The Justice Department and the state of Vermont faced off in a federal courtroom on Monday over the state’s landmark 2024 “climate superfund” law, which will require fossil fuel companies to pay for the mounting costs of climate change.
The Trump administration sued last year to block the law, arguing it was unconstitutional. That position is supported by the U.S. Chamber of Commerce and the American Petroleum Institute, which have filed their own lawsuit against Vermont.
Vermont’s law takes its name from the federal Superfund program, created in the 1980s by requiring polluters to help pay to clean up land, such as old industrial sites, that has been contaminated with hazardous materials.
The Justice Department contends that the climate superfund laws and lawsuits are unlawful attempts to regulate emissions that cross state lines, which it maintains is the job of the federal government, not individual states.
Jonathan Rose, who represented Vermont at the hearing, began by striking at the heart of that argument. “We don’t need to convince the court that climate change presents serious challenges to the state of Vermont,” Mr. Rose said. “The act is intended to recover some of the costs it’s going to need to adapt to climate change,” he said. “What it doesn’t do is, it doesn’t try to mitigate climate change, stop climate change or otherwise impact global emissions or anything like that.”
Riley Walters, representing the Justice Department, disputed that point.
“This case is not about Vermont’s ability to raise revenue or protect the health and welfare of its residents,” he said. “It’s about Vermont’s attempt to subject global energy production and activity to Vermont law, which brazenly disregards the constitutional division of power in the federal government and the states.”
An array of allies have lined up on either side of the case. Two dozen states have joined on behalf of the Chamber of Commerce, led by Attorney General John B. McCuskey of West Virginia. Two environmental groups, the Northeast Organic Farming Association of Vermont and the Conservation Law Foundation, are siding with the state.
Over the daylong hearing before Judge Mary Kay Lanthier, two key themes emerged: first, how to differentiate the Vermont law from the proliferation of unrelated climate lawsuits that have been filed by many state and local governments; and second, whether the Vermont law amounts to an effort to regulate greenhouse gas emissions.
The climate lawsuits and the climate superfund laws both rest on the same premise: that the polluter should pay for past contributions to the greenhouse gas emissions. But they differ in strategy.
Three dozen lawsuits have been filed by state and local governments against oil companies over the past decade, seeking monetary damages for costs that municipalities are incurring because of climate change. Many argue that the companies covered up what they knew about the dangers of climate change, committing consumer fraud.
The Supreme Court is poised to take up the issue of whether federal law bars such claims. That case was brought by Boulder, Colo., against Exxon Mobil and Suncor, a Canadian energy giant. Oral arguments are expected in the fall. (On Monday, the judge in the Vermont case asked the parties for input on how the Supreme Court case might affect them.)
The climate superfund laws are a relatively recent phenomenon.
Vermont was the first state to pass such a law, in 2024. New York is the only other state to have done so since then, and is also facing a lawsuit filed by the Trump administration. But the idea is gaining momentum across the country, with a number of other state legislatures advancing similar measures.
The Vermont law directs the state treasurer to develop an estimate of what costs from climate change the state has borne over the past 30 years. That estimate is due next year. Then a state agency would identify responsible parties with some connection to Vermont and issue “cost recovery demands.”
New York’s law works a little differently. It is designed to recover $75 billion over 25 years from the world’s largest fossil fuel companies.
Much of the discussion before Judge Lanthier centered on an earlier climate lawsuit filed by New York City against Chevron. That suit was ultimately thrown out, a decision upheld by an appeals court in 2021, on the basis that federal law precluded the city’s lawsuit.
The Justice Department and its allies said that decision demonstrated why Judge Lanthier should block the Vermont law. Countering that argument, lawyers for Vermont and the environmental groups said the Justice Department was adopting an overly broad reading of the decision.
Those were just some of many thorny legal questions the judge was wrestling with. Another was whether the Environmental Protection Agency’s recent move to revoke the “endangerment finding,” which gave it the power to regulate greenhouse gases, would affect the case. The Justice Department contends it will not, while Vermont disagrees.
Karen Zraick covers legal affairs for the Climate desk and the courtroom clashes playing out over climate and environmental policy.
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