Sustainable Energy & Infrastructure Litigation Updates — June 2025

Federal Regulation & Investigations

The SEC’s mandatory climate disclosure rule remains stayed pending the outcome of the current litigation in the Eighth Circuit. Recently, however, Republican SEC Commissioner Mark Uyeda suggested that the Trump administration would not directly undo this initiative by the Biden administration through undertaking the lengthy administrative process to rescind the mandatory climate disclosure rule — a position advocated by certain opponents of the rule to avoid the uncertainty of litigation — because Commissioner Uyeda thought that exercise would be a “significant strain on the Commission’s resources.” The commissioner further noted the value of a court opinion on the validity of the mandatory climate disclosure rule, as that would “answer[] . . . key questions of statutory authority and compliance with the [Administrative Procedures Act].” In other words, Commissioner Uyeda appears to believe that a court decision concerning the climate disclosure rule could potentially limit future efforts by the SEC to enact regulations beyond what he perceives as the agency’s appropriate remit, causing him (and presumably the SEC) to embrace that tactical approach.

Recently, two senior Democratic Senators — Warren (D-MA) and Whitehouse (D-RI) — sent letters to certain major US banks that had announced their withdrawal from the Net Zero Banking Alliance earlier this year. That move by the banks — which was criticized by a number of climate activists at the time — was likely undertaken in response to the policy priorities of the Trump administration. These letters, which reportedly “seek to examine the extent to which banks have allegedly caved in to pressure from Republicans and fossil-fuel interests to abandon their fiduciary duty to manage the financial risks that stem from climate change,” indicate a likely regulatory and enforcement agenda should the Democratic Party retake control of one of the houses of Congress. At the moment, though, the practical impact of these letters is limited — the Democratic Senators spearheading this effort, as members of the minority party, do not have the power to convene hearings or issue subpoenas. Nonetheless, these letters not only offer a roadmap for potential investigations or enforcement actions by sympathetic state attorneys general, but also signal that the conflict over the degree to which business interests must take into account climate concerns has not concluded, despite the Trump administration’s recent actions and policy pronouncements.

Litigation

There have been a number of developments with respect to climate tort litigation. (By way of background, over the past several years, a number of state and local governments have launched lawsuits against major fossil fuel companies seeking tort damages attributable to climate change.) The past month has seen two noteworthy decisions among this array of cases.

First, on May 12, 2025, the Colorado Supreme Court held that the tort claims brought by local governments in Colorado against major fossil fuel companies concerning damages stemming from climate change could proceed. Specifically, the Colorado Supreme Court held that “Boulder’s claims are not preempted by federal law and, therefore, the district court did not err in declining to dismiss those claims.” However, the court specifically noted that it “express[ed] no opinion on the ultimate viability of the merits of Boulder’s claims.” This decision is largely similar to, and echoes the reasoning of, the decision by the Hawaii Supreme Court to allow parallel claims by local governments in Hawaii to proceed.

Second, on May 16, 2025, a local state court in Pennsylvania came to the opposite conclusion and dismissed all of the climate tort claims brought against major fossil fuel companies by a local government (Bucks County), on the grounds of preemption — i.e., that federal law governed the claims at issue. Specifically, the court stated that because “the Clean Air Act and the EPA actions it authorizes preempt[] Pennsylvania State law in this case,” these laws “displace[] any Pennsylvania common law right to seek abatement of greenhouse gas emissions from fossil fuel production companies.” This is the same legal doctrine that federal courts in New York and California, and state courts in Delaware, New Jersey, and Maryland, have relied upon to likewise dismiss similar climate tort claims. This deepening divide over the scope of preemption may encourage the intervention of the US Supreme Court into this issue, impacting the dozens of climate change tort litigation cases currently pending throughout the US.

Finally, it should also be noted that the Trump administration filed preemptive lawsuits against the States of Hawaii and Michigan to block those states from pursuing lawsuits against the major fossil fuel companies concerning alleged damages from the companies’ contribution to climate change.

This intervention by the Trump administration — an exercise of the power of the federal government in support of favored constituencies, including fossil fuel companies — is also the key animating feature of another notable update. Specifically, the Trump administration (in this case, the FTC and Antitrust Division of the DOJ) filed a statement of interest in support of a lawsuit filed last November by eleven Republican state attorneys general against three major asset managers for alleged ESG antitrust violations. This lawsuit is founded upon a novel application of antitrust law; in essence, the state attorneys general have alleged that, under the guise of responding to environmental concerns, the three asset managers engaged in a scheme to reduce coal output (enabled by their market power — i.e., extensive holdings of stock in coal companies), and so increased the price of electricity (and profits for the coal companies). The alleged scheme is especially unusual as it relies upon collusive efforts by minority shareholders to reduce output across an entire industry in the pursuit of additional profits, rather than an explicit agreement among competitors to reduce competition or increase prices. Although the fact that the FTC and the DOJ Antitrust Division have decided to weigh in on a prominent lawsuit is not especially surprising (it is a common tactic), it is worth noting that the positions adopted in the legal filing by the federal government are directly tied to the policy priorities of the Trump administration — i.e., increasing domestic coal production. This case thus provides a noteworthy and concrete example of how the Trump administration’s policy priorities are guiding legal strategy.

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