US Supreme Court hears bid by oil companies to avoid climate lawsuit

By John Kruzel and Andrew Chung

WASHINGTON, Oct 5 (Reuters) - The US Supreme Court opened its new nine-month term on Monday by hearing a bid by oil companies ExxonMobil XOM.N and Suncor Energy SU.TO to thwart a lawsuit by officials in Boulder, Colorado, seeking monetary damages for harms caused by climate change.

US-based Exxon and Canada-based Suncor appealed after the Colorado Supreme Court let Boulder's lawsuit accusing them of state law violations proceed. President Donald Trump's administration has backed Exxon and Suncor, arguing that the federal government's authority to regulate air pollution precludes Boulder's claims.

"This case involves an unprecedented effort to use state law to regulate global conduct," Kannon Shanmugam, a lawyer for the oil companies, told the justices.

Boulder is suing the oil companies under Colorado law, Shanmugam added, "on the theory that their global conduct increased the global use of fossil fuels, which led to an increase in global greenhouse gas emissions, which contributed to global climate change, which resulted in global harms."

"Our constitutional system does not permit state law to be used in that manner. The Constitution bars the application of state law to certain inherently federal areas," Shanmugam said.

"Because of the ambient nature of air and water and the conflicting rights of states, this court has held for over a century that federal law governs interstate pollution claims. That principle applies with even greater force to claims involving global climate change," Shanmugam said.

Arguments were ongoing in the case.

The top US judicial body opened its new term on the first Monday in October, as is its custom. It also has major cases involving Trump's hardline immigration policies and state-level bans on assault-style rifles, among others, lined up for the term.

Boulder's city and county governments have accused Exxon and Suncor of helping drive climate change and misleading the public about the risks of fossil fuels. Boulder aims to hold the companies liable for past and future costs associated with climate change such as infrastructure repairs, environmental damage, emergency management and harms to public health.

The burning of fossil fuels releases greenhouse gases including carbon dioxide into the atmosphere, trapping heat and raising average global temperatures over time.

Nearly 60 state and local governments have brought similar suits seeking billions of dollars from fossil fuel companies, with more continuing to be filed, Exxon and Suncor told the justices. A ruling by the Supreme Court siding with the companies could lead to many of those cases being dismissed.

Monday's arguments marked the latest example of energy-sector companies asking the justices to block climate-related liability or limit federal environmental regulation.

Backers of the oil companies argue that if Boulder's most far-reaching claims are allowed to proceed, it could give states sweeping power over conduct occurring far outside their borders.

Energy companies and trade groups, along with states allied with them, have built a largely winning record before the justices over the past two decades in cases involving climate liability and the reach of federal environmental regulation.

Exxon and Suncor argue, among other things, that Boulder's claims intrude on an area controlled by the federal government as well as the Clean Air Act.

The court has a 6-3 conservative majority. Conservative Justice Samuel Alito has recused himself from participating in the case. Alito owns stock in several oil and gas companies but not Exxon or Suncor, according to his financial disclosure forms.

The Supreme Court's decision is expected by the end of June.

Before hearing the arguments, the court turned away appeals in some cases.

It declined to hear a bid by real estate platform Zillow Group ZG.O to escape a class action that accused it of misleading investors about its failed home-flipping venture. It also declined to hear a bid by Nexstar Media Group NXST.O, which owns numerous local television stations, to block an antitrust suit by DirecTV challenging allegedly inflated content-distribution fees.