The ruling, issued by the California Court of Appeal, is a procedural but significant development in the consolidated In re Fuel Industry Climate Cases, which were brought by several California cities and counties. The plaintiffs allege that fossil fuel companies misled consumers about the climate impacts of their products and contributed to climate-related damages across the state.
At issue was whether Citgo’s historical business activities in California were sufficiently connected to the alleged harms to justify state court jurisdiction. Citgo argued that it did not refine gasoline in California and played a limited role in direct marketing, characterizing itself primarily as a supplier operating outside the state.
The appeals court rejected that argument.
In its opinion, the court found that Citgo’s long-standing role in supplying gasoline to branded retail locations in California—including through distribution, trademark licensing, and point-of-sale branding—was directly related to the plaintiffs’ failure-to-warn claims. The court emphasized that claims need only “arise out of or relate to” a company’s in-state activities, not be caused exclusively by them.
The judges also dismissed Citgo’s contention that branding and trademarks did not amount to meaningful marketing activity. The court held that trademarks function as advertising and that the absence of climate-related warnings on branded materials supported the plaintiffs’ theory at this stage of the case.
Citgo further argued that being required to litigate in California would be unfair. The court disagreed, pointing to California’s substantial interest in addressing climate-related harms occurring within its borders, including sea-level rise, flooding, wildfire risk, and infrastructure damage. Given Citgo’s decades-long participation in the California fuel market, the court said the company could reasonably anticipate being subject to suit there.
The ruling does not address the merits of the underlying climate claims. However, it reinforces a growing legal trend: jurisdictional defenses may offer limited protection for companies with historical market participation, particularly where branding, distribution, and failure-to-warn theories are involved.
