The federal district court for the Western District of Michigan ruled that Michigan lacked standing for federal antitrust claims against four fossil fuel companies and American Petroleum Institute (API). The court described Michigan’s case as claiming that the fossil fuel companies in the 1970s “agreed, through API, to suppress renewable energies to maintain supracompetitive prices in the transportation and primary energy markets,” allegedly resulting in many harms to Michigan and its residents, including “overpriced energy, a lack of options in the energy market, increased insurance premiums for households and depressing home values, and increased costs to implement measures mitigating the negative externalities of fossil fuel use.” The court concluded that Michigan plausibly alleged only one “antitrust injury” under the Clayton Act: overcharges for energy in the transportation and primary energy markets. The court found that Michigan could not allege that renewable energy output reduction was an antitrust injury because this output reduction was not in the transportation and primary energy markets Michigan defined in its complaint. The court also found that reduction in product variety and innovation would not independently qualify as an antitrust injury. In addition, the court said Michigan conceded that other alleged harms would not independently qualify as antitrust injuries though Michigan contended that consequential damages could be recovered for those other harms. The court rejected the defendants’ contention that Michigan made only conclusory allegations regarding overcharges. Although the court concluded that the alleged energy overcharges would qualify as an antitrust injury, the court found that Michigan failed to plausibly allege the proximate causation element of antitrust standing. First, the court concluded that Supreme Court precedent barred recovery for damages as an indirect purchaser from the fossil fuel companies since the alleged conspiracy involved trade in the wholesale markets, not in the retail markets in which Michigan and its residents made purchases. Second, the court found that Michigan could not recover damages for any direct purchases from the companies or from retailers owned by the fossil fuel company defendants because proximate cause factors such as “the indirectness of the injury, the uncertain causal chain, and the existence of other potential plaintiffs” outweighed factors in favor of proximate cause. The court also found that “the tenuous causal connection … similarly cuts against proximate cause for an injunction.” The court dismissed the federal antitrust claim with prejudice and declined to exercise supplemental jurisdiction over Michigan state law claim under the Michigan Antitrust Reform Act.

Antitrust action brought by Michigan Attorney General against energy industry defendants alleging that they engaged in a “conspiracy to delay the transition from fossil fuels to renewable energy.”

People of the State of Michigan v. BP p.l.c.

<p>This entry was provided by the Sabin Center for Climate Change Law. Please see the terms of use for citation and licensing of third party data.</p>

Federal Court Said Michigan Lacked Standing for Federal Antitrust Claims Alleging Fossil Fuel Defendants Conspired to Suppress Renewable Energy

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

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A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Replacing technologies that burn fossil fuels directly with alternatives powered by electricity.

Actions to reduce emissions in energy generation and supply.

Technologies that capture and hold energy in reserve for later use.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Heat extracted from the ground, usually in the form of hot water or steam and typically referred to as hydrothermal fluid.

Electrical energy generated from mechanical devices driven by flowing fresh water.

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Production of electricity and heat from solar irradiation.

Kinetic energy of airflow transformed into useful energy, mostly electrical energy.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

The activities of industries that transforms raw materials into finished goods through industrial processes.

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Federal Court Said Michigan Lacked Standing for Federal Antitrust Claims Alleging Fossil Fuel Defendants Conspired to Suppress Renewable Energy

Target

Policy instrument

Risk

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance