Chief Judge Brenda Sannes of the U.S. District Court for the Northern District of New York blocked New York's Climate Change Superfund Act on Aug. 31, ruling that federal law preempts the state's effort to require fossil fuel companies to help pay for climate-related infrastructure and adaptation costs.
New York enacted the law in 2024 to establish a climate adaptation cost-recovery program requiring certain fossil fuel companies to contribute a combined $75 billion toward infrastructure projects intended to help the state adapt to climate change. The law imposed strict liability and assigned companies' shares based on greenhouse gas emissions attributable to fossil fuel extraction and crude-oil refining from 2000 through 2024.
A coalition of 22 state attorneys general led by West Virginia Attorney General J.B. McCuskey (R), along with coal, oil, and gas industry groups, sued New York in 2025, arguing that the state could not impose costs based on greenhouse gas emissions occurring outside its borders and that the federal Clean Air Act preempted the law.
Sannes agreed with the plaintiffs that federal law preempted the state law. She wrote that the Climate Change Superfund Act is "simply beyond the limits of state law" and "operates within an area of law 'in which the federal interest is so dominant'" that it cannot be enforced. The court also found that imposing costs based on emissions associated with foreign fossil fuel producers was preempted by the federal government's foreign affairs powers.
McCuskey said, "This is 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. We were the first to challenge this law because we saw it for what it was — a money grab by the elites in New York, who want to punish West Virginians for doing the jobs that enable them to heat their homes and build their cities."
Gov. Kathy Hochul’s (D) office said it was reviewing the decision to determine possible next steps. Hochul representative Ken Lovett said, “Taxpayers shouldn’t have to foot the bill for damages caused by polluters.”
The ruling limits New York's attempt to make fossil fuel companies pay for infrastructure and other costs associated with adapting to climate change. It also addresses a broader federalism dispute over how far states can independently regulate or impose costs on companies for greenhouse gas emissions associated with activity outside their borders.
The case also intersects with the Trump administration's efforts to challenge state climate and energy policies. President Donald Trump (R) issued an executive order in April 2025 directing the U.S. attorney general to identify and take action against state and local energy policies that the administration determined may be unconstitutional, preempted by federal law, or otherwise unenforceable. The order specifically criticized New York's Climate Change Superfund Act.
Gov. Kathy Hochul (D) signed the Climate Change Superfund Act in December 2024. The law drew on New York's existing environmental cleanup programs but sought to recover climate adaptation costs from fossil fuel companies based on their attributed contributions to greenhouse gas emissions.
The coalition of 22 state attorneys general challenged the law in federal court in 2025. After Trump issued his April 2025 executive order targeting certain state climate and energy policies, the U.S. Department of Justice filed a statement of interest supporting the plaintiffs in the challenge to New York's Climate Change Superfund Act.
New York's law is part of a broader state-level effort to make fossil fuel companies contribute to climate-related costs. Vermont enacted a similar climate superfund law, which the Trump administration also identified in its executive order and subsequently challenged in court.
Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.
Additional reading: