The City of Richmond in the State of California is being sued over its approval of plans from Chevron to expand its refinery in the area.
Environmental groups have brought the lawsuit, claiming that an environmental review concealed the fact that the project would reduce
air quality and increase risks of oil spills and accidents.
They claim that vulnerable groups in the area are already affected by health problems relating to industrial pollution, including asthma and cancer.
Greg Karras, a senior scientist with Communities for a Better Environment, said: "Chevron's project would lock in a fundamental switch to dirtier oil refining that increases toxic and climate-poisoning pollution drastically when avoiding these impacts is feasible."
Torm Nompraseurt of the Asian Pacific Environment network said the City of Richmond has failed in its legal and moral obligation to protect the health of residents.
Last month, Chevron announced plans to construct a premium oil base facility at its Pascagoula refinery in Mississippi to produce 25,000 barrels per day.