A second federal judge in New York has ruled that the state’s new climate “superfund” law is unconstitutional, dealing a blow to the nascent effort to popularize such measures around the country.
The groundbreaking law would require fossil fuel companies to pay billions of dollars to cover the costs of climate change. A handful of other states are considering similar laws, which the energy industry and Republican states have vigorously opposed.
Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York ruled on Wednesday that the law was pre-empted by the federal Clean Air Act and on the grounds that it interfered with foreign affairs.
The decision on Wednesday came from a challenge by the Justice Department and the Environmental Protection Agency. It followed a similar ruling last month by a judge in the federal court for the Northern District of New York in a parallel case brought by a coalition of Republican-led states and business groups.
Vermont and New York are the only states to have passed climate superfund laws, but they have been proposed in several other states. A legal challenge to Vermont’s law is also pending. The plaintiffs in the cases have argued that the laws illegally encroach on the role of the federal government and its ability to balance environmental, energy and economic considerations.
The New York law identified companies it considered responsible for more than a billion metric tons of greenhouse gas emissions since the year 2000 as those who would be required to pay. The state had argued that the superfund law did not regulate greenhouse gas emissions, but rather addressed the harms from past emissions. Enacted in 2024, it would require fossil fuel companies to pay $75 billion over 25 years into a special fund for infrastructure projects to mitigate the effects of global warming in the state.
The concept of the law was modeled after the federal 1980 Superfund statute, which required polluters to pay to clean up abandoned toxic waste sites.
“True, the Climate Act does not set a numerical standard for future emissions, but it does impose liability on entities whose historical emissions exceeded a 24-year aggregate standard, retroactively imposed,” Judge Castel wrote in his decision.
The ruling blocked the state from enforcing the law. The governor’s office did not immediately respond to a request for comment.
Both rulings on the New York law relied heavily on a 2021 decision by the Second Circuit Court of Appeals dismissing a lawsuit by New York City against oil companies that argued that the companies should pay for the damage caused by climate change.
The “polluter pays” principle is central to both the climate superfund laws and a batch of some three dozen lawsuits by state and local governments against oil companies over their role in climate change. This week, a judge in Michigan dismissed one of those lawsuits, which had been based on federal antitrust claims.
The Justice Department on Wednesday pointed to the Michigan decision as a bellwether.
“We are pleased that the district court has rejected another aggressively anti-energy lawsuit, and we are committed to protecting American energy from this sort of state overreach,” said Adam Gustafson, principal deputy assistant attorney general for the Justice Department’s Energy and Natural Resources Division.
The Supreme Court is scheduled to hear arguments on Oct. 5 in another climate case, brought by Boulder, Colo., against Exxon Mobil and Suncor Energy. The Justice Department is expected to argue in support of the companies at that hearing. The central question before the Supreme Court justices is whether that case is blocked by federal la w.
At the same time, energy industry allies have mounted an effort to push federal and state-level immunity bills that would protect oil companies from liability over their role in climate change. Several states passed such laws this year, and federal bills have been introduced in the House and Senate.
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