May 12 (Reuters) - Colorado's highest court on Monday

rejected efforts by ExxonMobil ( XOM ) and Suncor Energy ( SU )

to dismiss a lawsuit by the city of Boulder seeking to hold the

fossil fuel companies responsible for climate change.

The Colorado Supreme Court in a 5-2 decision said federal

law did not block Boulder and its surrounding county from

claiming that the energy companies violated state law by

misleading the public about the dangers associated with fossil

fuels.

The ruling marked only the second time a state supreme court

has allowed one of the numerous lawsuits by state and local

governments against major energy companies over climate change

to move forward in the years-long litigation.

The Hawaii Supreme Court allowed a similar lawsuit by

Honolulu to move forward against Exxon, Sunoco and several other

companies in a decision that the U.S. Supreme Court in January

declined to review.

"This ruling affirms what we've known all along:

corporations cannot mislead the public and avoid accountability

for the damages they have caused," Boulder Mayor Aaron Brockett

said in a statement.

Representatives for Exxon and Suncor did not respond to

requests for comment.

Boulder sued in 2018, alleging the companies violated

various state laws and created a public and private nuisance by

misleading the public about the role their fossil fuel products

played in exacerbating climate change.

Boulder argues they should be forced to pay for the costs it

will incur to protect its community from climate change.

The companies deny wrongdoing. They had fought for years to

have the case heard in federal court. State courts are often

considered a more favorable venue for plaintiffs.

But following years of litigation and two trips to the U.S.

Supreme Court, the case ultimately returned to state court,

where a trial judge declined to dismiss the lawsuit.

On appeal, the companies argued that Boulder's lawsuit would

interfere with the federal regulation of greenhouse gas

emissions under the Clean Air Act and impair the federal

government's ability to conduct foreign affairs.

But Justice Richard Gabriel, who like all of the Colorado

Supreme Court's other members was appointed by a Democratic

governor, said "a lawsuit does not amount to regulation merely

because it might have an impact on how actors in a given field

behave."

Justice Carlos Samour dissented, expressing concern that

Boulder's case sought to effectively regulate interstate air

pollution and could lead to "regulatory chaos."