Federal court throws out Nessel antitrust suit against oil companies

A federal judge has dismissed a climate-related lawsuit Michigan Attorney General Dana Nessel filed against oil and gas companies.

The lawsuit, initially announced in 2024, was filed in the United States District Court for the Western District of Michigan and alleged that several oil and gas companies contributed to climate change. Nessel retained three out-of-state law firms to pursue major petroleum firms.

The lawsuit against BP PLC, Chevron Corp., Exxon Mobil Corp., Shell PLC, and the American Petroleum Institute alleged they violated the Sherman Antitrust Act, the Clayton Antitrust Act and the Michigan Antitrust Reform Act.

In January 2026, the climate lawsuit pivoted to an antitrust lawsuit that claimed the defendants acted as a cartel in an unlawful conspiracy to stall competition from renewable energy.

U.S. District Judge Jane M. Beckering, however, ruled that Michigan lacks antitrust standing to pursue an injunction or recover damages.

“The antitrust laws protect against none of the injuries for which Michigan seeks a remedy,” Beckering wrote.

The lawsuit relied on a “chain of causation” between energy markets and transportation that “contains several somewhat vaguely defined links,” according to the decision.

“But the alleged conspiracy’s success at entrenching supracompetitive fossil fuel prices depends on numerous market forces besides Defendants, such as technological developments, other investors, and the public’s interest in renewable energy, as well as the supply of fossil fuels.”

The attorney general’s suit alleged that a conspiracy among petroleum companies was the proximate cause of high prices and other injuries to Michigan customers. But the court rejected this argument, pointing to the indirectness of the claimed injury, the uncertain causal chain, and the existence of other potential plaintiffs. Beckering also noted the great distance between the alleged conspiracy and overcharges for Michigan residents.

“Michigan seeks an antitrust remedy for many harms that do not qualify as antitrust injuries,” Beckering wrote. “Michigan alleges that Defendants’ conspiracy decreased the (electric vehicle) supply, delayed infrastructure for other EVs and renewable energies, increased insurance premiums for households, depressed home values, and caused Michigan to expend resources to address negative externalities associated with fossil fuel use (Compl. ¶ 279). These harms are, at most, ‘collateral damage’ with respect to the markets in which Michigan alleges Defendants conspired: the transportation and primary energy markets. Therefore, Michigan cannot invoke the antitrust laws to remedy these harms, lest ‘the list of harmed parties ... go on and on.’”

Nessel’s office responded to the ruling in an email to Michigan Capitol Confidential.

“The Attorney General disagrees with the opinion and order issued earlier today on the energy affordability antitrust case the Department brought on behalf of the People of the State of Michigan,” Press Secretary Danny Wimmer wrote. “Our office is reviewing the opinion in full and considering our options.”

BP has about 600 Michigan gas stations and 120 Amoco stations. Chevron has no gas stations in Michigan, Exxon has about 600, and Shell has around 400.

The dismissal puts Michigan in the company of states whose high-profile climate lawsuits have failed in court. The district court’s ruling follows dismissals in Delaware, Maryland, New Jersey, New York, Pennsylvania and South Carolina, in addition to Puerto Rico.

Chevron Corp. welcomed the ruling.

“This decision adds to the growing list of federal and state courts that have dismissed climate lawsuits,” Theodore J. Boutrous Jr. of Gibson, Dunn and Crutcher LLP, counsel for the company, told CapCon in an email. “These climate suits are baseless no matter plaintiffs’ attempts to concoct new litigation theories, like these meritless antitrust claims.”

The U.S. Department of Justice, which filed a lawsuit last May against Michigan in an attempt to stop this lawsuit, also cheered the decision.

“Last May, we filed a complaint against Michigan to prevent it from suing energy companies for climate change under state law theories that are preempted by federal law,” said Principal Deputy Assistant Attorney General Adam Gustafson of the Energy and Natural Resources Division of the department. “After we filed our complaint, Michigan pivoted to the novel antitrust claims that the court dismissed yesterday. We are pleased that the district court has rejected another aggressively anti-energy lawsuit, and we are committed to protecting American energy from this sort of state overreach.”

“This dismissal should make states rethink the use of lawfare to enact climate change policy,” said Associate Attorney General Stanley E. Woodward Jr. “We are committed to upholding antitrust and environmental law. Michigan’s case would have accomplished neither. That is what we highlighted in our statement of interest.”