By Nate Raymond and Jonathan Stempel
NEW YORK, Aug 31 (Reuters) – A federal judge ruled on Monday that New York cannot enforce a 2024 state law that sought to force fossil fuel companies to contribute $75 billion over 25 years into a fund to pay for damage caused by climate change.
Chief U.S. District Judge Brenda Sannes in Syracuse, New York sided with 22 Republican state attorneys general, as well as industry groups including the U.S. Chamber of Commerce, in finding the state measure preempted by federal law.
Sannes, an appointee of Democratic President Barack Obama, said the Clean Air Act, which gave the federal Environmental Protection Agency authority to regulate carbon-dioxide emissions, did not authorize states to adopt emissions compensation schemes such as New York’s.
She said enforcing New York’s Climate Change Superfund Act risked upsetting the balance between preventing global warming, “a project that necessarily requires national standards and global participation,” and promoting economic growth, energy production, foreign policy interests and national security.
“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.
West Virginia Attorney General JB McCuskey, a Republican who led the states’ opposition, in a statement hailed the decision, calling the state law “a money grab by the elites in New York.”
The office of New York Governor Kathy Hochul, a Democrat who signed the state law in December 2024, is reviewing the decision to determine possible next steps, spokesperson Ken Lovett said.
“Taxpayers shouldn’t have to foot the bill for damages caused by polluters,” Lovett said.
New York was the second U.S. state to create an industry-financed “superfund” to address climate change. Vermont was the first state, and its law also faces legal challenges.
The New York law required fossil fuel companies to contribute $3 billion annually to the superfund starting in 2028, divided based on their greenhouse gas emissions between 2000 and 2018.
The law applied to companies that the state’s Department of Environmental Conservation considered responsible for 1 billion tons of greenhouse gas emissions during that period. Money would have gone to build roads, water systems, sewage systems and other infrastructure to protect communities and coastlines from weather events such as extreme heat and flooding.
In their February 2025 lawsuit, the Republican attorneys general called New York’s law a politically motivated “overreach,” which punished traditional energy companies that now comply with applicable laws. They said payouts from coal, oil and natural gas producers could wipe out thousands of jobs if the producers were forced to shut down.
The U.S. Department of Justice under Republican President Donald Trump had filed a similar lawsuit last year and supported the state attorneys general in the case before Sannes.
(Reporting by Nate Raymond in Boston and Jonathan Stempel in New York; Editing by David Gregorio)
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