Federal judge strikes down New York's $75B climate 'Superfund'

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(The Center Square) — A federal judge has dealt a blow to New York's environmental goals by invalidating a key provision of a new law that punishes fossil fuel companies for their alleged role in climate change.

The ruling by U.S. District Court Judge Brenda Sannes, issued Monday, hobbled New York's Superfund law by declaring that the federal Clean Air Act preempts a provision requiring fossil fuel companies to pay up to $75 billion into a state fund. Sannes also ruled that federal law prevents New York from collecting money from foreign oil producers, making the new state law unenforceable. 

The decision stems from a lawsuit filed by 22 Republican attorneys general who argued that New York's law will do little to blunt the impact of climate change while passing on the costs to the state's consumers in the form of higher energy bills. 

West Virginia Attorney General JB McCuskey called the ruling "a major victory in the fight against liberal states, trying to balance their budgets on the backs of our hard-working men and women in the coal, oil and gas industries.”

The DOJ filed similar lawsuits against New York and Vermont last year, arguing that state laws requiring oil companies to contribute billions of dollars into funds to pay for damage caused by climate change were unconstitutional.

DOJ officials praised Monday's ruling, saying the court fight is part of a broader effort to "stop the enforcement of state laws that unreasonably burden domestic energy development" and reduce energy costs. 

"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," Adam Gustafson, an Assistant Attorney General with the DOJ's Energy and Natural Resources Division, said in a statement. "We will continue to fight for affordable, reliable energy for all Americans." 

The U.S. Chamber of Commerce, which intervened in the case, said the court "sent a clear message: New York cannot extract billions of dollars from energy companies for their lawful operations over the past 25 years." 

New York Attorney General Letitia James’s office hasn't commented about the judge's ruling. It's not clear whether the AG will appeal the decision. 

New York's Climate Leadership and Community Protection Act, signed by then-Gov. In 2019, Andrew Cuomo required the state to reduce its excess greenhouse gas emissions and authorized it to seek up to $75 billion in "damages" from fossil fuel companies. 

The legal challenge against New York alleges that the state's "superfund" law is a "transparent monetary-extraction scheme" designed to fund the state's infrastructure projects with money from out-of-state businesses.

President Donald Trump signed an executive order shortly after taking office last January, declaring a national energy "emergency" to speed up permitting of energy projects, roll back environmental protections, and withdraw from an international pact to fight climate change. DOJ lawyers allege in the lawsuits that the state climate change laws "imperil" domestic energy production.

As the court fight has played out, Gov. Kathy Hochul has called for a delay in implementing the new law, citing the impact on energy consumers from spikes in utility and gas bills. She has warned that the aggressive goals in the landmark climate law could cost the average New Yorker up to $3,500 per year, and that emissions reduction mandates are "unrealistic" given the Trump administration’s efforts to end support for clean energy projects.