We previously reported on New York State’s enactment of the Climate Change Superfund Act (the “Climate Superfund Act” or the “Act”), groundbreaking legislation that seeks to recover $75 billion from fossil fuel producers for their past greenhouse gas emissions and to use recovered funds for climate adaptation projects. We also discussed the legal challenges to Vermont’s Climate Superfund Act, the first climate superfund law in the U.S., and renewed efforts to pass comparable legislation in California in the aftermath of the tragic Los Angeles wildfires. Since then, there have been significant developments related to New York’s Climate Superfund Act.
On February 6, 2025, a coalition of 22 states and four industry groups filed a lawsuit in federal court challenging New York’s Climate Superfund Act as unconstitutional and preempted by federal law. The lawsuit, which seeks an injunction prohibiting New York from enforcing the law, echoes many of the arguments raised by the U.S. Chamber of Commerce and the American Petroleum Institute (“API”) in their suit against Vermont's law, which was filed in December 2024. The plaintiffs contend that New York’s law violates the principles of cooperative federalism, the Supremacy Clause, the Due Process Clause, the Commerce Clause, the Eighth Amendment, and the Takings Clause of the U.S. Constitution.
On February 28, 2025, New York Governor Kathy Hochul signed an amendment to the Climate Superfund Act, which tweaks several key provisions of the law. The amended Act:
- Extends the covered emissions period from 2000-2018 to 2000-2024;
- Amends certain definitions, including narrowing the definition of “covered greenhouse gas emissions” to only include emissions attributable to fossil fuel extraction and refining, as opposed to all emissions throughout the supply chain;
- Substantially modifies the option for responsible parties to pay their cost recovery demands in annual installments over 25 years;
- Removes the liability provision for minority interest holders, which previously made the law applicable to entities holding a “minority interest” greater than 10% in a responsible entity;
- Authorizes the New York State Department of Environmental Conservation (the “Department”) to require entities to provide certain historical information about their past practices to enable the Department to determine their liability;
- Establishes a process whereby responsible parties may file a request for reconsideration of its cost recovery demand with the Department; and
- Gives the Department more time to promulgate final regulations (by June 2027 as opposed to December 2026).
The same day that these amendments were signed into law, another group of plaintiffs, including the U.S. Chamber of Commerce and API, filed another lawsuit in a different federal court, alleging the same causes of action as the February 6 lawsuit. The outcome of the various pending lawsuits against New York and Vermont’s respective climate superfund legislation will have a major impact on the viability and enforceability of similar legislation in other states.
We will continue to monitor developments in the national landscape and will provide pertinent updates.
