News Summary

The Trump administration has filed a lawsuit against Michigan, challenging the state’s efforts to seek damages from fossil fuel companies linked to climate change. The legal dispute arose in the U.S. District Court, claiming the state’s actions interfere with federal policies. Michigan is employing law firms to support its lawsuit aimed at holding these companies accountable, while other states pursue similar claims. Concurrently, local governments in Michigan are contesting the new clean energy permit law, highlighting rising tensions over renewable energy initiatives.

Detroit, Michigan – The Trump administration has filed a lawsuit against the state of Michigan, its Governor Gretchen Whitmer, and Attorney General Dana Nessel in an effort to impede the state’s pursuit of damages from fossil fuel companies linked to climate change. This lawsuit was initiated in the U.S. District Court in Michigan and asserts that Michigan’s proposed action would interfere with federal greenhouse gas policies.

The legal challenge claims that the state’s anticipated lawsuit demonstrates what it terms an “extraordinary extraterritorial reach,” suggesting that Michigan is overstepping its jurisdiction in trying to hold fossil fuel companies accountable for their role in climate change. The administration’s lawsuit represents a significant move in an ongoing conflict regarding how states can address climate issues at a time when many local governments are seeking relief for environmental damages.

Michigan’s intentions to seek damages from fossil fuel companies come as the state has appointed three law firms—Sher Edling LLP, DiCello Levitt LLP, and Hausfeld LLP—to support its legal efforts. These firms are recognized for their extensive experience in environmental litigation and will act as special assistant attorneys general in this case. The contract between the firms and the state is effective from September 26, 2024, to September 30, 2027, with the possibility of a 30-day extension.

Under the proposed agreement, the law firms will receive a percentage of any financial recovery attributed to the lawsuit. For any settlement amount up to $150 million, the outside attorneys will get 10% before the discovery process and 16.67% afterwards. For amounts exceeding $150 million, the attorneys will earn 2.5% before discovery and 7.5% subsequently. This financial structure underscores the potential implications of the lawsuit, not only for fossil fuel companies but also for the state’s fiscal future.

The oil and gas industry plays a considerable role in Michigan’s economy, contributing significantly by providing approximately 229,000 jobs. In 2023 alone, Michigan received over $42 million in royalties from state-owned gas and mineral rights. Furthermore, this financial influx has supported over 2,500 projects financed through the Natural Resource Trust Fund since 1976. The fund is particularly focused on developing environmentally significant land and mandates that at least 25% of its grants prioritize land acquisition.

While Michigan pursues this lawsuit, other states, including California, Connecticut, and Delaware, have also filed similar claims against fossil fuel companies, highlighting a growing movement across the country aimed at holding these companies accountable for climate-induced damages.

Simultaneously, nearly 80 counties and townships in Michigan are taking legal action against the Michigan Public Service Commission (MPSC) regarding its implementation of a new law aimed at streamlining permits for clean energy projects. This law requires that permits for certain sizes of renewable energy projects be overseen by the MPSC, which critics argue removes local governments’ authority over energy facility regulations.

The legal claim against the MPSC asserts that its actions violate the Administrative Procedures Act and unlawfully redefine critical terms. Local officials maintain that the commission’s order constrains input from municipalities on energy project regulations, contradicting what they believe was the intent of the legislature. This parallel legal struggle highlights escalating tensions over renewable energy initiatives in Michigan.

As both lawsuits unfold, the outcomes may lead to significant consequences not only for the fossil fuel industry and Michigan’s governmental authority but also for the state’s approach to addressing climate change challenges moving forward.