Issue - February 17, 2026

Good morning. It’s Tuesday, February 17, and this week’s ESG Litigation Weekly covers a North Carolina judge’s dismissal of Carrboro’s climate lawsuit against Duke Energy, EPA’s final rule rescinding the 2009 greenhouse gas endangerment finding for vehicles and rolling back related federal GHG standards, new EU acts that set out how the bloc will implement its ban on destroying unsold clothing and footwear under the ESPR, and more.

Carrboro Climate Lawsuit Against Duke Energy Dismissed as a Political Question
A North Carolina Special Superior Court judge dismissed the Town of Carrboro’s lawsuit against Duke Energy, ruling the case raises issues that courts are not suited to decide. Carrboro sought damages for alleged harm to municipal property and brought claims including nuisance, trespass, and negligence, arguing Duke’s conduct contributed to climate-related impacts such as extreme weather. The judge said Carrboro had standing, but concluded that decisions about North Carolina’s energy and emissions policy are assigned to the legislature and regulators, including the Utilities Commission and the Department of Environmental Quality. Duke’s other dismissal motion was not reached.
🔗 Read more → Court Order, Town of Carrboro’s Complaint Document

Federal Court Enjoins Oregon From Enforcing Packaging EPR Law Against NAW Members
A federal judge in Oregon granted the National Association of Wholesaler-Distributors (NAW) a preliminary injunction barring Oregon Department of Environmental Quality Director Leah Feldon from enforcing the Plastic Pollution and Recycling Modernization Act (PPRMA) against NAW and its members while the case proceeds. The court denied the defendants’ motion to dismiss NAW’s Dormant Commerce Clause and Fourteenth Amendment due process claims and dismissed other claims without prejudice, including Oregon constitutional, unconstitutional conditions, and equal protection claims, and all claims against Environmental Quality Commission members. The PPRMA mandates that producers of packaging, paper goods, and food service items contribute to the funding of recycling programs and take responsibility for ensuring their materials are properly recycled.
🔗 Read more → Court Order via CourtListener, NAW’s Press Release

NAACP Sends 60-Day Clean Air Act Notice Over xAI Turbines in Mississippi
Earthjustice and the Southern Environmental Law Center, representing the Mississippi State Conference of the National Association for the Advancement of Colored People (NAACP) and the national NAACP, sent xAI a 60-day notice of intent to sue under the Clean Air Act. They allege that xAI installed at least 27 gas turbines in Southaven, Mississippi, and has operated them without required air permits to power its Colossus II data center in South Memphis. The turbines can generate up to 495 megawatts and are alleged to emit NOx, particulate matter, and hazardous pollutants. The groups say similar unpermitted turbines at xAI’s earlier Colossus I site were removed after prior notice.
🔗 Read more → Earthjustice (Press Release, Notice of Intent)

Investor Derivative Suit Targets BlackRock Leaders Over Alleged Coal Output Constraints
A BlackRock shareholder filed a derivative lawsuit in federal court in Texas against current and former officers and directors, including CEO Laurence Fink and CFO Martin Small. The complaint accuses BlackRock used its large shareholdings and stewardship activity to pressure major coal producers to adopt production-reduction targets aligned with net-zero initiatives, contributing to lower coal output from 2019 to 2022 despite rising demand and prices. The suit claims the conduct exposed BlackRock to significant antitrust risk and alleges the company marketed certain funds as not ESG-driven while using voting power to support climate-related actions.
🔗 Read more → Reuters, Complaint Document via Thomson Reuters

EPA Revokes 2009 GHG Endangerment Finding and Repeals Related Standards
The U.S. Environmental Protection Agency (EPA) issued a final rule rescinding the 2009 greenhouse gas (GHG) endangerment finding for new motor vehicles and engines and repealing all federal vehicle and engine GHG standards adopted under Clean Air Act Section 202(a)(1) for model years 2012 through 2027 and later. EPA said Section 202(a)(1) does not authorize regulating vehicle GHG emissions to address global climate change, citing Supreme Court developments including West Virginia v. EPA and Loper Bright. The rule also repeals related compliance programs, reporting requirements, and credit provisions, including off-cycle credits for start-stop systems. EPA indicated that the criteria pollutants and air toxics standards remain unchanged.
🔗 Read more → EPA (Press Release, Final Rule and Fact Sheets)

EU Adopts Acts to Implement Ban on Destroying Unsold Clothing and Footwear
The European Commission adopted a delegated regulation and an implementing regulation under the Ecodesign for Sustainable Products Regulation (ESPR) to support the ban on destroying unsold apparel, clothing accessories, and footwear. The delegated act sets limited derogations, including cases involving safety concerns or product damage, with national authorities overseeing compliance. The implementing act introduces a standardized format for disclosing volumes of unsold consumer goods discarded as waste, which applies from February 2027. The ban and derogations apply to large companies from July 19, 2026, with medium-sized companies expected to follow in 2030. The Commission estimates 4% to 9% of unsold textiles are destroyed annually in Europe.
🔗 Read more → European Commission (Press Release, Delegated Regulation, Implementing Regulation, Annex to the Implementing Regulation)

Germany Cabinet Approves Draft Law to Update Packaging Rules Ahead of EU Regulation
Germany’s cabinet approved a draft Packaging Law Implementation Act (VerpackDG) to align national rules with the EU Packaging and Packaging Waste Regulation, which applies from August 12, 2026. The draft would require producer responsibility organizations and producers not represented by them to fund packaging waste-prevention measures, including support for reuse and refill systems. It would also expand authorization requirements beyond existing dual systems by requiring approvals for producer responsibility organizations and certain producers through the Central Agency Packaging Register (ZSVR). The draft would raise recycling quotas from 2028, including 95% for aluminum and ferrous metals and a 75% plastics recycling quota, with 70% met via material recycling.
🔗 Read more → BMUKN (Press Release, VerpackDG Draft Law)

New York Senate Advances Package to Tighten Pollution Rules and Expand Climate Disclosures
The New York State Senate advanced a package of environmental bills aimed at strengthening air and public health protections. Measures include an indirect source review permit for heavy distribution warehouses, stricter lead contamination standards, and new ambient air standards for certain toxic air contaminants with fenceline monitoring. The package also includes bills to ban and penalize sales of certain PFAS-containing products, require PFAS testing and reporting by certain wastewater dischargers, and codify prohibitions on emissions tampering devices. It also advanced the Climate Corporate Data Accountability Act (S.9072A), which would require businesses with more than $1 billion in revenue to disclose Scope 1, Scope 2, and Scope 3 GHG emissions.
🔗 Read more → The New York Senate (Press Release with the List of Legislative Components, Bill S.9072A)

Federal Judicial Center Removes Climate Science Chapter From Judges’ Evidence Manual
The Federal Judicial Center (FJC) removed a climate science section from the Fourth Edition of its Reference Manual on Scientific Evidence after objections from more than two dozen Republican state attorneys general. In a February 6 letter to West Virginia Attorney General John McCuskey, FJC Director Judge Robin L. Rosenberg said the chapter had been omitted. The attorneys general argued the material could favor environmental advocates in climate litigation, particularly on attribution science. The removed section ran more than 80 pages and was authored by Columbia University affiliates. A revised manual notes the omission.
🔗 Read more → Reference Manual on Scientific Evidence - Fourth Edition, Bloomberg Law

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Judge Keeps Exxon Defamation Suit Against California AG Alive Over Recycling Criticism
A federal judge in the Eastern District of Texas denied California Attorney General Rob Bonta’s motion to dismiss Exxon Mobil’s defamation suit over Bonta’s criticism of Exxon’s advanced plastics recycling initiatives. The court noted the dispute stems from California litigation accusing Exxon of misleading the public about recycling and plastic pollution. It held that Bonta’s official immunity defense depends on whether the challenged statements were objectively false and on good faith issues for later stages. The court also dismissed environmental groups and a related fund for lack of personal jurisdiction and granted intervention by several Texas local governments.
🔗 Read more → Court Order via JUSTIA

KPMG on the “ESG-Led” Legal Function and the Join-the-Dots Role
A KPMG paper argues that ESG is reshaping the in-house legal function from a reactive adviser into a business partner that helps steer strategy. It highlights expanding liability and governance pressures on directors, intensifying scrutiny of sustainability reporting, and growing links between ESG performance, access to capital, and talent retention. The paper urges legal teams to join the dots across finance, procurement, IT, and HR, build clear governance rules, and anticipate climate and social risks. It also suggests embedding shared ESG targets, including through compensation alignment.
🔗 Read more → KPMG Publication: “The ESG-led Legal Function of the Future”

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