Second Federal Judge Strikes Down New York's $75 Billion Climate Superfund Law
Judge P. Kevin Castel ruled the Clean Air Act preempts the law, which would have made fossil fuel companies pay for climate damage. It is the Justice Department's second win against the law this month.
A second federal judge has struck down New York's Climate Change Superfund Act, the law that would have made fossil fuel companies pay up to $75 billion for damage caused by climate change.
In a 35-page ruling Thursday, U.S. District Judge P. Kevin Castel of the Southern District of New York granted the Justice Department summary judgment, declared the law unconstitutional and permanently blocked the state from enforcing it. Castel found that the federal government "has standing" to argue the law "impinges on its sovereign authority to create laws relating to the emission of greenhouse gases and to enforce those laws against violators and to declare and promote its interests in foreign affairs."
"The court also concludes that the United States has demonstrated that New York's Climate Act intrudes upon these interests and is therefore preempted," Castel wrote.
It is the second time this month the law has been struck down. Earlier in September, U.S. District Judge Brenda Sannes of the Northern District of New York sided with a coalition of 22 Republican attorneys general and industry groups. She ruled the act was preempted by the federal Clean Air Act and by Washington's power over foreign affairs, and held it invalid. The Justice Department had backed that suit and argued in court for the plaintiffs.
New York passed the Climate Change Superfund Act in 2024. Modeled on the federal Superfund program for toxic waste cleanup, it would have charged the largest oil, gas and coal companies, many of them foreign, for their share of historic greenhouse gas emissions. The money was meant to pay for infrastructure to protect the state from flooding, heat and storms. Vermont passed a similar law, which the Justice Department is also challenging in federal court.
The Trump administration praised the decision. The Justice Department has said the suits carry out President Donald Trump's executive order on "Protecting American Energy from State Overreach," which directed the attorney general to stop state laws that burden domestic energy production. After the first ruling, Adam Gustafson, the principal deputy assistant attorney general for the environment division, said New York's law "would have expropriated $75 billion from energy companies around the world during an energy emergency."
The office of New York Attorney General Letitia James had not commented on Thursday's ruling, and it was not clear whether the state would appeal. An appeal would go to the Second Circuit, which covers both New York and Vermont.
The rulings are a blow to a strategy climate advocates had pushed in several states. Supporters argue that the companies that profited from fossil fuels should share the cost of adapting to a warming climate. Opponents, including the Justice Department, have called the law a "transparent monetary-extraction scheme" that would raise energy prices. New Yorkers already pay some of the highest electricity rates in the country.
