A federal appeals court has ruled that a high-stakes climate change lawsuit brought by the city of Chicago against major oil and gas companies must proceed in Cook County’s local judicial system. On July 15, a three-judge panel of the U.S. Seventh Circuit Court of Appeals upheld a decision by U.S. District Judge Franklin U. Valderrama, rejecting the energy companies’ attempts to remove the case to federal court. The panel, comprised of Judges Rebecca Taibleson, Nancy Maldonaldo, and David Hamilton, determined that the city’s claims do not satisfy the “federal officer” removal requirements, keeping the case anchored in a venue long perceived by business advocates as notoriously plaintiff-friendly.

The energy companies—including industry giants like Chevron and BP—had argued that their historical production and refining activities, often performed under the direction of the federal government for national security purposes, should grant them federal jurisdiction. They maintained that a recent U.S. Supreme Court ruling, Chevron v. Plaquemines Parish, supported their position. However, the Seventh Circuit panel disagreed, asserting that the city’s claims regarding alleged “climate disinformation” are legally distinct from the companies’ federal contract work. Judge Taibleson wrote that the alleged misrepresentations were not directed at the federal government, rendering the link to federal duties “too attenuated” to justify moving the case out of state court.

The case, initiated in February 2024, sees the city of Chicago partnering with prominent trial law firms to allege that petroleum producers misled the public for decades regarding the climate-altering effects of fossil fuels. The lawsuit frames these actions as a “public nuisance,” asserting that the companies’ marketing and alleged disinformation campaigns contribute to environmental damage—such as flooding and severe storms—along with social and racial inequities for the city’s low-income populations. The city seeks financial damages to address these municipal burdens, adopting a legal strategy similar to past litigation against the tobacco and pharmaceutical industries.

For the defendant energy companies, the prospect of an unfavorable trial in Cook County is significant. Business reformers, including the American Tort Reform Association, frequently label Cook County a “judicial hellhole,” arguing that local defendants struggle to receive a fair trial due to a legal culture heavily dominated by Democratic interests. The political landscape of the county—where Republican candidates for judgeships are rare—is seen by critics as inherently disadvantageous to massive energy corporations, which have been frequent targets of Democratic-led initiatives to mandate shifts toward renewable energy and away from internal combustion engines.

The litigation is bolstered by support from external legal entities, most notably the San Francisco-based firm Sher Edling LLP. Widely recognized for spearheading climate-related nuisance suits across the country, Sher Edling has faced scrutiny from congressional members over its “dark money” funding sources, specifically the Collective Action Fund for Accountability, Resilience and Adaptation. Critics argue that these partnerships between local governments and trial lawyers are strategically designed to use the civil court system to achieve political goals, effectively bypassing federal regulatory frameworks that oversee energy production and emissions.

While the Seventh Circuit has solidified the venue for now, the ultimate fate of such climate litigation remains uncertain. Most courts have historically dismissed these types of suits as improper attempts to dictate energy policy through local courts. However, with the U.S. Supreme Court scheduled to hear a similar climate case from Boulder, Colorado, this October, the landscape could shift drastically. Despite this upcoming high-court review, Cook County Circuit Judge Allen Walker has thus far refused to pause the Chicago proceedings, suggesting that the city’s focus on “consumer protection” claims may allow the lawsuit to survive regardless of federal rulings on emissions-related injuries.