Federal Judge Strikes Down New York's $75 Billion Climate Superfund Law

A federal judge has killed New York's plan to bill oil, gas and coal companies $75 billion for causing climate change.

Chief U.S. District Judge Brenda Sannes of the Northern District of New York ruled Monday, Aug. 31, 2026, that the state's Climate Change Superfund Act cannot be enforced. Her reasoning: it steps on ground the federal government already owns.

"The Climate Act is 'simply beyond the limits of state law,'" Sannes wrote, according to Newsday and CT Mirror. "It is precisely because the Climate Act operates within an area of law 'in which the federal interest is so dominant' that it cannot be enforced."

What the Law Tried to Do

Gov. Kathy Hochul signed the Climate Change Superfund Act in December 2024. It targeted roughly three dozen fossil-fuel companies deemed responsible for over a billion tons of emissions between 2000 and 2018, according to ZeroHedge and Tri-State Infrastructure News Network. The bill would have collected about $3 billion a year for 25 years, adding up to $75 billion, to fund coastal wetlands work, stormwater systems, roads, bridges and other climate-adaptation infrastructure.

When she signed it, Hochul said the goal was to "put the responsibility on polluting entities to pay for the damages they have knowingly caused, so that everyday New Yorkers are not left with the bill," according to Newsday. State Assemblyman Jeffrey Dinowitz, a co-sponsor, told Inside Climate News fossil fuel companies "knew the damage they were causing" and "didn't do anything about it."

New York says it faces more than $500 billion in projected costs to prepare for hurricanes, flooding and extreme heat, according to Inside Climate News, and lawmakers wanted companies that profited from fossil fuels to shoulder some of that bill instead of taxpayers.

Why the Judge Said No

Vermont passed a similar law first. New York followed in December 2024. Twenty-two Republican state attorneys general, led by West Virginia's John "JB" McCuskey, sued in February 2025, joined by the American Petroleum Institute and the U.S. Chamber of Commerce. President Trump's administration also weighed in against the New York law, according to Newsday.

Sannes leaned heavily on a 2021 Second Circuit ruling that rejected New York City's own climate lawsuit against oil companies, finding federal law limits cities' and states' authority to regulate emissions through the courts. New York argued its law was different because the legislature created the liability scheme, and because it sought compensation for past emissions rather than dictating future behavior.

Sannes rejected that distinction outright. "It makes no difference that the obligation to pay compensation stems from a past harm," she wrote, because the underlying activity, domestic greenhouse gas emissions, is "potentially subject to the exclusive federal regulatory scheme," according to EID Climate, a project of the Independent Petroleum Association of America that has tracked and opposed these lawsuits. She also found the law intruded on the federal government's foreign affairs power, since it could have reached emissions from fuel produced or refined overseas.

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," per CT Mirror and Newsday.

The Legal Fight Isn't Over

State Sen. Liz Krueger, D-Manhattan, who shepherded the bill through Albany, predicted the ruling gets overturned. "I have always said that there would be many rounds of legal wrangling before the Climate Change Superfund could begin to provide relief for New Yorkers," she said, according to Newsday.

Ken Lovett, Hochul's senior communications adviser on energy and environment, said "taxpayers shouldn't have to foot the bill for damages caused by polluters" and confirmed the state is reviewing the decision, per Inside Climate News. Attorney General Letitia James, who would decide whether to appeal to the Second Circuit, has not publicly announced a next step. Cassidy DiPaola of the advocacy group Make Polluters Pay urged James to appeal, telling CT Mirror the ruling "doesn't bind other states or stop them from passing their own laws."

A district court ruling in one case doesn't automatically kill similar bills elsewhere. But it's also true that at least a dozen other states have proposed comparable superfund bills this year, and none has advanced, according to CT Mirror, which reported legislators were likely waiting to see how the New York and Vermont cases played out first.

Vermont's own climate superfund law faces a still-pending challenge in federal court. Whatever happens there, and whatever New York decides on appeal, will tell other statehouses whether this entire legislative strategy has a future or whether the Clean Air Act simply forecloses it. For now, New York's $75 billion fund exists only on paper.