Federal Judge Blocks New York’s Climate Superfund Law

A federal judge on Monday struck down New York State’s landmark climate “superfund” law, ruling that the sweeping legislation conflicts with federal authority.

The law, signed by Governor Kathy Hochul in 2024, would have required major fossil fuel companies to pay $75 billion over 25 years to fund state resilience projects aimed at combating the effects of global warming. Modeled after the federal Superfund program for industrial waste cleanup, the legislation was designed to hold polluters accountable under the “polluter pays” principle.

Judge Brenda K. Sannes, an Obama appointee and chief judge for the Northern District of New York, ruled that the state’s “unusual and sweeping statute” was unenforceable, writing in a 63-page decision that its ambitions surpassed the limits of state law. The ruling relied heavily on a 2021 decision by the Second Circuit Court of Appeals dismissing a lawsuit by New York City against oil companies.

State Senator Liz Krueger, a key sponsor of the bill, expressed disappointment with the ruling, arguing that the court failed to distinguish between municipal claims and a state legislature exercising its constitutional powers to raise revenues and protect its citizens. “We anticipated many rounds of legal wrangling before the law could take effect,” Krueger stated.

The decision was celebrated by opponents of the law, including West Virginia Attorney General JB McCuskey, whose office led the multi-state challenge. McCuskey called the ruling “a major victory in the fight against liberal states, trying to balance their budgets on the backs of our hard-working men and women in the coal, oil and gas industries.”

It remains unclear whether New York officials will appeal the decision. Ken Lovett, senior communications adviser on energy and environment for Governor Hochul, stated that taxpayers should not bear the burden of polluter-caused damages. “We are reviewing the decision to determine possible next steps,” Lovett added.

Environmental advocates are urging the state to appeal. Maya Golden-Krasner, deputy director of the Center for Biological Diversity’s Climate Law Institute, emphasized that New York should appeal and noted that a campaign for similar legislation in California is “gaining momentum every day.”

The legal challenge, supported by the Justice Department and the U.S. Chamber of Commerce, argued that the law violated the Constitution and the federal Clean Air Act by attempting to regulate greenhouse gas emissions, which falls under federal purview. Neil Bradley of the Chamber of Commerce stated that the court “sent a strong message to states: The Constitution does not allow you to fill your budget holes by punishing businesses for lawful conduct.”

Vermont’s similar climate superfund law is facing a parallel legal challenge, while proposed bills in other states have stalled. The legal battles come as state and local governments continue to pursue litigation against fossil fuel companies over climate change damages, with approximately two dozen cases still pending. The U.S. Supreme Court is expected to hear arguments in October in a case from Boulder, Colorado, which will address whether federal law precludes state-level climate damage lawsuits—a decision that could have far-reaching implications for both superfund laws and ongoing litigation.

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