State Climate Superfund Laws Head to Court

Despite rollbacks by EPA, New York and Vermont are pressing ahead to expand their climate programs by enacting “Climate Superfund Acts.” Legislatures in California, Maryland, Massachusetts, and Oregon are currently considering similar legislation. State Superfund Climate Acts impose liability on the fossil fuel industry to address carbon pollution, and do so retroactively, like more traditional cleanup laws. Legal challenges are pending in federal court, sometimes based on the same arguments made after Congress enacted CERCLA, some 45 years ago. Whether those challenges succeed or fail feels to some long-time practitioners like “déjà vu all over again,” but this time around, there are a number of new twists.

        I. New York and Vermont Climate Superfund Laws

New York Governor Hochul signed New York’s Climate Superfund Law on December 27, 2024, making New York only the second state, after Vermont, to enact a law enabling the state to seek “cost recovery” from oil and gas producers for damages caused by greenhouse emissions. Like its counterpart in Vermont, New York’s Climate Superfund Law authorizes the State’s Department of Environmental Conservation (“DEC”) to seek cost recovery from the fossil fuel industry for climate damage, in order to fund “Climate Change Adaptive Infrastructure Projects” such as coastal wetlands restoration, upgrades to storm water drainage systems, and installation of energy efficient cooling systems in public and private buildings.

Both states’ laws are retroactive and seek damages reaching back many years. New York’s law hopes to recover up to $75 billion from fossil fuel producers for damages to the State that occurred from 2000 to 2018.[1] Liability is not joint and several.  Rather, the law requires DEC to develop an allocation of damages among the fossil fuel entities, and issue “Cost Recovery Demands” which “shall be equal to an amount that bears the same ratio to [$75 billion] as the responsible party’s applicable share of covered greenhouse gas emissions bears to the aggregate applicable share of covered greenhouse gas emissions of all responsible parties.”[2] The statute provides a formula under which DEC will calculate the carbon dioxide released by each responsible party based on the amount of coal, refined crude oil or fuel gases attributable to the party:

• Coal: 942.5 metric tons of carbon dioxide for every 1 million pounds of coal attributable to each coal producer.
• Oil: 432,180 metric tons of carbon dioxide for every 1 million barrels of crude oil attributable to each oil entity.
• Fuel gas:[3] 53,440 metric tons of carbon dioxide for every 1 million cubic feet of fuel gases attributable to each fuel gas party.[4]

While New York’s act only covers an 18-year period, Vermont’s law covers a thirty-year period that began on January 1, 1995 and ended on December 31, 2024.[5] The Vermont law also does not limit the total amount of damages that it seeks from fossil fuel manufacturers, but rather directs Vermont’s State Treasurer to develop an assessment of the cost to the State of Vermont and its residents of the emission of covered greenhouse gases during the 1995-2024 time period by January 15, 2026.[6] Like the New York law, the Vermont Climate Superfund is not joint and several. Once Vermont has determined the total amount of damages to the State, it will seek cost recovery from fossil fuel manufacturers in an amount “equal to an amount that bears the same ratio to the cost to the State of Vermont and its residents . . . from the emission of covered greenhouse gases during the covered period as the responsible party’s applicable share of covered greenhouse gas emissions bears to the aggregate applicable shares of covered greenhouse gas emissions resulting from the use of fossil fuels extracted or refined during the covered period.”[7]

        II. Legal Challenges

New York’s Climate Superfund Law has been challenged in federal court by twenty-two   “red state” attorneys general in a lawsuit filed on February 6, 2025, in the United States District Court for the Northern District of New York. West Virginia’s attorney general is leading the effort. The states opposing New York’s law argue that New York’s Climate Superfund Law is preempted by the federal Clean Air Act.[8] The states challenging the law claim that the law interferes with their sovereign interests as states, will cause significant loss of tax revenue in their states, and will “upend vast swathes of Plaintiffs States’ economies.”[9] They liken the law to an “extraterritorial shakedown” that will be used to “wring funds from producers and consumers in other States to subsidize certain New-York-based ‘infrastructure’ projects, such as a new sewer system in New York City.”[10]

The West Virginia complaint relies heavily on the Second Circuit’s decision in City of New York v. Chevron Corp., which affirmed the dismissal of New York City’s suit against oil companies for climate-related damages. The Second Circuit held there that the City’s common law tort claims, such as trespass and nuisance, were preempted by the Clean Air Act.[11] Similar arguments have been made in a challenge to Vermont’s Climate Superfund law in federal court in Vermont (which also sits in the Second Circuit) by the U.S. Chamber of Commerce and the American Petroleum Institute.[12]. Other grounds of attack against the Vermont law include the Commerce Clause, Equal Protection Clause, and Excessive Fines Clause under the Eighth Amendment.

        III. State Climate Superfund Bills Under Consideration in Other States

Despite the legal challenges, other states are considering their own Climate Superfund laws.

Climate Superfund bills were first considered in the Massachusetts House and Senate as H.872 and S.481 in 2023 and 2024, but with no action on those bills since April 2024.[13] The bills would have set a $75 billion total fine for climate harms caused from 2000 through 2018 in the state and apportion the fine among large fossil fuel companies, akin to the New York law. Another Climate Superfund bill has been proposed as S.D.1674, however, at the beginning of the current session.[14] Unlike its predecessor bills, S.D.1674 is modeled more after the Vermont bill, with the Secretary of the Executive Office of Energy and Environmental Affairs tasked with estimating a total climate cost figure.

Oregon is currently considering a Climate Superfund bill introduced earlier this year in the Oregon Senate as SB 682.[15] Like the Vermont law, the bill would task the State Treasurer, in consultation with other agencies, with developing a total cost estimate for the effects of greenhouse gas emissions on the state, and task the Oregon Department of Environmental Quality with imposing fees on fossil fuel companies proportional to their relevant greenhouse gas emissions.

In California, SB 1497, known as the Polluters Pay Climate Cost Recovery Act of 2024, was introduced last year but did not make it out of the Senate’s appropriations committee.[16] Similar to the Vermont law, the bill would have charged the California Environmental Protection Agency with calculating the total cost of climate change in the state and apportioning the cost among fossil fuel companies. After the deadly fires in Los Angeles early this year, some environmental groups are pushing for a second look at a Climate Superfund law in the Golden State, though a bill has not yet been reintroduced in the current session.[17]

Finally, the Maryland legislature considered SB 958, termed the RENEW Act and akin to Vermont’s Climate Superfund law in 2024.[18] The bill would, similar to the New York law, set a $9 billion recovery target and sought to apportion the target among the 40 largest fossil fuel companies globally. A hearing before the Maryland Senate Committee on Education, Energy, and the Environment is set for February 20, 2025. In December 2024, the Maryland Commission on Climate also recommended further study on what target to set for a cost estimate for redressing the impacts of climate change in the state,[19] potentially setting the stage for a revised RENEW Act in the future. 

        IV. Conclusion

Changes in priorities at the federal level will result in changes to environmental laws at the state level, but not necessarily in the same direction. Because our clients typically do business in many states, and often in many countries, it will be more important than ever to keep an eye on both federal and state environmental law developments this year.  With a team approaching 30 lawyers spread across the country, Marten Law can help. 

For more information on Climate Superfund laws, or environmental regulation or litigation in New York, please contact Dan Mulvihill or Victor Xu.

[1] See N.Y.C.L. ECL § 76-0101(7); § 76-0103(3)(B). 

[2] Section 76-0103(3)(B).

[3] “Fuel gases” are defined in New York’s to “include but not be limited to methane, natural gas, liquefied natural gas, and manufactured fuel gases.” N.Y.C.L. ENG § 1-103(8). See also N.Y.C.L. ECL § 76-0101(10).

[4] N.Y.C.L. ECL § 76-0103(3)(E).

[5] 10 V.S.A. Ch. 24A § 596(8).

[6] 10 V.S.A. Ch. 24A § 599c.

[7] 10 V.S.A. Ch. 24A § 598(b).

[8] See Complaint, State of West Virginia, et al. v. James, et al., Civ. No. 25-cv-168 (BKS) (DJS), ¶¶ 9-16. Three trade associations and one industry member also joined the Complaint as plaintiffs.

[9] See id., ¶¶ 52-53, 56, 58.

[10] Id., at ¶¶ 1, 4

[11] City of New York v. Chevron Corp., 993 F.3d 81, 99 (2d Cir. 2021).

[12] Chamber of Commerce of the United States of America, et al., v. Moore, et al., Civ. No. 24-01513 (D. Vt.). The pre-emption argument, however, was recently rejected in another case, City and County of Honolulu v. Sunoco LP, 537 P.3d 1173 (2023). In that case, the Hawaii Supreme Court ruled that the Clean Air Act and federal common law did not preempt Honolulu’s suit against oil and gas manufacturers for climate-related damages, and the U.S. Supreme Court declined to review the case on January 13, 2025.

[13] Massachusetts, 193rd Regular Sess., S.481, An Act establishing a climate change superfund and promoting polluter responsibility, https://malegislature.gov/Bills/193/S481.

[14] Massachusetts, 194th Regular Sess., S.D.1674, https://malegislature.gov/Bills/194/SD1674/Senate/Bill/Text.

[15] SB 682, 83rd Or. Leg. Assembly, 2025 Regular Sess., https://olis.oregonlegislature.gov/liz/2025R1/Downloads/MeasureDocument/SB682.

[16] California Legislature, 2023-2024 Regular Sess., SB-1497 Polluters Pay Climate Cost Recovery Act of 2024, https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1497.

[17] Karen Zraick, L.A. Fires Revive Calls for a ‘Climate Superfund’ Law in California, N.Y. Times (Jan. 17, 2025), https://www.nytimes.com/2025/01/17/climate/climate-superfund-law-new-york-vermont-california.html.

[18] Maryland General Assembly, 2024 Regular Sess., SB 958, Responding to Emergency Needs From Extreme Weather (RENEW) Act of 2024, https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB0958?ys=2024RS.

[19] J. Kurtz, State Panel Votes to Study, Rather than Recommend, Ways to Pay for Climate Plan, Maryland Matters (Dec. 13, 2024), https://marylandmatters.org/2024/12/13/state-panel-votes-to-study-rather-than-recommend-ways-to-pay-for-climate-plan/.