A federal judge has dismissed a high-profile lawsuit brought by the Trump administration that sought to pre-emptively stop the state of Hawaii from suing major fossil fuel companies over the local impacts of climate change.

In a ruling on Wednesday, the court cited a “longstanding” precedent against unwarranted federal intervention in state court processes, dealing a setback to Washington’s strategy of shielding the oil and gas industry from state-level legal action.

The decision by U.S. District Judge Helen Gillmor in Honolulu marks the second time in early 2026 that federal courts have blocked the U.S. Department of Justice’s (DOJ) attempts to halt environmental lawsuits before they are heard in state courts. The ruling reinforces a pattern of judicial resistance to the administration’s approach.

Earlier this year, in January, another federal judge dismissed a similar DOJ lawsuit aimed at preventing Michigan from pursuing action against major oil companies under environmental and consumer protection laws.

Neither the Justice Department nor Hawaii’s Attorney General’s office immediately responded to requests for comment.

Dispute rooted in energy policy and legal strategy

The legal dispute dates back to April 2025, when the Justice Department filed simultaneous lawsuits against Hawaii and Michigan in an unprecedented move. The DOJ sought federal injunctions to block both states from launching planned multi-billion-dollar lawsuits against global oil companies.

The Trump administration argued that allowing individual states to regulate greenhouse gas emissions through litigation would create a fragmented regulatory landscape. It also claimed such cases posed a threat to national security, warning they could harm domestic energy production, increase fuel prices and undermine its goal of energy dominance.

However, the strategy failed to deter state action. One day after the federal filing in 2025, Hawaii proceeded with its own lawsuit in state court against a group of major fossil fuel firms, including BP Plc, Chevron Corp, Exxon Mobil Corp and Shell Plc.

The case alleges the companies carried out a decades-long campaign of deception, selling products they knew would contribute to global warming while funding disinformation to obscure climate science. Hawaii is seeking damages to cover rising costs linked to sea-level rise, coastal erosion and extreme weather.

Judge cites lack of concrete federal harm

In dismissing the case, Judge Gillmor did not address climate science or the oil companies’ conduct. Instead, she focused on constitutional limits to federal jurisdiction.

She ruled that the DOJ lacked legal standing because its claims were too speculative. To bring a case in federal court, a plaintiff must demonstrate a “concrete and particularised” injury.

The Justice Department argued that a potential future victory for Hawaii could harm federal energy interests. Judge Gillmor rejected this argument.

“The Justice Department’s ‘attempt to predict the outcome of a yet-to-be-filed lawsuit and how it could possibly injure the federal government in the future is not a concrete injury-in-fact',” Gillmor wrote.

She also stressed the importance of federalism, noting that federal courts should not interfere lightly with a state’s right to use its own legal system to seek redress.

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Hawaii case to proceed

With the federal case dismissed, Hawaii’s lawsuit against BP, Chevron, ExxonMobil and Shell will now move to the discovery phase in state court. This stage could compel the companies to disclose internal communications about their knowledge of climate science.

Legal experts say the ruling may encourage other U.S. states and cities to pursue similar claims, potentially leading to prolonged and costly litigation for the fossil fuel industry over its role in climate change.

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