Issue - January 27, 2026

Good morning. It’s Tuesday, January 27, and this week’s ESG Litigation Weekly covers Michigan’s federal antitrust lawsuit against several major oil companies and the American Petroleum Institute, a U.K. court decision refusing BHP permission to appeal a liability ruling linked to the 2015 Mariana dam collapse, RWE’s response to a climate damages lawsuit filed by farmers in Pakistan’s Sindh region, and more.

Michigan AG Sues Major Oil Companies and API in Federal Antitrust Case Over Alleged Renewable Suppression
Michigan Attorney General (AG) Dana Nessel filed a federal antitrust lawsuit in the U.S. District Court for the Western District of Michigan against BP, Chevron, Exxon Mobil, Shell, and the American Petroleum Institute (API). The complaint alleges violations of the Sherman Antitrust Act, Clayton Antitrust Act, and Michigan Antitrust Reform Act, claiming that defendants acted as a cartel to restrain trade and suppress competition from renewable energy. Michigan alleges coordinated conduct over decades, including abandoning renewable products, using patent tactics to hinder rivals, suppressing information, and leveraging trade associations to divert investment away from renewables. The lawsuit claims Michigan consumers paid higher energy costs and had fewer choices as a result.
🔗 Read more → Michigan Department of AG (Press Release, Court Filing)

UK Court Refuses BHP Permission to Appeal Liability Ruling in Mariana Dam Case
The UK High Court refused BHP permission to appeal a ruling that found it liable for the 2015 collapse of the Fundao dam in Mariana, Brazil, in a lawsuit that claimants’ lawyers have valued at up to £36 billion. The dam was owned and operated by Samarco, a BHP and Vale joint venture. BHP said it will apply directly to the Court of Appeal and will continue defending the case, while arguing Brazil is the appropriate forum for remediation. A further trial to determine the amount of damages is due to begin in October, with a ruling expected in mid-2027.
🔗 Read more → Reuters, Consequentials Judgment via UK Judiciary

RWE Considers Pakistani Farmers’ Climate Damages Lawsuit as Unfounded
RWE published a statement responding to a recent lawsuit filed in the Heidelberg Regional Court by 39 farmers from Pakistan’s Sindh region and the case’s press release by the European Center for Constitutional and Human Rights (ECCHR). The farmers seek compensation for losses linked to the 2022 floods, alleging that RWE and Heidelberg Materials’ emissions contributed to climate change and increased the likelihood and severity of extreme flooding. RWE considers the claim unfounded and the NGO-backed approach to imposing civil liability on German companies for worldwide climate damages legally inadmissible. The company also argues it would generally undermine legal certainty and points to prior dismissals of similar climate lawsuits. RWE highlights that its decarbonization targets and strategy are aligned with the Paris Agreement.
🔗 Read more → RWE’s Press Release, ECCHR’s Press Release, Climate Cost Case Pakistan

EU General Court Upholds Reproductive Toxicity Label for Rubber Additive DAPD
The EU’s General Court rejected a challenge by Djchem Chemicals Poland and Goodyear to the European Commission’s harmonized classification of DAPD, known in industry as Benpat, as a reproductive toxicant (category 1B). The companies argued the classification relied too heavily on animal studies and effectively required the industry to prove human safety. The court found regulators followed the required process and could rely on expert scientific conclusions, including evidence of adverse reproductive effects observed in rat studies, and it found no manifest error or procedural breach. The classification remains in force, with any appeal limited to points of law.
🔗 Read more → Court Judgment via EUR-Lex, Case Docket via InfoCuria

California Seeks Ninth Circuit Review of PHMSA Actions Allowing Las Flores Pipeline Restart
California AG Rob Bonta filed a petition for review in the U.S. Court of Appeals for the Ninth Circuit, challenging Pipeline and Hazardous Materials Safety Administration (PHMSA) orders that reclassified two California onshore oil pipelines (lines CA-324 and CA-325) as “interstate”, approved Sable Offshore’s restart plan, and issued an emergency special permit authorizing the restart of oil transport through the pipelines. California argues the PHMSA orders unlawfully claim exclusive federal jurisdiction and evade state oversight by the State Fire Marshal, violating the Administrative Procedure Act (APA). The pipelines have been shut for around a decade following the 2015 Refugio Beach spill, and California says the restart threatens coastal public health and environmental protections established under a prior post-spill consent decree.
🔗 Read more → California Office of the AG (Press Release, Court Filing)

Fourth Circuit Vacates Injunction Restoring Paused Environmental and Agriculture Grants
On January 21, the Fourth Circuit vacated a district court’s permanent and preliminary injunctions that had set aside the suspension/termination of federal environmental and agricultural grants and ordered the government to restore grantees’ access to funds. The panel held that the APA claims seeking reinstatement of the grants are essentially contractual and thus fall under the Tucker Act, placing jurisdiction in the U.S. Court of Federal Claims. The court remanded for further proceedings and did not reach the plaintiffs’ separate “program cancellation” theory, leaving that issue for the district court to consider on remand.
🔗 Read more → U.S. Court of Appeals for the Fourth Circuit’s Published Opinion

Lawsuit Targets EPA Rule Extending Coal Plant Toxic Wastewater Deadlines
The Center for Biological Diversity filed a petition for review in the Ninth Circuit challenging the U.S. Environmental Protection Agency’s (EPA) final rule extending compliance deadlines for coal-fired power plants’ wastewater limits under the Steam Electric Effluent Limitations Guidelines and Standards (ELG). The group disputes EPA’s revised timeline that pushes key milestones into the 2030s and allows permitting authorities to set site-specific applicability dates. The petition also challenges EPA’s related “No Action Assurance”, under which the agency plans to exercise enforcement discretion for certain NPDES violations tied to the 2020 and 2024 ELG requirements during a defined window, if conditions are met.
🔗 Read more → Center for Biological Diversity (Press Release, Court Filing), EPA’s Fact Sheet

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EU Consults on ESMA Fees and Penalty Procedures for ESG Rating Providers
The European Commission opened a public consultation on two draft delegated regulations under the EU ESG Ratings Regulation (Regulation (EU) 2024/3005). One would set the supervisory fees that ESG rating providers must pay to the European Securities and Markets Authority (ESMA). The other would spell out how ESMA can impose fines and periodic penalty payments, including rights of defense, limitation periods, and the collection of penalties. Public feedback is due by February 13, 2026.
🔗 Read more → ESG Ratings Initiatives and Draft Delegated Regulations (Fines and Periodic Penalty Payments Imposed on Rating Providers, Supervisory Fees for Rating Providers)

EU Opens Feedback on Draft Carbon Farming Certification Methodologies
The European Commission has also opened a four-week public feedback period on draft certification methodologies for carbon farming under the EU Carbon Removals and Carbon Farming Regulation (Regulation (EU) 2024/3012). The proposal aims to support result-based payments for farmers and foresters adopting practices such as peatland rewetting, agroforestry, soil protection measures, and new forest planting. The draft methodologies would set quality requirements for quantification, additionality, storage/monitoring/liability, and sustainability safeguards to improve transparency and credibility for climate-related claims and reporting. Feedback closes on February 19, 2026.
🔗 Read more → Draft Delegated Regulation and Annex

California AG Secures $3.35 Million Settlement Over “Recyclable” Plastic Bag Claims
California AG Rob Bonta announced $3.35 million in settlements with Novolex, Inteplast, and Mettler over allegations they unlawfully marketed and sold plastic bags as recyclable in violation of SB 270, the Environmental Marketing Claims Act (EMCA), and state false advertising and unfair competition laws. The state alleged the bags could not be recycled to any significant degree in California despite recyclability certifications and labeling, including the use of the chasing arrows symbol. The investigation found producers could not substantiate recycling rates or provide evidence that California facilities actually recycle the bags, and a statewide survey found most facilities do not accept them. Together with the settlements in October 2025 with Revolution Sustainable Solutions, Metro Poly Corp., PreZero US Packaging, and Advance Polybag, they bring total payments from seven producers to over $5.1 million.
🔗 Read more → California Office of the AG

Watchdog Challenges Aetium Carbon Credits for EV and Solar Use as Misleading
Australia-based Climate Integrity said its analysis raises concerns that Aetium’s carbon credit platform could mislead consumers about credits linked to existing rooftop solar and electric vehicle (EV) use. Climate Integrity cited Aetium marketing that portrays credits as “genuine CO₂ reductions” that can “cancel out” a buyer’s footprint, and said the credits are not validated by third-party offset certifiers or independent standards regimes, nor certified by any government-operated scheme. Climate Integrity argues the credits fail “additionality” because participants likely would have bought and used EVs or solar systems without the scheme, and it lodged complaints with the Australian Competition and Consumer Commission (ACCC) and Ad Standards.
🔗 Read more → Climate Integrity (Media Release, Complaint with ACCC, Complaint with Ad Standards)

Chief Sustainability Officers Brace for Role Uncertainty, Budget Cuts, and Greenwashing Risk in 2026
An Eco-Business article says chief sustainability officers (CSOs) are entering 2026 with growing anxiety that their roles could be diluted or eliminated as companies restructure and push sustainability responsibilities into finance, risk, or operations. CSOs face tighter budgets and rising pressure to prove near-term business value, even as regulatory demands expand across the Asia Pacific. The article highlights risks from policy delays, supply chain inertia, and reporting fatigue, alongside heightened concern about greenwashing and “greenrinsing” driven by weak data. It also flags talent pipeline strain as AI takes over entry-level reporting work.
🔗 Read more → Eco-Business

Catch up on previous editions → ESGLitigation.com

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