New York Democrats’ scheme to extract a staggering $75 billion from energy producers has been struck down by a federal judge.
Chief U.S. District Judge Brenda K. Sannes, an Obama appointee, ruled that New York’s so-called Climate Change Superfund Act was preempted by federal law and could not be enforced.
The sweeping law, signed by Democrat Governor Kathy Hochul in December 2024, sought to force oil, natural gas, and coal companies to pay $3 billion annually for 25 years into a state-controlled climate fund.
“With nearly every record rainfall, heatwave, and coastal storm, New Yorkers are increasingly burdened with billions of dollars in health, safety, and environmental consequences due to polluters that have historically harmed our environment,” Governor Hochul said.
“Establishing the Climate Superfund is the latest example of my administration taking action to hold polluters responsible for the damage done to our environment and requiring major investments in infrastructure and other projects critical to protecting our communities and economy,” she added.
Under the law, companies determined by New York regulators to be responsible for more than one billion tons of greenhouse-gas emissions between 2000 and 2024 would have faced strict liability, regardless of whether they violated any law.
The scheme was not limited to activity inside New York. It attempted to calculate emissions connected to fossil-fuel extraction and refining around the world and then send massive “cost recovery demands” to the targeted companies.
In her 63-page ruling, Sannes described the Climate Change Superfund Act as an “unusual and sweeping” statute that ventured into an area governed by federal law for more than a century.
The judge concluded that the law conflicted with the Clean Air Act and the federal government’s exclusive authority over interstate pollution.
“The Clean Air Act does not ‘authorize’ the Climate Act,” Sannes wrote, concluding that Hochul’s law was “simply beyond the limits of state law.”
The court also ruled that New York’s attempt to impose financial liability on foreign energy producers intruded upon the federal government’s exclusive control over foreign affairs.
The case, West Virginia v. James, was brought by a 22-state coalition led by West Virginia, along with energy-industry plaintiffs. A separate lawsuit filed by the U.S. Chamber of Commerce, the American Petroleum Institute, the National Mining Association, and the Business Council of New York State was later consolidated with the states’ case.
The Trump Justice Department filed a statement of interest supporting the challengers and presented oral arguments against New York’s law.
“The court held that federal law preempts New York’s attempt to regulate global environmental concerns,” Associate Attorney General Stanley Woodward said in a Justice Department statement.
Principal Deputy Assistant Attorney General Adam Gustafson said Hochul’s law would have “expropriated $75 billion” from domestic and foreign energy companies while the United States was confronting an energy emergency.
President Trump previously directed the Justice Department to challenge state laws that unreasonably burden American energy production through Executive Order 14260.
The ruling represents a massive victory for energy-producing states whose workers and businesses would have been forced to bankroll Albany’s radical climate agenda.
West Virginia Attorney General JB McCuskey celebrated the decision, calling Hochul’s law a naked cash grab targeting Americans who produce the energy New York consumes every day.
“This is 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,” McCuskey said in a statement announcing the ruling.
“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. West Virginians can’t afford more liberal policies that jack up electricity and transportation costs. Thankfully, New York politicians can’t put their hands in West Virginia families’ pocketbooks now,” he added.
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