Sustainable Energy & Infrastructure Litigation Updates — September 2025

Federal Litigation

On August 1, 2025, a federal district court judge rejected the attempt by three major asset managers to dismiss an antitrust complaint filed by a coalition of 11 Republican state attorneys general (and subsequently receiving the support of the Trump administration’s DOJ (Antitrust Division) and FTC). This complaint alleged a rather aggressive antitrust theory, namely that the asset managers’ adherence to climate-friendly principles — which discourage the use of coal — constituted antitrust violations when considered in tandem with their investments in coal companies, as the companies allegedly used their influence to reduce coal output, thus driving up the price of coal and increasing their profits. The federal district court determined that the complaint had sufficiently pled allegations of an antitrust violation — offering crucial legal endorsement to this aggressive antitrust theory — and so could proceed, including to the discovery phase (which will place substantial pressure on the asset managers). Although this case remains at an early stage of the proceedings, this was a significant win for the attorneys general and a major validation of their legal theory applying antitrust law to ESG-related activities.

Federal Regulation

On August 12, 2025, the Federal Trade Commission announced that it had “closed its investigation into whether several truck and engine manufacturers and their trade association violated the antitrust laws by entering the ‘Clean Truck Partnership’ with the California Air Resources Board.” The investigation was closed because the relevant truck manufacturers effectively agreed to withdraw from and not comply with California’s Clean Truck Partnership (an arrangement to shift to electric vehicles) and entered into written commitments “not to enter an agreement with any US state regulator or US state government that fixes output or emissions levels and permits cross-enforcement by competitors” — i.e., to refrain from any such similar arrangement in the future. This action by the FTC is not only part of a broader effort by the Trump administration to overturn environmental regulations and pursue a rollback of various ESG initiatives, but also reflects the tactical choice to employ antitrust law as a means to attack various agreements among industry participants to adopt collective solutions to address climate change.

State Regulation

On August 13, 2025, the challenge by the US Chamber of Commerce to the State of California’s mandatory climate disclosure regulations was rejected by a federal district court, which held that these regulations did not violate the First Amendment (as a form of compelled speech). Absent further judicial action, the climate disclosures promulgated by California, which mandate disclosures of climate risk for companies with over $500 million in revenue, and the disclosure of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions for companies with over $1 billion in revenue, shall enter force as of January 1, 2026. And, as these regulations apply to any company “doing business” in California — a low threshold — these disclosures could well be considered de facto national regulations in the United States due to the influential role played by California’s economy. This ruling is currently on appeal to the Ninth Circuit.

State Litigation

On August 6, 2025, a state court judge in South Carolina dismissed the climate change tort lawsuit filed by the City of Charleston against a number of major fossil fuel companies. (This lawsuit was one of approximately three dozen that have been filed over the past decade on behalf of state and local governments against fossil fuel companies, asserting damages due to climate change under various state tort laws.) In a ruling echoing the reasoning by other courts in dismissing these type of claims (e.g., Pennsylvania, Delaware, Maryland, New Jersey, and New York), the court held that “[f]ederal law precludes and preempts Plaintiff’s claims.” The court also held that certain defendants had to be dismissed for lack of personal jurisdiction “because Plaintiff’s claims are not related to and did not arise out of those Defendants’ alleged activities in South Carolina.” While a number of other climate change tort lawsuits are currently winding their way through the courts (e.g., Colorado and Hawaii), this decision reinforces the general lack of success of these types of claims, at least to date, and may decrease the likelihood of further such lawsuits being filed in the future.

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