The U.S. Supreme Court is hearing arguments on whether Boulder County, Colorado can pursue a state-court lawsuit seeking climate-damage compensation from ExxonMobil and Suncor Energy. The companies argue a Boulder win would open the door to many similar suits and function as a court-ordered "carbon tax" on the industry.
The U.S. Supreme Court hears arguments today on whether a lawsuit filed in Colorado state court can proceed against ExxonMobil and Suncor Energy over climate-related damage the county says it suffered.
Two sides, two arguments
Suncor, based in Canada, and ExxonMobil, based in Texas, argue that climate-change policy and any resulting damages are matters for federal government and courts only, so the state suit should not move forward. Boulder County counters that it is seeking compensation for damage done to the county and its residents by decades of emissions from the two companies, not a change in federal policy.
The energy companies contend that a Boulder victory would let many similar suits proceed and could bankrupt the oil industry by effectively creating a judicially ordered "carbon tax" through damages.
What a loss could mean for shareholders
The oilprice.com columnist covering the case argues that bankruptcy is a weak defense: large companies with valuable assets often reorganize under court supervision rather than liquidate, continuing to operate while paying their debts. In his view, a company hit with large damages would most likely restructure so that much of its future profits go to the parties that sued successfully, probably leaving shareholders with little remaining value or wiped out entirely, and leaving bondholders facing what he calls a serious drubbing.
One precedent he cites for handing over ownership to satisfy a judgment is the case of podcaster Alex Jones, whose InfoWars operation was ordered sold to satisfy a $1.3 billion jury verdict against him, an order that remains under litigation.
Source: Oilprice.com
Trading involves risk.
Risk Disclaimer
