Federal Judge Blocks New York From Enforcing $75 Billion Climate Superfund Law

A federal judge ruled on Monday that New York cannot enforce a 2024 state law that sought to impose an estimated $75 billion in charges on carbon-emitting companies for allegedly causing climate damage between 2000 and 2018.

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. The judge 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.

New York Gov. Kathy Hochul signed the Climate Change Superfund Act into law in December 2024. It required about three dozen covered fossil-fuel companies to pay a combined $3 billion annually for 25 years, or $75 billion in total. The funds would have been earmarked for infrastructure work, including coastal wetlands, stormwater systems, roads, bridges, and responses to extreme weather.

Sannes said enforcing the law risked upsetting the balance of protecting the environment, “a project that necessarily requires national standards and global participation,” and promoting economic growth, energy production, foreign policy interests, and national security.

West Virginia Attorney General John McCuskey led the coalition of states challenging the legislation in a February 2025 lawsuit. The attorneys general said at the time that New York’s law was politically motivated “overreach” that punished traditional energy companies, including West Virginia-based coal and natural gas 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.

“We were the first to challenge this law because we saw it for what it was – a money grab by the elites in New York, who want to punish West Virginians for doing the jobs that enable them to heat their homes and build their cities,” McCuskey said in an Aug. 31 statement.

Hochul’s office 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,” he said.

New York was the second U.S. state to establish a superfund requiring major fossil-fuel companies to help finance infrastructure projects such as flood mitigation and coastal protection.

The U.S. Chamber of Commerce and the American Petroleum Institute sued Vermont on Dec. 30 to block that state’s superfund. That case remains pending.

Principal Deputy Assistant Attorney General Adam Gustafson from the Justice Department’s Energy and Natural Resources Division welcomed Monday’s decision.

“New York’s law would have expropriated $75 billion from energy companies around the world during an energy emergency and in direct defiance of American foreign policy and federal law,” Gustafson said. “We will continue to fight for affordable, reliable energy for all Americans.”

Reuters contributed to this report.