For the last decade, the legal effort to hold the fossil fuel industry accountable for its climate denialism has been advanced through tort and consumer protection law. Plaintiffs asserted claims of public nuisance and consumer fraud, alleging that “Big Oil” has knowingly peddled a world-ending product while spreading lies about global warming to the public. These “climate liability” cases have promise, but they’ve been mired in protracted litigation and jurisdictional disputes. Meanwhile, a landmark lawsuit – filed in January 2026 by Michigan Attorney General Dana Nessel – presents a new theory: that fossil fuel companies manipulated the energy markets in violation of competition laws.

This suit pivots away from the climate-focused narrative of predecessor cases, instead invoking the Sherman Act and the Michigan Antitrust Reform Act (MARA) to allege that the fossil fuel industry operated not only as a polluter, but as a coercive cartel. The case represents a significant evolution in legal strategy and economic philosophy, moving the courtroom battle from a focus on environmental and infrastructure damage to the mechanics of the marketplace.

Defining Energy Markets to Incorporate Renewables

The complexity of attribution science makes climate-liability suits challenging. To establish precise damages, plaintiff municipalities must translate the global dynamics of climate change into local harm. Significant progress has been made in this field: Climate scientists can now model with some accuracy how increased emissions lead to specific costs for cities and towns in the form of hurricane damage, extreme heat impacts, and other climate-related damages. However, as these lawsuits move forward, parties will hotly contest how attribution and impact models translate broad global trends into the precise, local evidence that legal proceedings demand.

Michigan’s complaint aims for a different type of precision. It offers specific definitions of the two relevant markets it claims have been the target of fossil fuel companies’ conspiracy: transportation and primary energy. This is necessity for any antitrust action – market definition often shapes the outcomes of antitrust cases. A wide market definition tends to dilute evidence of dominance and harm by spreading conduct across a larger competitive landscape, whereas a narrower definition can reveal more concentrated market power and thus a clearer pattern of consumer harm.

Unlike broader climate cases that focus on injury to the environment, Michigan identifies two specific, market-based economic arenas:

• The Transportation Energy Market: This market is described in the complaint as encompassing competitive products of gasoline or diesel and electricity to fuel vehicles. The complaint alleges that the defendant fossil fuel companies conspired to ensure internal-combustion engines remained the only viable option for drivers in Michigan.
• The Primary Energy Market: This market is described in the complaint as including competitive products of fossil-fuel-based heat (largely propane and natural gas) and renewable electricity to serve residential and public buildings.

By narrowing the scope to these functional markets, Michigan focuses the antitrust injury on the “energy affordability crisis” facing its citizens, rather than pollution, extreme weather, or other climate harms associated with climate change. Note that, while ambitious litigation like this is often brought by coalitions of states, this case is limited to the geographic area of Michigan. The state argues that, due to the specific features of Michigan’s car-dependent communities, and because Michigan ranks among the highest in the nation for residential propane consumption, the suppression of electric vehicles, heat-pump technology. and renewable alternatives constitutes a direct, measurable financial cost to Michigan consumers.

This may be an uphill battle. Energy affordability, including gas prices, results from a complex set of macroeconomic factors, including geopolitical shocks, that can be difficult to untangle from the dominant power of incumbent firms. And the case presents a novel attempt to define energy markets broadly, while claiming a single antitrust product market encompassing both gasoline and electricity at the retail consumer level for transportation, and both fossil fuels and renewables for home heating. These market definitions will no doubt be contested by defendants, who will likely argue against defining gasoline and electricity as substitutes in a single “transportation energy” market. Recent decades have seen the rise of Tesla in the U.S. and the global electric vehicle market generally, but it may be hard to argue electric vehicles were a commercially viable, substitute product in the 1980s. This is a perpetual challenge with sweeping antitrust violations: It is difficult to pinpoint in retrospect when an emerging technology became viable, and the conspiracy claim centers on defendants’ efforts to undermine that viability.

However, in the late 1990s, the DOJ and FTC did consider natural gas and electricity as substitutes when considering the merger implications of deregulation of electricity markets, so there is some administrative precedent for this broad market definition. Further, a more recent Supreme Court case weighs in Michigan’s favor. In Diamond Alternative Energy v. Environmental Protection Agency, 606 U.S. __ (2025), the court held that fuel producers have standing to sue the EPA for approving California regulations that would require automakers to manufacture more electric vehicles and fewer gasoline-powered vehicles. While the case did not involve antitrust claims, the Supreme Court implicitly accepted as economic common sense that EVs and gas vehicles compete for the same consumer demand. Michigan will almost certainly cite this case to support its logic of substitutability.

Importantly, should Michigan succeed in defining the relevant product markets in terms of their broader function for consumers, the case will reverberate across other antitrust and tort cases involving climate change. Such broad definitions could help private-sector climate alliances by bolstering their arguments that the promotion of green-product alternatives is a valid pro-competitive response to meeting consumers’ needs while responding to shifting economic conditions.

Establishing a Fossil Fuel Conspiracy

In any Section 1 Sherman Act case, the plaintiff must prove an “agreement” existed among the conspiring parties. Unlawful agreements are rarely documented, making them difficult to establish. Instead, courts rely on parallel conduct by the individual defendants, combined with “plus factors,” or circumstances that make the parallel behavior look more like a conspiracy than a coincidence.

In the Michigan complaint, several factors are offered to bridge the gap from rational parallel conduct to conspiracy. Defendants are alleged to have used the American Petroleum Institute’s “CO2 and Climate Task Force” (established in 1979) and other industry associations as hubs to reach a “consensus to restrain innovation.” Michigan also cites defendants’ efforts to infiltrate the media, distort or falsify public messaging, and generate false academic analysis. Much will depend on whether defendants can effectively invoke the Noerr-Pennington doctrine to shield their activities as lawful lobbying activity aimed at legislative action – for example, by claiming that their lobbying against EV mandates was protected speech. Michigan may counter with the “sham exception” to argue that industry lobbying was not a genuine effort to influence policy or seek regulatory clarity, but rather a tactical delay mechanism to ensure that by the time renewables were viable, fossil fuel infrastructure was already locked in.

Defendants are also alleged to have engaged in patent suppression, where they strategically acquired and then failed to deploy nickel-metal hydride battery technology and solar panel technology. Further, Defendants are alleged to have sabotaged EV infrastructure, refusing to allow EV charging stations at their retail locations, creating an artificial barrier to entry for clean transportation. Arguably, these were economically irrational behaviors for any individual company anticipating the energy transition and seeking to diversify, and indicate the firms were operating as a cartel seeking to protect suboptimal, legacy goods.

Ironically, certain of the “plus factor” allegations mirror the allegations in Texas v. BlackRock, a case filed in 2024 by fossil fuel states arguing that large asset managers conspired against the coal industry. In that case, the state of Texas alleged that asset managers used their influence to pressure coal companies to reduce output. In denying the asset manager defendants’ motion to dismiss, a Texas court found that joining specific climate alliances (like Climate Action 100+) could serve as a “plus factor,” because it provided the opportunity for defendants to coordinate, and a common motive that diverged from traditional profit maximization. Note that the current FTC and DOJ filed a joint statement of interest in the BlackRock case, supporting the argument that such industry-wide initiatives may violate the Sherman Act. If Climate Action 100+ can serve as a plus factor for illegal collusion, the same logic can be applied to decades of coordinated messaging, strategy, and capital allocation decisions through the American Petroleum Institute. While Texas argues that investors conspired to eliminate coal through “green” coordination, Michigan argues oil companies conspired to eliminate green energy through “brown” coordination.

The Strategic Value of History

The fossil fuel companies’ coordination is alleged to have extended for decades. A striking feature of the Michigan complaint is its exhaustive recitation of the fossil fuel industry’s wrongdoing since the 1950s. The narrative value of this history is immense: The complaint effectively catalogues efforts to delay the energy transition that fossil fuels companies knew from their scientists was necessary to avert the worst effects of global warming. The legal value is more technical: first, it frames the suppression of electric vehicles within an intentional pattern of monopoly maintenance, making it harder for defendants to argue that these were isolated business decisions. Second, by alleging the “fraudulent concealment” of the true viability of renewables over decades, Michigan seeks to toll the statute of limitations that could otherwise bar claims for long-ago conduct. The statute of limitations only starts to run once the alleged conspiracy was discoverable – here, through the recent revelation of defendants’ internal documents.

This historical narrative transforms the case from a dispute over current prices (or the environment) into a saga of market sabotage that spans generations. It also offers a clear paper trail that stands in contrast to evidentiary hurdles in the climate liability suits, where advocates must translate complex climate modeling for the jury.

Legal Strategies Targeting Harmful Industries

The fossil fuel industry is not the first “sin” industry to be accused of sweeping social and economic harms. States have long sought to hold businesses accountable for their products’ harm, using a range of legal tools that might broadly be framed as social policy tort cases.

In the 1990s, state attorneys general, led by Mississippi and Arizona, led a legal fight against four large tobacco companies, colloquially known as “Big Tobacco,” resulting in a $206 billion recovery in a 1998 Master Settlement Agreement that set the standard for holding an entire industry accountable for harm.

In a more recent wave of litigation related to public health, states sought to hold drug manufacturers and distributors accountable for the opioids crisis. In those cases, plaintiffs advanced nuisance claims, arguing that the over-saturation of opioids in a community was an “interference with a public right” to health and safety. In a landmark 2025 ruling in City of Huntington v. AmerisourceBergen, the Fourth Circuit found that distributors could be liable for “oversupply” even if the product itself was legal and prescribed. Global settlements exceed $50 billion, and while elements of litigation continue, the cases successfully reframed a product as a nuisance.

The Michigan case’s closest antecedents are the antitrust suits advanced against social media companies. A recent surge of litigation against Meta (Facebook/Instagram), TikTok, and Google focus on alleged competition violations of exclusionary acquisitions. The litigations have two distinct legal theories. One, citing consumer protection laws that guard against defective products, involves claims that social media platforms have negligent design features like “infinite scrolling.” Hundreds of school districts and states have sued, arguing that these features are in fact defects that have caused a youth mental health crisis. The other legal theories invoke monopoly behavior. These antitrust claims, pursued by the Federal Trade Commission in a case against Meta, posit that Meta bought Instagram and WhatsApp specifically to “neutralize” them in an anticompetitive “buy-or-bury” strategy, also known as a killer acquisition.

In 2024, Alphabet was found to have created an illegal monopoly through the billions of dollars it paid to Apple and Samsung to pre-install Google on phones as the default search engine. In this type of case, the dominant firm uses its existing position to deny new entrants the customers, inputs, or distribution channels they would need to survive. The legal argument parallels Michigan’s “capture-and-kill” patent theory, where Michigan argues that fossil fuel companies treated the entire renewable sector as a “rival” to be acquired and neutralized.

Will Michigan Create a New Climate Liability Pathway?

While the tobacco suits were about lying, and the opioids cases were about oversupply, these new claims against technology companies and fossil fuel companies focus on market manipulation. Michigan is following the social media playbook: Where dominant players are alleged not just to sell a harmful product, but to buy up consumers’ ability to exit from that product. Outcomes in the FTC v. Meta case will no doubt shape the Michigan litigation. But the FTC case against Meta has obstacles in the rapidly evolving digital marketplace that Michigan does not face. Michigan’s case deals with “hard” infrastructure (think: pipelines, gas stations, furnaces) where market shifts are slower and lock-in is more absolute. Michigan argues that this entire structure of energy markets was designed by monopolistic conspirators working to prevent the arrival of cleaner, more efficient competitor products.

Is it realistic to believe the state may prevail? In an antitrust suit, a plaintiff must show that, absent the conspiracy, the market would look radically different – the so-called “but-for” world of causation. Defendants will no doubt mock Michigan’s vision of an electric vehicle-dominated state, arguing that consumers didn’t buy EVs in the 1990s because of battery range and cost, not because Exxon shelved a patent. And they will point to Michigan’s own market reality: As of 2026, fewer than 2% of registered vehicles in the state are EVs, despite years of government subsidies.

However, Michigan’s “but-for” world is not based on consumer whimsy, but on economic path dependency. The state may effectively argue that if the fossil fuel industry had not collectively refused to install charging infrastructure, or suppressed early battery technologies, then economies of scale would have arisen decades earlier that would have lowered prices and shifted the market incentives to resolve other consumer obstacles like the range anxiety that currently suppresses demand. This is a reversal of typical antitrust collusion cases, where coordinated action is taken to forestall a competitor. Here, as in the EU Car Emissions/AdBlue case, Michigan argues that coordinated inactionamounts to an illegal conspiracy.

The causal chain is long: A conspiracy of suppressed innovation means renewables didn’t scale, and gasoline was the only remaining option. As a result, Michigan consumers paid more than they would have in a more competitive market. The “but-for” arguments will require extensive technical economic modeling to advance the case.

But however the case is resolved, the Michigan lawsuit offers a significant reframing of the climate crisis, asserting that the current economic and environmental harms of global warming are not just a failure of regulation, but also a failure of competition and stifled innovation.

Cynthia Hanawalt is the director of climate and business law at Columbia University’s Sabin Center for Climate Change Law. Denise Hearn is director of strategic initiatives at The Long Now Foundation and a fellow at The Berggruen Institute.