• A federal judge blocked New York from enforcing its $75 billion Climate Change Superfund Act, finding it preempted by federal law.
• The law would have required major fossil fuel companies to contribute $3 billion annually from 2028 for climate-resilient infrastructure.
• The ruling could complicate similar state efforts to make historic emitters pay for climate damages, including Vermont’s contested superfund law.

Federal court blocks New York climate liability law

A federal judge has blocked New York from enforcing its $75 billion climate “superfund” law, delivering a major legal setback to state efforts to shift climate adaptation costs onto fossil fuel companies.

Chief U.S. District Judge Brenda Sannes ruled that New York’s Climate Change Superfund Act was preempted by federal law. The 2024 measure sought $75 billion from major fossil fuel companies over 25 years.

Sannes sided with 22 Republican state attorneys general and industry groups, including the U.S. Chamber of Commerce.

The judge found that the federal Clean Air Act gives the Environmental Protection Agency authority over carbon dioxide emissions. In her view, that framework does not allow states to establish separate compensation systems tied to emissions.

She also raised broader questions about whether individual states can impose financial liability for activity connected to global climate change.

Enforcing the law could interfere with the balance between addressing global warming and protecting other federal interests, including economic growth, energy production, foreign policy and national security, Sannes found.

“The Climate Act conflicts with the overriding need for a uniform rule of decision on matters influencing national energy and environmental policy, and basic interests of federalism,” she wrote.

$75 billion fund targeted historic emissions

New York Governor Kathy Hochul signed the Climate Change Superfund Act in December 2024.

The law required fossil fuel companies to contribute $3 billion annually beginning in 2028. Payments would have continued for 25 years.

Individual liabilities were based on companies’ greenhouse gas emissions between 2000 and 2018.

The measure applied to companies that New York’s Department of Environmental Conservation considered responsible for at least 1 billion tons of greenhouse gas emissions during that period.

Funds were intended to finance infrastructure protecting communities from worsening climate risks. Eligible projects included roads, water systems, sewage infrastructure and coastal resilience measures designed to address flooding and extreme heat.

For New York, the law represented an effort to apply a polluter-pays model to the mounting cost of climate adaptation.

The state is already exposed to significant physical climate risks, including coastal flooding, heat and extreme precipitation. Those pressures are increasingly affecting public infrastructure budgets and long-term capital planning.

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States clash over climate liability

The legal challenge reflected a broader political divide over who should bear the financial cost of climate damages.

West Virginia Attorney General JB McCuskey, who led the states opposing the measure, welcomed the ruling.

He called the law “a money grab by the elites in New York.”

The Republican attorneys general argued in their February 2025 lawsuit that New York had overreached by penalizing energy companies for historic activity that complied with applicable law.

They also warned that large financial liabilities could damage traditional energy producers and threaten thousands of jobs.

The U.S. Department of Justice under President Donald Trump filed a similar lawsuit and supported the Republican-led states in the case.

New York, meanwhile, maintains that taxpayers should not bear the entire cost of climate-related damage.

“Taxpayers shouldn’t have to foot the bill for damages caused by polluters,” said Ken Lovett, a spokesperson for Hochul.

Lovett said the governor’s office was reviewing the ruling and considering possible next steps.

Ruling raises stakes for state climate policy

The decision has implications beyond New York.

New York became the second US state to create an industry-financed climate superfund. Vermont adopted the first such law and is also facing legal challenges.

For companies and investors, the ruling highlights the legal uncertainty surrounding climate liability frameworks based on historic emissions.

States continue to face rising costs from climate adaptation, while federal and state governments remain divided over who should pay.

The New York case now adds another constraint to state-level climate policymaking. It also raises a larger governance question for the US: whether climate-related financial liability can be imposed state by state, or whether courts will require a nationally consistent framework for allocating those costs.