Regulation Without Borders: A Single State Attempts to Dictate Energy Policy Nationwide

A s the Supreme Court enters the home stretch of its current term, Suncor Energy Inc. v. County Commissioners of Boulder County is emerging as one of the most consequential cases of the next. There, the Court will decide whether a single state’s tort law can dictate energy policy nationwide. And it will confront mounting efforts to bypass Congress and override a principle as old as the Republic: Each state governs within its own borders, and none may govern the rest.

In this lawsuit, the county of Boulder, Colo., seeks to extract billions of dollars from energy companies for “climate change harms.” Boulder does so under the theory that Colorado tort law imposes liability for the sale of gasoline, among other things. That threat of liability is designed to create economic pressure on businesses to reduce the sale of fossil fuels and, in turn, emissions. Importantly, though, Boulder seeks relief for conduct that occurs well beyond Colorado’s state lines, targeting emissions released from every state in the country and beyond.

That runs afoul of fundamental constitutional constraints. Our Constitution rests on the premise that states operate independently with control over conduct within their territories. When the colonies declared themselves “Free and Independent States” almost 250 years ago, they became “fully sovereign nations.” Emer de Vattel, the Founding era’s foremost authority on the law of nations, put the premise plainly: Each state had the right “to be governed as they think proper.” And “no state ha[d] the smallest right to interfere in the government of another.” As Gordon Wood recounts in The Creation of the American Republic, Samuel Adams likewise acknowledged that each state had “an interest and will of its own.”

To be sure, the states surrendered some of their sovereignty when they ratified the Constitution. But the Tenth Amendment makes clear that the states’ limited delegation of power flowed vertically to the federal government, not horizontally to coequal states. Nothing in the Constitution removes the states’ territorial sovereignty vis-à-vis other states nor deprives states of “all the rights of sovereignty which they before had,” as Alexander Hamilton made clear in Federalist No. 32.

Boulder’s suit ignores those constitutional constraints. It proceeds on the premise that Colorado can “act as its own republic,” assuming for itself the right to make complex, nationwide policy judgments on behalf of Americans from Savannah to Seattle. Millions of Tennesseans drive to work every morning in gas-powered cars; households in Wisconsin cook with natural gas; cattle ranches in Texas emit methane. Boulder claims that Colorado law can regulate all of it.

That turns our constitutional structure on its head. In the words of Justice Brandeis, “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Our Constitution can, and does, comfortably tolerate divergent policy positions among the states. That’s the beauty of our system.

But the Constitution’s diffusion of power only works when the states regulate within their own borders and leave truly interstate disputes — like global emissions — to the federal government. Our federal system does not allow a single state to externalize the costs of its preferred policies onto citizens who possess no electoral recourse against the officials imposing them.

Nor can our national economy function efficiently if each state presses its own policy views through cross-border regulations. Inevitably, companies will face irreconcilable mandates. When that happens in the federal-state context, the Supremacy Clause tells regulated parties what to do — follow federal law. But no state can claim preeminence over another. So businesses will face a no-win scenario that exposes them to liability and operational uncertainty no matter which course they choose.

Lawsuits will proliferate. Costs will rise. And, ultimately, consumers will suffer.

Colorado may make its own policy choices on how best to manage natural resources within its borders while ensuring reliable and affordable energy. But it is not free to impose those decisions on the rest of the country through tort suits — just as other states cannot impose their preferences on other hotly contested political issues. Each state must be left to “make its own reasoned judgment about what conduct is permitted or proscribed within its borders.” Otherwise, our 50 laboratories of democracy will be reduced to one.

The Court should preserve the Constitution’s promise of territorial sovereignty and end this litigation.