Climate Change Settlements: Vanguard, Supreme Court, and State Suits

The headline climate change settlement of 2026 is Vanguard’s $29.5 million deal with 11 Republican-led states to resolve antitrust claims tied to the asset manager’s climate-conscious investment practices. Beyond that, most of the year’s major climate cases have produced rulings rather than payouts, and the U.S. Supreme Court is now set to decide a case that could determine whether dozens of pending state climate lawsuits ever reach a settlement at all.

Vanguard’s $29.5 Million Antitrust Settlement

On February 26, 2026, The Vanguard Group agreed to pay $29.5 million to settle claims brought in the Eastern District of Texas by Texas, Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming. The states alleged that Vanguard, BlackRock, and State Street had used their shareholdings in domestic coal producers to pressure companies into reducing coal output, amounting to an illegal conspiracy against the coal industry.¹

The money was only part of it. Vanguard accepted five-year “passivity commitments” barring the firm from directing portfolio companies’ business strategies, operations, or carbon emission reduction activities. Vanguard also agreed not to nominate directors, submit shareholder proposals, or threaten to sell securities to push companies into specific actions. The firm will withdraw its U.S.-based businesses from the UN-backed Principles for Responsible Investment and will not participate in any organization advocating specific output or emissions targets.² Vanguard also agreed to offer proxy voting directly to investors in funds accounting for at least half the assets in U.S. equity funds it advises.³ The firm expressly denied any unlawful conduct.⁴

BlackRock and State Street did not settle and remain defendants. Texas Attorney General Ken Paxton accused both firms of continuing “anticompetitive schemes.” State Street called the lawsuit “baseless and without merit.” BlackRock declined to comment.²

The Supreme Court Case That Could Shut Down State Climate Suits

If you are watching for the next wave of climate settlements, the biggest variable is a case the U.S. Supreme Court agreed to hear on February 23, 2026. In Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County (No. 25-170), the Court will decide whether federal law bars state-law claims seeking relief for injuries allegedly caused by interstate and international greenhouse gas emissions. The justices also directed the parties to brief whether the Court has jurisdiction to hear the appeal at all.⁵

A ruling for the fossil fuel companies could effectively end more than two dozen active state-court climate liability lawsuits. A ruling the other way would clear the runway for years of state-level litigation, and with it, the possibility of settlements. Amicus support for the companies came from the United States government, the American Petroleum Institute, the U.S. Chamber of Commerce, the National Association of Manufacturers, House Majority Leader Steve Scalise and more than 100 members of Congress, and coalitions of more than 25 states.⁶

Petitioners filed their merits brief on May 14, 2026. The respondents’ brief is due July 27. Oral argument is expected in the first week of the Court’s October 2026 term, with a decision likely by mid-2027.⁷ Several other courts have already paused climate cases while they wait.

The Justice Department’s Push to Block State Climate Lawsuits

While Suncor is pending, the Trump administration’s Department of Justice is suing states to stop climate cases from moving forward in the first place. Under an executive order titled “Protecting American Energy from State Overreach,” the DOJ has filed federal lawsuits attacking state-level climate liability claims against energy companies.

On May 4, 2026, the DOJ sued Minnesota to halt the state’s 2020 case — brought by Attorney General Keith Ellison against Exxon Mobil, Koch Industries, and the American Petroleum Institute for alleged consumer fraud and deceptive trade practices tied to climate change. The DOJ argues Minnesota’s suit tries to regulate global greenhouse gas emissions, which it says is exclusively a federal matter.⁸ A hearing on the DOJ’s preliminary injunction motion and a pending motion to dismiss is scheduled for July 21, 2026. Twenty-three states have sought to file amicus briefs backing the DOJ.⁹

The DOJ’s legal theories span constitutional preemption, Clean Air Act preemption, foreign affairs preemption (citing U.S. withdrawal from both the Paris Agreement and the UN Framework Convention on Climate Change), and the Commerce Clause.⁹

So far the strategy has not worked. Federal judges dismissed similar DOJ suits against Hawaii and Michigan for lack of standing, and the DOJ did not appeal, instead reworking its standing theory in the Minnesota complaint.¹⁰¹¹¹²

Recent Dismissals: Carrboro v. Duke Energy

Not every setback has come from Washington. On February 12, 2026, a North Carolina state court dismissed the Town of Carrboro’s lawsuit against Duke Energy. The town had alleged a decades-long disinformation campaign by Duke delayed the renewable energy transition and caused millions in local infrastructure damage from extreme weather.¹³

Judge Mark Davis ruled the case nonjusticiable under the political question doctrine, finding that energy policy and emissions regulation are committed to the legislative and executive branches. He also concluded courts lack “judicially discoverable and manageable standards” to trace specific local damages to one company’s alleged disinformation. Climate change, he reasoned, is a global phenomenon driven by “billions of unrelated emitters.”¹⁴ The judge did reject Duke’s standing argument, affirming that a North Carolina municipality can sue over harm to its property. The broader policy questions, he held, were simply outside the court’s role.¹³

So-called “climate washing” consumer cases have also hit walls. Federal courts dismissed claims against Apple and R.J. Reynolds Vapor Co. (Vuse) in early 2026, though plaintiffs were given leave to refile.⁴

The American Airlines ESG Ruling

A separate ruling has reshaped how corporate retirement plans handle climate-linked investing. In Spence v. American Airlines, Inc. (No. 4:23-cv-00552, N.D. Tex.), Judge Reed O’Connor found that American Airlines and its Employee Benefits Committee breached their fiduciary duty of loyalty under ERISA by allowing corporate ESG objectives and BlackRock’s ESG-oriented investment practices to influence management of the company’s $26 billion retirement plan.¹⁵

The court said the company failed to maintain a “critical divide” between corporate goals like climate change initiatives and sustainable aviation fuel on one hand, and fiduciary obligations to plan participants on the other. The plaintiffs did not get monetary damages — the court found they had not proven the breach caused plan losses. But on February 11, 2026, Judge O’Connor awarded approximately $4.6 million in attorney’s fees, calling the case a “significant and novel issue” and saying the award would incentivize American and other companies “to better adhere to the duty of loyalty.”¹⁶ The court also entered a permanent injunction requiring the appointment of two independent benefits committee members and annual certifications that investment decisions and proxy voting would be based solely on financial performance, not ESG, DEI, or sustainability criteria.¹⁷

State Climate Cases Still Moving Forward

Several state liability suits are still live. In Oregon, Multnomah County’s case against Exxon Mobil and 24 other defendants continues. On May 7, 2026, the Oregon Circuit Court denied the fossil fuel companies’ motion to pause proceedings while the Supreme Court resolves Suncor, citing the risk that aging witnesses could lose memories and evidence could be lost during a “multi-month, possibly year-long” delay.¹⁸ The case has not yet reached discovery, but the refusal to pause signals that at least some judges are unwilling to let procedural delays stall these lawsuits indefinitely.¹⁹

Trial courts in Massachusetts, Vermont, Rhode Island, California, and Hawaii have allowed core deception and consumer-protection claims to proceed against fossil fuel companies, according to the Union of Concerned Scientists. The central question for 2026, the group argues, is whether these cases can break out of “procedural purgatory” and move into discovery, evidentiary hearings, and trial.²⁰ That is where the next settlements, if any, would come from.

Legislation That Would Wipe Out Pending Cases

Any settlement path can be cut off by Congress. In April 2026, Rep. Harriet Hageman of Wyoming and Sen. Ted Cruz of Texas introduced the Stop Climate Shakedowns Act of 2026. If enacted, it would grant oil and gas companies broad immunity from climate liability lawsuits, dismiss all pending climate accountability cases, void state-level climate superfund laws, and block future efforts to hold the industry financially responsible for climate damages. The bill would also affirm exclusive federal authority over greenhouse gas regulation.²¹ Analysts have noted that while the bill may not pass as a standalone measure, its provisions could be folded into a larger package or reconciliation bill. Utah and Iowa have already enacted their own laws granting legal immunity to corporations for climate-related harm.¹⁰

International Climate Cases to Watch

Climate litigation is also moving overseas, with roughly 3,000 cases filed across 60 countries as of mid-2025 and nearly 60 percent of new filings since 2020 coming from the Global South.²²

Indonesian Islanders v. Holcim

Four residents of Pari Island, Indonesia, are suing Swiss cement company Holcim in the Cantonal Court of Zug, seeking compensation for climate-related flooding and rising seas, financial contributions toward flood protection, and a rapid reduction in the company’s CO2 emissions. A study commissioned by the plaintiffs’ supporters estimated Holcim emitted over seven billion tonnes of carbon dioxide between 1950 and 2021.²³

On December 22, 2025, the court declared the suit admissible — the first time a Swiss court has agreed to hear a climate liability case against a major corporation. The court rejected the argument that climate protection is solely political, stating court decisions “complement” rather than replace democratic climate policy. It also rejected Holcim’s defense that its individual contribution was too small to matter, reasoning that “every single contribution is essential for counteracting climate change.”²⁴ Holcim has signaled an appeal. The case now moves toward a merits examination.

Shell v. Netherlands

Fossil fuel companies are also using international investment treaties to challenge climate-driven government decisions. Shell filed an arbitration claim against the Netherlands at ICSID (Case No. ARB/26/2) on December 23, 2025, challenging the Dutch government’s accelerated closure of the Groningen gas field, which was shut down to mitigate earthquake damage to homes. Shell seeks full compensation and is invoking the Energy Charter Treaty’s 20-year sunset clause, even though the Netherlands formally withdrew from the treaty in 2025.²⁵ The case is pending.

The outcome of Suncor v. Boulder, now headed for argument in October 2026, is the single development most likely to determine whether the Vanguard deal remains an outlier or becomes the first of many climate change settlements over the next several years.

1
Reuters. Vanguard Says It Settles Litigation Filed by Texas Attorney General, Other States
2
ESG Dive. Vanguard Settles Antitrust Coal Case With Texas, Red States
3
Texas Attorney General. Attorney General Paxton Secures Historic Industry-Changing Agreement With Vanguard to Protect Coal Industry
4
Columbia Law School Sabin Center. Climate Litigation Updates, March 23, 2026
5
U.S. Supreme Court. Suncor Energy v. County Commissioners of Boulder County, No. 25-170
6
SCOTUSblog. Suncor Energy Inc. v. County Commissioners of Boulder County
7
Columbia Law School. Supreme Court Agrees to Hear Fossil Fuel Companies’ Appeal in Boulder Climate Case
8
U.S. Department of Justice. Justice Department Files Complaint Against Minnesota Over Its Attempt to Override Federal Law
9
Crowell & Moring. DOJ Continues Attempt to Block State Court Climate Suits With Minnesota Complaint
10
E&E News. The Trump Admin Is Trying to Stop State Climate Lawsuits. It Isn’t Working.
11
U.S. Department of Justice. Justice Department Files Motion for Summary Judgment in Challenge to New York’s Climate Change Superfund Act
12
U.S. Department of Justice. Justice Department Files Motion for Summary Judgment in Challenge to Vermont’s Climate Superfund Law
13
The Daily Tar Heel. Carrboro Duke Energy Lawsuit Dismissed
14
North Carolina Courts. Town of Carrboro v. Duke Energy Corp., 2026 NCBC 13
15
Climatecasechart.com. Spence v. American Airlines, Inc.
16
Law360. Spence v. American Airlines, Inc., et al.
17
Climatecasechart.com. Spence v. American Airlines, Inc.
18
Columbia Law School Sabin Center. Climate Litigation Updates, May 29, 2026
19
Climatecasechart.com. County of Multnomah v. Exxon Mobil Corp.
20
Union of Concerned Scientists. What to Watch in Climate Litigation in 2026
21
Mother Jones. Republicans Introduce Bills to Shield Big Oil From Climate Liability Lawsuits
22
Context News. Climate Change in Court: Cases to Watch in 2026
23
Al Jazeera. Swiss Court to Hear Indonesian Islanders’ Climate Case Against Cement Giant
24
ECCHR. Court of Zug Declares Climate Lawsuit Against Holcim Admissible
25
International Institute for Sustainable Development. Fossil Fuel Giants Challenge the Netherlands Over Groningen Gas Field Closure