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A federal judge has blocked New York from enforcing its $75 billion climate superfund law.

The law sought money from major fossil fuel companies. That money, in turn, would have helped pay for climate-related damage in New York.

Chief U.S. District Judge Brenda Sannes ruled that the state cannot enforce the law. In particular, she found that federal law preempts the measure.

The ruling is a major win for energy companies and industry groups. At the same time, it raises a key legal question.

How much power do states have to create their own climate liability laws?

New York passed the Climate Change Superfund Act in 2024. Under the law, the state sought to collect $75 billion over 25 years. Meanwhile, the money would have funded projects to protect communities from climate risks.

Key Takeaways

• A federal judge blocked New York’s $75 billion climate superfund law.
• As a result, New York cannot enforce the program for now.
• The Clean Air Act played a central role in the decision.
• In addition, the court found a conflict with the federal foreign affairs power.
• New York planned to collect about $3 billion each year.
• Those payments were scheduled to begin in 2028.
• The law focused on companies linked to at least 1 billion tons of emissions.
• Meanwhile, 22 Republican state attorneys general challenged the law.
• The U.S. Chamber of Commerce and other groups also opposed it.
• For now, New York is reviewing the ruling and possible next steps.
• Vermont has a similar climate law that also faces a legal challenge.

What Is New York’s Climate Superfund?

New York’s Climate Change Superfund Act was designed to make large fossil fuel companies help pay for climate costs.

Gov. Kathy Hochul signed the law in December 2024.

At its core, the law followed a “polluter pays” approach. It aimed to shift some climate costs from taxpayers to major fossil fuel companies.

Under the law, covered companies would have paid a total of $75 billion over 25 years.

In practical terms, the plan called for about $3 billion in payments each year. Those payments were set to begin in 2028.

What Would the Money Fund?

New York planned to use the money for climate protection projects.

For example, the funds could support roads and water systems. They could also help improve sewage systems and coastal defenses.

In addition, the projects were meant to protect communities from climate threats.

Those threats include flooding and extreme heat.

As a result, the law would have created a large new source of funding for climate projects across New York.

Which Companies Did the Law Target?

The law focused on certain fossil fuel companies.

New York tied the program to companies that were responsible for at least 1 billion tons of greenhouse gas emissions during the covered period.

More specifically, the law based payments on past emissions.

That approach, however, became a major issue in the legal fight.

The companies argued that New York could not impose this type of liability through state law.

Why Did the Judge Block the Law?

The main issue was federal preemption.

Put simply, federal preemption means federal law can limit or override certain state laws.

Judge Sannes found that New York’s climate program was preempted by federal law.

In particular, the judge focused on the Clean Air Act. That law gives the federal government authority to regulate carbon dioxide emissions through the Environmental Protection Agency.

Sannes found that the Clean Air Act does not allow states to create their own emissions compensation programs like New York’s.

Furthermore, the court found that the law conflicts with the federal government’s foreign affairs power.

The Justice Department said the court therefore held the Climate Change Superfund Act invalid.

Why Federal Power Matters

The ruling is also about the balance between state and federal power.

At the same time, climate change affects more than one state. It also involves national and global policy.

Sannes said climate policy requires national standards and global participation.

She also pointed to energy production and economic growth.

Foreign policy and national security were additional concerns.

Therefore, the case is about more than New York’s $75 billion program.

Instead, it asks whether one state can create its own system for assigning financial responsibility for global greenhouse gas emissions.

How Would New York’s $75B Program Work?

The law was designed to collect $75 billion over 25 years.

That figure translates to about $3 billion per year.

New York planned to use the funds for climate adaptation.

In turn, the money could help pay for infrastructure projects across the state.

For instance, communities could use the funds for flood protection. The money could also support roads, water systems, sewage systems, and coastal projects.

The law covered greenhouse gas emissions from a historical period.

Originally, the program used emissions from 2000 through 2018. The state later amended the law, according to reporting on the litigation.

For energy companies, the program created a major potential financial cost.

Unlike many current regulatory fees, that cost was based on past emissions rather than only current operations.

Who Challenged the Law?

A group of 22 Republican state attorneys general challenged the law in February 2025.

In addition, several industry groups joined the legal fight.

The U.S. Chamber of Commerce was among the groups opposing the measure.

The challengers argued that New York had gone beyond its legal authority.

They also argued that the law could impose major costs on energy companies.

As a result, the dispute brought state governments, energy companies, and business groups into the same case.

The U.S. Department of Justice later supported the challenge.

DOJ Challenges Climate Law

The Trump administration’s Justice Department also challenged New York’s climate law.

According to the department, the law conflicts with federal law.

It also argued that the law conflicts with the federal foreign affairs power.

The Justice Department said the law sought to impose strict liability on domestic and foreign energy companies for their alleged role in global greenhouse gas emissions.

Beyond New York, the federal government has also challenged Vermont’s climate superfund law.

As a result, the legal fight may not end with the New York case.

New York Defends Its Climate Law

New York officials have defended the program.

From the state’s perspective, taxpayers should not carry the full cost of climate damage.

Gov. Kathy Hochul signed the law in December 2024.

After the ruling, Hochul’s office said it was reviewing the decision.

At the same time, the state is considering its next steps.

New York has argued that companies responsible for major emissions should help pay for climate protection.

However, the federal ruling prevents the state from enforcing the program for now.

Impact on Energy Companies

The decision removes a major potential cost for covered energy companies.

Under the New York law, companies could have faced large payments based on historical emissions.

For now, the court ruling blocks those payments under the state program.

More broadly, the decision may affect how energy companies respond to similar laws.

For example, companies may now pay closer attention to state climate liability proposals.

In turn, their lawyers will likely watch future cases for similar arguments about federal preemption.

Will the Ruling Affect Other Climate Laws?

The ruling could have a wider impact.

New York was the second state to create an industry-funded climate superfund.

Vermont was the first.

However, Vermont also faces a federal legal challenge over its climate law.

The Justice Department says both state laws raise similar questions about federal authority.

Consequently, lawyers may study the New York ruling as other climate cases move forward.

Likewise, state lawmakers may review the decision before creating similar programs.

Environmental groups and energy companies are likely to follow those developments closely.

Why It Matters to Environmental Lawyers

The case has several important lessons for environmental lawyers.

First, it shows the power of federal preemption.

Second, it highlights the limits of state climate policy.

Third, it connects environmental law with constitutional and federalism issues.

More broadly, the case shows how climate disputes can involve several areas of law.

These areas include environmental regulation, energy law, administrative law, and constitutional law.

For law students, the case offers a useful example of how those fields can overlap.

Meanwhile, corporate lawyers may need to track similar climate laws in other states.

What Happens Next?

New York is reviewing the ruling.

At this stage, the state could appeal the decision. However, officials have not announced their final plans.

For now, New York cannot enforce the $75 billion climate superfund program.

Meanwhile, the Vermont case remains another important legal test.

That case could help shape the future of state climate liability laws.

In the broader energy sector, the New York ruling gives energy companies a major victory.

At the same time, it creates a new legal roadblock for states seeking to make fossil fuel companies pay for climate-related costs.

Frequently Asked Questions

What is New York’s climate superfund law?

New York’s Climate Change Superfund Act is a 2024 law.

Under the measure, certain fossil fuel companies would help pay for climate adaptation projects.

The program was designed to collect $75 billion over 25 years.

How much money would the law have raised?

The law aimed to raise about $3 billion each year.

Initially, the payments were scheduled to begin in 2028.

Over 25 years, the total would have reached about $75 billion.

Why did the judge block New York’s climate law?

Judge Brenda Sannes found that federal law preempts the New York program.

Specifically, the judge focused on the Clean Air Act.

She found that the federal law does not allow states to create emissions compensation programs like New York’s.

In addition, the court found a conflict with the federal foreign affairs power.

Does the ruling ban all state climate laws?

No.

The ruling concerns New York’s specific Climate Change Superfund Act.

Therefore, it does not automatically invalidate every state climate program.

Other state climate laws may raise different legal issues.

Who challenged New York’s climate law?

Twenty-two Republican state attorneys general challenged the law.

In addition, industry groups joined the legal fight.

The U.S. Chamber of Commerce was among the groups opposing the measure.

Later, the Justice Department supported the challenge.

What would the $75 billion have funded?

New York planned to use the money for climate adaptation.

For example, projects could include roads, water systems, sewage systems, and coastal protection.

The goal was to help communities deal with climate-related risks.

Can New York appeal the ruling?

New York may appeal the decision.

At present, the governor’s office is reviewing the ruling and possible next steps.

If the state appeals, the case could move to a federal appeals court.

Is Vermont facing a similar lawsuit?

Yes.

Vermont also passed a climate superfund law.

However, the Justice Department has challenged that law in federal court.

As a result, the Vermont case could provide another important test of state climate liability.

Why is the case important for environmental law?

The case tests the limits of state power.

At the same time, it examines the relationship between state climate laws and federal environmental rules.

The ruling could influence future cases involving climate liability.

It may also affect how states write new climate laws.

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The post Judge Deals Blow to New York’s $75B Climate Law first appeared on JDJournal Blog.