A federal judge has invalidated New York State’s climate “superfund” law, ruling that it conflicts with federal regulations. The legislation, enacted in 2024 under Governor Kathy Hochul, aimed to require major fossil fuel companies to pay $75 billion over 25 years to finance initiatives designed to enhance the state’s resilience to extreme weather events linked to climate change.
The law was modeled on the federal Superfund program, traditionally focused on cleaning up industrial waste, and was intended to hold fossil fuel companies accountable for environmental damages related to greenhouse gas emissions. New York’s initiative inspired similar legislative efforts in other states, including Vermont, but faced immediate legal challenges from Republican-led states, business groups, and the Trump administration, all arguing that such state laws encroach on federal authority.
Judge Brenda K. Sannes, appointed by President Obama and serving as chief judge for the Northern District of New York, issued a 63-page ruling on Monday declaring the statute unenforceable. The judge noted that the law’s expansive scope exceeded the boundaries of state power. Her decision heavily referenced a 2021 ruling by the U.S. Court of Appeals for the Second Circuit, which dismissed a lawsuit brought by New York City against oil companies over climate-related damages, underscoring federal preemption issues.
The challenge to the law was led by West Virginia Attorney General JB McCuskey, who called the decision a significant victory, characterizing the law as an attempt by liberal states to shift budget burdens onto workers in fossil fuel industries. Meanwhile, state Senator Liz Krueger, a law sponsor, expressed disappointment that the court did not acknowledge the legislature’s constitutional authority to raise revenue and protect residents, predicting prolonged legal disputes.
Governor Hochul’s office indicated that it was reviewing the ruling to determine potential next steps, emphasizing that taxpayers should not bear the costs of harm caused by polluters. Environmental advocates have urged the state to appeal, highlighting growing interest in similar legislation elsewhere, notably California.
These legal developments occur amid longstanding and unresolved litigation by multiple states and cities seeking to hold fossil fuel companies financially responsible for climate change impacts. To date, none of these cases have proceeded to trial. The U.S. Supreme Court is scheduled to hear arguments in October in a related case from Boulder, Colorado, which raises the same core question about whether federal law prevents state-level damages claims based on climate change.
Business representatives, including Neil Bradley of the U.S. Chamber of Commerce, praised the ruling as a clear message that states cannot address budget shortfalls by penalizing companies for lawful activities. Meanwhile, the U.S. Justice Department has supported the legal challenge to New York’s law and has filed a separate suit in the Southern District of New York. Vermont’s climate superfund law is also facing a similar legal challenge, and comparable bills in other states have yet to pass.
The outcome of these legal battles is expected to have significant implications for the extent to which states can hold fossil fuel companies liable for climate-related damages and pursue climate-focused financial remedies outside the federal framework.