A federal judge in New York has struck down the state’s recently enacted climate “superfund” law, marking the second judicial setback for the measure aimed at holding fossil fuel companies financially responsible for climate change costs. The ruling, issued Wednesday by Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York, determined that the law was preempted by the federal Clean Air Act and interfered with foreign affairs.
The New York law, enacted earlier this year, sought to require fossil fuel producers identified as responsible for more than a billion metric tons of greenhouse gas emissions since 2000 to pay $75 billion over 25 years into a dedicated fund for climate mitigation projects in the state. The legislation was modeled on the 1980 federal Superfund statute, which mandates polluters cover the costs of cleaning hazardous waste sites. New York maintained that the law addressed harms from past emissions rather than regulating future greenhouse gas output.
Judge Castel’s ruling aligns with a similar decision last month from a federal court in the Northern District of New York, which blocked the law on analogous grounds in a case brought by Republican-led states and business groups. Both judgments referenced a 2021 appellate ruling that dismissed New York City’s lawsuit seeking damages from oil companies for climate-related harm, underscoring judicial reluctance to allow states to impose liability that may conflict with federal authority.
The U.S. Justice Department and Environmental Protection Agency, which challenged the New York statute, emphasized their opposition to what they called "state overreach" in regulating energy companies. Adam Gustavson, principal deputy assistant attorney general for the Justice Department’s Energy and Natural Resources Division, cited a recent Michigan court decision dismissing a similar climate liability case as indicative of a broader judicial trend against these lawsuits.
Vermont remains the only other state to have enacted a climate superfund law, while legal challenges to that statute are also underway. Several other states have considered comparable legislation, though these efforts face stiff resistance from fossil fuel industry groups and Republican lawmakers, who argue such laws infringe upon the federal government’s exclusive role in balancing environmental and economic policy.
New York officials, including Governor Kathy Hochul’s office, expressed intent to appeal the ruling. A spokesperson emphasized the administration’s position that polluters should bear the financial responsibility for environmental damage rather than taxpayers.
Meanwhile, the Supreme Court is set to hear arguments in October regarding a separate climate liability case brought by the city of Boulder, Colorado, against ExxonMobil and Suncor Energy. The federal government is expected to support the fossil fuel companies, with the central issue revolving around whether federal law precludes such state-level claims. Concurrently, a number of states have enacted legislation aimed at shielding energy companies from climate-related liability, reflecting escalating efforts to counter these types of lawsuits nationwide.