Sustainable Energy & Infrastructure Litigation Updates — March 2026

Litigation Updates

On February 3, 2026, the federal District Court of the Western District of Texas held that the anti-ESG law passed by the Texas state legislature, which prohibited “state entities from investing in or contracting with companies that ‘boycott’ fossil fuels,” was unconstitutional. Specifically, the court held that the law “violates the First Amendment because it is facially overbroad ... [since it] permits the State to penalize companies for all manner of protected expression concerning fossil fuels,” and that it was “unconstitutionally vague in violation of the Due Process Clause” of “the Fourteenth Amendment because it fails to provide persons of ordinary intelligence a reasonable opportunity to know what conduct is prohibited,” as demonstrated by “[t]he Comptroller’s discriminatory and arbitrary implementation of [the law].” In other words, Texas’s efforts to restrict the entities with which Texas governmental authorities do business — based upon a perceived adherence to ESG principles — has now been rejected by the courts. This decision calls into question the constitutional validity of the numerous anti-ESG laws enacted by other states seeking to impose similar boycotts.

On February 10, 2026, the federal District Court for the Northern District of Texas issued an award of approximately $4.6 million in attorneys’ fees to the plaintiff’s lawyers who brought the Spence v. American Airlines case, which had successfully challenged the ESG-influenced investing by the defendant company’s pension fund, even though the court earlier held, following a bench trial, that the plaintiff had failed to demonstrate any damages. This decision may encourage similar litigation in the future, as plaintiffs’ firms now have an incentive to pursue such cases, even if an award of significant damages on the underlying claims faces severe legal hurdles.

On February 23, 2026, the US Supreme Court granted certiorari in Suncor Energy, Inc., et al. v. County Commissioners of Boulder County, the case in which the city and county of Boulder, Colorado are pursuing climate tort claims against major fossil fuel companies. The case, originally brought in Colorado state court, sought to impose liability on the companies for damages associated with the impact of climate change. The Colorado Supreme Court subsequently rejected the defendants’ contention that such claims were barred by federal law. The US Supreme Court is now reviewing that question — but has also noted a concern that it may lack jurisdiction. The US Supreme Court will likely hear the case in the fall of 2026.

Regulatory Updates

On February 10, 2026, a coalition of 10 state attorneys general led by the Attorney General of Florida issued a letter of notice to nearly 80 corporations associated with three trade organizations engaged in efforts to “eliminate ... certain ‘problematic or unnecessary’ plastic packaging,” stating that “the policies, coordinated initiatives, and compliance frameworks these organizations promote and prescribe to their members may constitute unlawful restraints of trade in violation of the Sherman Antitrust Act.” This initiative reflects the continued use of antitrust law by regulators to combat collective action undertaken under the aegis of trade groups to promote ESG or sustainability efforts.

On February 10, 2026, the New York State Senate passed the Climate Corporate Data Accountability Act, which is now under consideration by the New York State Assembly. This bill is similar to the corporate climate disclosure bill enacted by California in 2023, as both mandate the reporting of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions by companies with an annual revenue exceeding $1 billion that do business in the state. If enacted, it would be the second state law mandating this type of corporate climate disclosure — and, given the significance of New York State’s economy, would likely compel many other companies to make this type of climate disclosure.

Subscribe To Viewpoints