New York Judge Strikes Down State’s Climate Superfund Law

The courts have struck a decisive blow against superfund bills. Chief Judge Brenda Sannes of the U.S. District Court for the Northern District of New York ruled that the 2024 Climate Change Superfund Act that Governor Kathy Hochul signed was unconstitutional, violating the Supremacy Clause and the Clean Air Act. As other states consider their own version of a superfund bill, this ruling should serve as a cautionary tale.

In her ruling, Judge Sannes provided three main reasons why New York’s Climate Superfund Act was unconstitutional. Firstly, the Clean Air Act preempts the Climate Change Superfund Act. The Clean Air Act allows the U.S. Environmental Protection Agency to regulate greenhouse gas emissions at the interstate level, meaning that New York could not implement its own cap-and-trade emissions scheme. This flowed into the main philosophy behind the decision, which was that climate change is an international and interstate problem, meaning the federal government has the power and jurisdiction to create a unified response, a power the Climate Change Superfund Act would interfere with. Lastly, Judge Sannes made it clear that the federal government’s foreign affairs authority applied because the law could affect companies outside the United States. This is especially true given that an analysis by the New York Public Interest Research Group found that foreign companies such as Saudi Aramco, BP, TotalEnergies, and Shell would be subject to the Climate Change Superfund Act, an area in which New York State lacks jurisdiction.

This ruling has allowed New York consumers to avoid a potential increase in costs. Because of the nature of superfund liability, the costs would ultimately be borne by all taxpayers who benefited from fossil fuel consumption. This looks like an increase in energy costs, a tough pill to swallow in a state with the fourth-highest electricity prices in the United States. At a time when New York State is becoming more unaffordable, policymakers should find ways to reduce costs, not increase them.

These cost increases are not always immediate but can be reflected in the future. For example, after Hurricane Sandy, New York State established the FuelNY initiative to create a strategic fuel reserve for emergency deployment. However, making it more difficult for fuel suppliers to operate in the state makes it much harder to establish this strategic reserve. Thus, in the event of an emergency, fuel costs will increase further as the limited supply meets increased demand. Scaring away businesses from a state rarely has positive outcomes and the Climate Change Superfund Act was going to do that.

While the courts may have struck down the Climate Change Superfund Act, this is not the end. Governor Hochul is currently reviewing next steps, potentially opening the door for New York Attorney General Letitia James to appeal the decision. Still, this ruling bodes well for other lawsuits like the one launched by the Trump Administration against Vermont for its Climate Superfund law. For states considering their own version of a Climate Superfund Act, the case is a cautionary tale about the legal untenability of such legislation.