Michigan is taking on major oil and gas companies in court, joining nearly a dozen other states that have brought climate-related lawsuits against ExxonMobil and its industry peers. But Michigan’s approach is different: accusing Big Oil not of deceiving consumers or misrepresenting climate change risks, but of driving up energy costs by colluding to suppress competition from cleaner and cheaper technologies like solar power and electric vehicles.
The strategy is risky and might run into challenges, but it could potentially be a game changer if the state can overcome initial dismissal attempts by the industry defendants, legal experts say.
Michigan Attorney General Dana Nessel filed the lawsuit last month in federal District Court against BP, Chevron, ExxonMobil, Shell and the American Petroleum Institute. The suit, brought under federal and state antitrust laws, alleges a conspiracy to delay the transition to renewable energy and EVs and maintain market dominance of fossil fuels.
Exxon said in a statement that the state’s action is “yet another legally incoherent effort to regulate by lawsuit. It won’t reduce emissions, it won’t help consumers, and it won’t stand up to the law.”
Chevron did not respond to a request for comment, and BP and Shell declined to comment.
API senior vice president and general counsel Ryan Meyers said that Michigan’s case is “baseless” and “part of a coordinated campaign against an industry that powers everyday life, drives America’s economy, and is actively reducing emissions.”
“We continue to believe that energy policy belongs in Congress, not a patchwork of courtrooms,” Meyers added.
This week during a congressional hearing with Attorney General Pam Bondi testifying, U.S. Rep. Harriet Hageman (R-Wyo.) referenced Michigan’s lawsuit in arguing that these “novel approaches” to “climate lawfare” require a federal response. Hageman said she is working with House and Senate colleagues to craft legislation aimed at shielding fossil fuel companies from state climate liability laws and lawsuits.
API has been lobbying Congress on exactly this kind of liability shield. The organization has recently lobbied on “draft legislation related to state efforts to impose liability on the oil and gas industry,” according to its lobbying reports. And API is now stating publicly that stopping “extreme climate liability policy” such as lawsuits and state climate superfund laws is one of its top priorities for 2026.
In its lawsuit, Michigan argues that the oil companies and their chief trade association operated as a cartel, working to hinder the development of alternatives in the primary energy and transportation markets in order to keep consumers dependent upon oil and gas. This anticompetitive conduct, the state says, has resulted in fewer choices for consumers when it comes to fueling their cars or heating their homes, and has left consumers paying more for energy than they otherwise would have.
The lawsuit comes at a time of mounting concerns over affordability and the cost of living, including rising energy costs. Nessel said these “out-of-control costs” are largely “due to the greed of these corporations who prioritized their own profit and marketplace dominance over competition and consumer savings.”
According to the state’s complaint, clean energy technologies would have reached scale much sooner, and consumers would have avoided billions of dollars in overcharges, were it not for the defendants’ deliberate actions to forestall their development and deployment.
“Defendants have dramatically delayed the availability of EVs, made 100 percent clean charging stations a rarity, suppressed the advancement of solar technology and its uptake by consumers, and prolonged fossil fuels’ dominance in mixed-source electricity generation,” the complaint argues.
The lawsuit details allegations of coordinated anticompetitive conduct, such as abandoning research and investments in alternative energy technologies and using patent litigation to stifle innovation. Exxon, which invented an early version of the lithium-ion battery, halted its EV battery research program in the early 1980s, while Chevron worked to block commercialization of a nickel-metal hydride battery technology.
Oil companies were also early developers of the solar energy market and controlled much of the sector in the 1980s. But then they abandoned these ventures and, according to the complaint, “used litigation to deter new market entrants.” As attorney Tracy Emblem wrote in a 2010 article, big oil companies “seized and took control of the research and patents” for PV solar in order to thwart its development.
Oil companies understood the threat posed to their business by a large-scale transition away from fossil fuels, the Michigan lawsuit says, and therefore they worked together to try to block alternatives from taking off and to ultimately delay the transition.
The complaint cites a 1979 internal study by Exxon finding that alternatives to fossil fuels would need to account for at least half of global energy supply by 2010 in order to avoid catastrophic climate impacts. That same year, API established a CO2 and Climate Task Force, and through this task force the defendants “reached a consensus to restrain innovation and coordinate efforts to delay the inevitable energy transition,” the complaint alleges.
Proving there was an actual conspiracy or an agreement among the companies, however, is likely to be one of the biggest challenges for the state, legal experts say.
“In establishing an antitrust claim, essentially a conspiracy, you need to prove an agreement,” Gary Mouw, partner at the Michigan-based law firm Varnum LLP, told Inside Climate News. “You need to allege sufficient facts, specific concrete facts where it can be concluded or interpreted that these parties actually entered into an agreement to coordinate.”
He said he expects the defendants will argue that the allegations lack specificity and that there was no established consensus to collude.
Pat Parenteau, emeritus professor of law at Vermont Law and Graduate School, agreed that proving the alleged conspiracy might be the biggest sticking point for the state plaintiffs.
“They’ve really got to nail down, what is the overt evidence of the conspiracy to constrain trade? What documents reveal these parties getting together and agreeing that we’re going to choke renewables?” Parenteau told Inside Climate News.
“The theories are solid,” he added. “Surviving a motion to dismiss is the ball game, I think. If [the state] can get past a motion to dismiss, get into discovery, get to trial, then they’ve got a shot.”
Michigan is not the first to allege that fossil fuel companies engaged in conspiratorial conduct. California, for example, which sued a handful of major oil and gas firms in 2023, argued that the companies conspired to misrepresent the known dangers of fossil fuels and to disseminate climate disinformation while promoting continued use of fossil fuel products.
Several other lawsuits filed against the industry include racketeering and related conspiracy claims. One of these cases, filed in 2022 by Puerto Rican municipalities, also brought a federal antitrust claim against fossil fuel companies. While a magistrate judge had recommended that the case should proceed under racketeering and antitrust claims, a federal district court judge decided to dismiss the case in September based on a procedural statute of limitations issue. The Puerto Rican municipalities are appealing that decision.
Mouw said he expects that defendants in the Michigan lawsuit will likely raise a similar statute of limitations defense, essentially arguing that the claims were not brought in a timely manner.
But while Puerto Rico’s lawsuit sought to hold fossil fuel companies liable for damages stemming from the 2017 hurricanes that decimated the island, Michigan’s case is less focused around a specific event, Aaron Regunberg, a lawyer and director of Public Citizen’s climate accountability project, explained. “It is an ongoing conspiracy with ongoing harms,” he told Inside Climate News. “I think it’s better insulated from a statute of limitations argument.”
Regunberg said he thinks the approach of bringing antitrust claims against Big Oil for delaying the energy transition is compelling and appropriate.
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Donate Now“It really gets at the fundamental thing that Big Oil was trying to do,” he said. “Ultimately it was about shutting out competitors, keeping their energy cartel dominant over the market, in order to keep us locked into their products and keep alternative clean energy from reaching scale.”
Zephyr Teachout, a law professor at Fordham Law School with expertise in antitrust law, told Inside Climate News that Michigan’s case looks very promising.
“For generations fossil fuel companies have engaged in cartel-like behaviors to suppress innovation and lock down the flow of cash,” she said. “They hide in trade associations but there’s no free speech protection for cartels, and I’m glad to see the case.”
The Push to Wipe Out Climate Liability
Michigan’s lawsuit comes amidst escalating attempts by the fossil fuel industry and its political allies to shut down climate liability initiatives.
“As more than a dozen states and communities move closer to putting Big Oil on trial, and as climate superfund laws begin to take hold, the industry is turning to Congress for protection. API has said plainly that stopping climate liability is a top priority and now we are seeing legislation take shape to do exactly that,” Cassidy DiPaola, communications director for the Make Polluters Pay campaign, said in response to Hageman’s announcement that she is working with congressional colleagues to craft a federal liability shield for energy companies.
“If these companies believe they did nothing wrong, they should be willing to defend that position in court,” DiPaola added. “Instead, they are asking lawmakers to block the cases altogether.”
State lawmakers in Utah and Oklahoma recently introduced bills that aim to shield the fossil fuel industry from climate lawsuits and prohibit liability over climate damages. Both bills are currently advancing in the state legislatures.
In April 2025, President Donald Trump issued an executive order directing the attorney general to identify and “expeditiously take all appropriate action to stop” state laws and lawsuits that burden domestic fossil fuel production or otherwise target the fossil fuel industry.
Just weeks later, the U.S. Department of Justice sued New York and Vermont over their climate superfund laws. The DOJ also preemptively sued Hawaii and Michigan in anticipation of those states bringing climate lawsuits against oil companies, even though neither state had filed any case at the time. Hawaii did file a complaint against oil companies the next day.
Michigan, however, did not file its suit until just recently, and it ended up departing from the expected focus on climate damages. The DOJ argued in its complaint that Michigan’s forthcoming suit would be unconstitutional and preempted by the Clean Air Act. U.S. District Judge Jane M. Beckering, who is now presiding over Michigan’s antitrust lawsuit, tossed out the DOJ’s case the day after the state filed its suit against Big Oil.
Beckering said the DOJ’s case was too speculative and premature, and that there appeared to be no precedent for preemptively blocking a party from bringing “a broad swath of unspecified claims against unspecified members of a given industry simply because that party has begun investigating whether a litigation strategy may have merit.”
“I am relieved the Court saw through this and dismissed this frivolous case,” Nessel, the Michigan attorney general, said in response. “My office will not be bullied.”
Nessel put out a request for outside counsel in 2024 to assist with pursuing climate litigation against fossil fuel companies, and the state subsequently entered into contingency contracts with the law firms Sher Edling, DiCello Levitt and Hausfeld. What had started as an investigative strategy of holding fossil fuel companies liable for climate impacts in the state, however, instead “uncovered one of the most successful antitrust conspiracies in United States history,” according to Nessel’s office.
Antitrust experts say the state’s case takes a novel approach, and one that tests the bounds of traditional antitrust law.
“I think there are some challenges here, especially when the court looks at what else would this apply to if we were to adopt this theory: Would this really expand liability for antitrust beyond what it was really meant for?” Mouw said.
“The Michigan case is a novel application of a classic principle of the antitrust laws—that agreements between competitors to restrict output are illegal,” Nicole Veno, an antitrust lawyer and senior associate at Lowey Dannenberg, told Inside Climate News. “While the theory of liability appears strong, to prove damages Michigan will also need to show that it was economically harmed by the failure to invest in alternative energy sources, which could prove more challenging.”
If the case does move ahead, climate advocates say they are hopeful that it will open up new pathways for pursuing accountability.
“I’m excited to see how this case goes,” Public Citizen’s Regunberg said, “and would hope it would be a model for a lot of other plaintiffs who are hopefully going to be bringing more suits like it.”
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