Michigan goes after the oil industry ‘cartel’

A new lawsuit claims Big Oil coordinated to aggressively use patents, litigation and misdirection to undermine electric vehicle and solar infrastructure.

The Michigan Capitol in Lansing. Photo courtesy Ken Lund.

Michigan has become the first U.S. state to file a climate-focused antitrust lawsuit against Big Oil, alleging the industry coordinated to illegally protect itself from clean energy competition through “capture-and-kill tactics” and aggressive litigation.

The lawsuit, filed in Michigan federal court on Jan. 23, alleges oil and gas companies have known for decades that their products cause climate change, but still coordinated to undermine the build-out of renewable energy technology like electric vehicles and solar panels that could have averted the crisis.

Michigan Attorney General Dana Nessel said specifically that ExxonMobil, Chevron and others used “capture-and-kill tactics and aggressive patent litigation” to block competition from those technologies and “dismantle” early solar energy and electric vehicle charging network development.

They acted “as a cartel, agreeing to reduce the production and distribution of electricity from renewable sources and to restrain the emergence of electric vehicles and renewable primary energy technologies in the United States,” Nessel said.

The state’s lawsuit, in the U.S. District Court for the Western District of Michigan, alleges the industry’s actions violated the U.S. Clayton Act and Michigan Antitrust Reform Act. The violations effectively “locked” Michigan consumers into fossil fuel dependence and elevated energy prices that would have been reduced with greater competition, it said.

Ted Boutrous, an attorney for Chevron with the law firm Gibson Dunn, said in a statement provided to Landmark that the lawsuit “is baseless as demonstrated by multiple related court dismissals,” referring to the dozens of lawsuits seeking climate-related damages that have been filed by states and municipalities across the U.S.

Several of those cases are approaching trials after surviving motions to dismiss, but others in places like New York, New Jersey and Puerto Rico have also been dismissed.

Exxon, Shell and the American Petroleum Institute (API) didn’t immediately respond to requests for comment.

‘Capture and kill’

Michigan’s lawsuit included several examples where oil and gas companies allegedly “abandoned renewable energy projects, used patent litigation to hinder rivals, suppressed information concerning the hidden costs of fossil fuels and the viability of alternatives” and used trade associations like API to “coordinate market-wide efforts to divert capital expenditures away from renewable energy — all to further one of the most successful antitrust conspiracies in United States history.”

“In the world that would have existed but for defendants’ conspiracy, EVs would not be a fringe technology or a luxury alternative. They would be a common sight in every neighborhood—rolling off assembly lines in Flint, parked in driveways in Dearborn, charging outside grocery stores in Grand Rapids, and running quietly down Woodward Avenue.”

For instance, the suit claimed Exxon was first to develop hybrid gas-electric vehicle technology in the 1970s, and even partnered with Toyota to develop a hybrid gas-electric vehicle. The state also alleged Exxon delayed the deployment of EV battery tech by buying patents or abandoning projects, including as recently as 2009.

Chevron, meanwhile, acquired 125 patents for nickel-metal hydride (NiMH) rechargeable batteries after acquiring Texaco in 2000. gah Toyota, which brought the first Prius to market in 1997, had released a RAV4 EV for commercial fleets in 1998 using NiMH batteries and planned to bring it to consumer markets in 2001.

But Chevron, after acquiring the patents, sued Toyota and Panasonic for patent infringement, just as the RAV4 EV was set to become commercially available, and the resulting settlement delayed Toyota’s use of the batteries until 2010.

On the energy production side, the lawsuit claims Exxon, BP, Chevron and Shell were market leaders in the solar industry as early as the 1970s, but “acted in concert to dismantle their solar operations and used litigation to deter new market entrants.”

All of that has impacted the ability of Michigan to build a clean economy, the state said.

“In the world that would have existed but for defendants’ conspiracy, EVs would not be a fringe technology or a luxury alternative,” the state said in the lawsuit.

It continued: “They would be a common sight in every neighborhood—rolling off assembly lines in Flint, parked in driveways in Dearborn, charging outside grocery stores in Grand Rapids, and running quietly down Woodward Avenue.”

A ‘serious’ lawsuit

Eleanor Fox, an expert in antitrust law at New York University Law, told Landmark that the state’s complaint is “a serious lawsuit” that is “well drafted” and “compelling,” assuming the allegations are proven.

But she noted there are several significant challenges for successful antitrust cases.

It can be difficult to prove that parties had an express agreement to coordinate, for instance. And, she said, it is not unusual for companies to act in lockstep in concentrated markets — essentially, the companies don’t need backroom meetings to understand the potential threats that face their industry.

“But the complaint is a very substantial one. It sounds to me very credible that the oil industry had and has these collaborations,” Fox said. “If they did and do, it is a serious social problem.”

A new antitrust use in the climate legal fight

The lawsuit, which was prepared with the help of outside law firm Sher Edling, is the first state climate suit to focus heavily on antitrust allegations. (Two lawsuits raising antitrust claims against Big Oil in the climate context were filed by Puerto Rico municipalities, but those were dismissed last year by trial courts.)

Sher Edling has also worked on many of the other climate damages lawsuits filed by governments against the fossil fuel industry. There are currently 11 state cases pending, alongside dozens of cases filed by municipalities. Courts have rejected motions to dismiss in several of those cases, and those are currently moving toward discovery and potential trials.

But antitrust claims have been wielded on the other side of the equation by allies of the fossil fuel industry in court to try to push back against investor efforts to limit the use of fuels like coal.

The most prominent of those lawsuits was filed by a coalition of 11 Republican-led state attorneys general in 2024 against multinational institutional investors BlackRock, State Street Corporation and Vanguard Group. They alleged the companies, using their shares as leverage, illegally coordinated to pressure coal companies to reduce output in favor of renewable energy.

In August, U.S. District Judge Jeremy Kernodle, an appointee of President Donald Trump in the Eastern District of Texas, rejected a motion to dismiss filed by the investment firms.

A group of Republican attorneys general led by Florida’s James Uthmeier this week built on that effort by issuing a “warning letter” to the climate activist group Ceres, alleging its efforts to pressure firms to steer investments away from fossil fuels may run afoul of state and federal antitrust law.

A get out of jail free card?

As the state and municipality climate damages lawsuits mature, a renewed effort to grant the fossil fuel industry immunity has developed.

The American Petroleum Institute, one of the prominent trade organizations that Michigan and others allege helped coordinate the industry’s efforts to undermine climate science and renewables, has identified that immunity is a top priority for 2026.

In addition to “abusive state climate lawsuits,” the organization also said that it would like to see industry immunity from state climate Superfund laws like those passed in Vermont and New York.