A federal judge struck down New York’s Climate Change Superfund Act on Monday, dealing a significant blow to state-level climate accountability legislation, ruling that the 2024 state law requiring fossil fuel companies to pay an estimated $75 billion in climate damages was preempted by federal law and could not be enforced.
Chief U.S. District Judge Brenda Sannes in Syracuse sided with a coalition of 22 Republican state attorneys general and industry groups including the U.S. Chamber of Commerce, finding that the Clean Air Act gave the federal Environmental Protection Agency exclusive authority to regulate carbon dioxide emissions and did not authorize states to create their own emissions compensation schemes.
Sannes said enforcing the law risked upsetting the balance between environmental protection, which she described as requiring national standards and global participation, and the competing interests of economic growth, energy production, foreign policy and national security.
New York Governor Kathy Hochul signed the Climate Change Superfund Act into law in December 2024. It required approximately three dozen covered fossil fuel companies to pay a combined $3 billion per year for 25 years, totaling $75 billion, with the funds earmarked for infrastructure including coastal wetlands, stormwater systems, roads, bridges and extreme weather response.
The challenge
West Virginia Attorney General John McCuskey led the coalition of states that filed suit in February 2025. The attorneys general argued that New York’s law was politically motivated and punished traditional energy companies that comply with all applicable laws. They said the payments required from coal, oil and natural gas producers could eliminate thousands of jobs if producers were forced to curtail operations.
McCuskey said in a statement Monday that West Virginia was the first to challenge the law and that his office saw it as an attempt by officials in New York to punish West Virginians for doing the jobs that enable people in New York to heat their homes and build their cities.
The legal issue
The climate preemption case turns on a doctrine called federal preemption, which holds that where Congress has authorized federal agencies to regulate a particular area, states cannot enact conflicting or duplicative regulation in the same space. The Clean Air Act is one of the most significant exercises of that preemption authority in American environmental law, and courts have repeatedly addressed questions about the boundary between what states can regulate independently and what the Clean Air Act reserves to the EPA.
New York’s law attempted to hold fossil fuel companies retroactively liable for climate-related damages that occurred between 2000 and 2018. The retroactive scope was one element of the challenge, though Sannes’s ruling focused primarily on whether states can impose compensation regimes for emissions that federal law already governs.
What comes next
The ruling is a significant loss for states and localities pursuing legal strategies to recover climate-related costs from fossil fuel companies. New York is likely to appeal. The ruling at the district court level does not resolve the ultimate legal question, which will almost certainly require appellate review before a final answer is reached.
Other states have enacted or considered similar legislation, and the preemption question Judge Sannes resolved for New York’s law may apply differently to laws structured in other ways.
