A federal judge has struck down New York’s ambitious plan to charge fossil fuel producers $75 billion to fund climate change repairs, citing conflicts with federal law and the need for a uniform national energy policy.
U.S. District Judge Brenda Sannes ruled Monday that the law, signed by Democratic Gov. Kathy Hochul in 2024, reached beyond the state's authority and encroached on an area of federal interest. The law had sought to create a fund for infrastructure projects aimed at repairing or avoiding future damage from climate change.
The legislation required companies responsible for significant greenhouse gas emissions to collectively pay $3 billion annually over 25 years into the fund. Lawmakers intended for the money to cover costs associated with extreme weather events and to support resiliency projects like coastal wetland restoration and upgrades to drainage systems.
The law faced a legal challenge from a coalition including fossil fuel interests, business associations like the U.S. Chamber of Commerce, 22 Republican state attorneys general, and the U.S. Environmental Protection Agency.
Judge Sannes determined that the state's climate law operated in a domain governed by federal law for over a century and aimed to recover damages for the cumulative impact of conduct that has occurred globally. This, she wrote, conflicts with the necessity of a consistent national energy and environmental policy. She also stated the law was not authorized by the federal Clean Air Act, which designates the EPA as the primary regulator of greenhouse gas emissions.
Furthermore, Sannes noted that attempting to collect damages from foreign fossil fuel producers is unconstitutional, preempted by foreign affairs doctrine.
Climate activists have encouraged the Hochul administration to appeal the decision. A spokesperson for the governor's office stated that "taxpayers shouldn’t have to foot the bill for damages caused by polluters" and that the administration is reviewing the ruling to determine its next steps.
This ruling echoes past federal opposition to similar state-level climate initiatives. The administration of President Donald Trump previously challenged laws in Michigan, Hawaii, and Vermont with similar aims, with the Department of Justice asserting it was "delivering on President Trump’s order to protect American energy from state overreach."
Adam Gustafson, a principal deputy assistant attorney general, stated that 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."