Several states have enacted, or are actively considering, so-called climate “superfund” laws that would require companies responsible for greenhouse gas emissions over the past few decades to fund climate-adaptive infrastructure projects. The Trump administration has filed at least four lawsuits challenging these programs as well as other state efforts to pursue corporations alleged to have contributed to greenhouse gas emissions. This post briefly examines the State Climate Superfund laws enacted in Vermont and New York, then touches on some of the percolating legal issues likely to arise as the federal government’s challenges to these laws move through the courts.
New York imposes strict retroactive liability and monetary penalties on businesses that extracted or refined fossil fuels in order to fund climate change adaptive infrastructure projects. This law applies to any company that “was engaged in the trade or business of extracting fossil fuel or refining crude oil and is . . . responsible for more than one billion tons of covered greenhouse gas emissions” worldwide from 2000 to 2024. N.Y. Envtl. Conserv. Law § 76-0101(8), (9), (21). New York will target all companies—worldwide—responsible for more than one billion metric tons of emissions and assign each of those companies a share of liability equal to their proportion of emissions as between all companies that exceed the one-billion-ton threshold. Id. § 76-0103(3)(c)-(d).
Funds recovered will be allocated towards climate change adaptation and resilience projects. The Climate Superfund law requires New York to identify adaptation needs across broad array of industries, identify major potential climate change adaptive infrastructure projects and potential funding sources, and consult with stakeholders across the state to determine the breadth and scope of required adaptive infrastructure projects.
Vermont’s similar Superfund law goes even further, subjecting even foreign nations that hold or held ownership interests in fossil fuel businesses from 1995 through 2024 to strict liability. VT. Stat. Ann. Tit. 10, § 596(10).
The federal government has sued to stop both the laws themselves and prevent states from suing fossil fuel companies under their state climate cleanup laws. These lawsuits are based upon President Trump’s declaration of an energy emergency, based on the “unusual and extraordinary threat” that “insufficient energy production, transportation, refining, and generation” poses to the United States’ “economy, national security, and foreign policy.” Declaring a National Energy Emergency, Exec. Order 14156, § 1, 90 Fed. Reg. 8433 (Jan 20. 2025). Through these lawsuits, the federal government contends that state-level climate superfund laws are pre-empted by the Clean Air Act because greenhouse gasses are an “air pollutant” under the CAA. See Massachusetts v. EPA, 549 U.S. 497 (2007). In a similar vein, state efforts to hold fossil fuel companies liable are purportedly subject to “foreign affairs preemption” given the federal government’s supremacy in managing foreign affairs. The statutes also allegedly regulate extraterritorial conduct in violation of the Fourteenth Amendment Due Process Clause. Finally, the federal government claims that these statutes violate the Dormant and Foreign Commerce Clauses by discriminating against fossil fuel extracting and refining that primarily occurs in other states.
While these lawsuits are pending, EPA recently proposed a rule that would “repeal all ‘greenhouse gas’ emission standards for the power sector under Section 111 of the Clean Air Act.” This proposed rule repudiates the Biden administration’s attempts to revive the Clean Power Plan following the Supreme Court’s invalidation of the Obama administration’s 2015 proposal in West Virginia v. EPA. EPA’s press release announcing that proposal expressly notes the U.S. Supreme Court’s rejection of the Obama administration’s 2015 Clean Power Plan in West Virginia v. EPA. Under EPA’s proposed rule, EPA would be required to make a finding that certain emissions from fossil fuel-based power plants “significantly contribute to dangerous air pollution” before regulating their emissions.
The Supreme Court’s decision in West Virginia v. EPA was based on the Major Questions Doctrine, with the Court concluding that Congress had not expressly conferred authority for EPA to dictate how much coal-based electricity generation should occur over the coming decades. 597 U.S. at 729. If the CAA does not empower EPA to regulate greenhouse gas emissions, then the question of whether it serves as a roadblock to state climate superfund laws (and litigation) becomes more complicated. This is particularly true given the Supreme Court’s invocation of the Major Questions Doctrine, which simultaneously recognizes the “economic and political significance” of greenhouse gas regulations while holding that Congress has not delegated the authority to regulate them.
States’ efforts to take the reins on climate action beg several questions about federalism and the future of the Clean Air Act. State (non-climate) Superfund laws are not preempted by CERCLA. Are there key similarities or differences that foreshadow the fate of state climate superfund laws? Are there other analogues that might provide insight into how federal courts assessing questions of preemption might rule in the shadow of the nascent Major Questions Doctrine?
Our next article will compare states’ climate superfund laws to the CERCLA context, examining how courts’ permissive approach towards state superfund laws may compare to the climate context. Stay tuned!
Contact
This article was written by attorney Luke Dodge. For questions pertaining to climate superfund laws, please contact Luke at ldodge@lssh-law.com.