds.
Hausfeld says it has been ranked among the top five firms in the U.S. for representing plaintiffs in antitrust litigation, including prevailing in a $2.67 billion antitrust class-action lawsuit against Blue Cross Blue Shield insurance plans.
Antitrust allegations in climate lawsuits are rare, but not unprecedented.
A 2022 lawsuit against the oil industry brought by a group of Puerto Rico municipalities raised antitrust allegations, accusing companies of having “consciously committed to a common scheme designed to restrain trade.”
The Puerto Rico case, which also accused the fossil fuel industry of violating a federal racketeering law best known for its role in cracking down on organized crime, was dismissed by a federal judge last year for falling outside the four-year statute of limitations.
The case is under appeal.
