Federal Court Holds New York Climate Change Superfund Act Preempted
On August 31, 2026, the U.S. District Court for the Northern District of New York granted summary judgment to two groups of plaintiffs challenging New York’s Climate Change Superfund Act, holding that the Act is preempted by federal law.1 The decision relies principally on the Second Circuit’s ruling in City of New York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021), which held that New York City could not pursue state-law claims seeking damages from fossil-fuel producers for harms allegedly caused by global greenhouse gas emissions.
Background: New York enacted the Climate Change Superfund Act in 20242 to establish a $75 billion climate-change adaptation cost-recovery program. The Act imposes strict liability on fossil-fuel producers and refiners determined by the New York State Department of Environmental Conservation to be responsible for more than one billion tons of covered greenhouse gas emissions during the statutory period. Liability is allocated based on emissions attributable to fossil-fuel extraction and refining worldwide and is not limited to emissions occurring within New York, although the Act excludes entities lacking sufficient contacts with New York to satisfy federal due process. Covered companies are required to make proportional payments into a state fund intended to finance climate-adaptation infrastructure.
Before reaching the merits, the court rejected New York’s argument that the plaintiffs lacked standing. The court concluded that Alpha Metallurgical Resources, Inc. and several members of the plaintiff trade associations faced a credible threat of enforcement based, among other things, on legislative materials identifying companies that could be subject to cost-recovery demands under the Act.
The Decision: Chief Judge Brenda K. Sannes concluded that the Climate Change Superfund Act is materially indistinguishable from the state-law climate damages claims rejected in City of New York. There, the Second Circuit held that claims seeking compensation for harms caused by global greenhouse gas emissions implicated uniquely federal interests, including the need for uniform national energy and environmental policy and basic principles of federalism.3
The court rejected New York’s efforts to distinguish City of New York on the grounds that the Climate Act imposes liability by statute rather than common law and seeks compensation for historical emissions rather than prospective emissions reductions. The court reasoned that “state law” encompasses both statutory and common law and found no basis for permitting New York to impose through legislation the same type of liability that the Second Circuit held could not be imposed through common law. The court further concluded that imposing substantial monetary liability based on worldwide greenhouse gas emissions could effectively regulate conduct beyond New York’s borders and found “very little daylight” between the Climate Act and the claims rejected in City of New York.4
Turning to the Clean Air Act, the court held that the federal statutory scheme does not authorize New York to impose this type of interstate emissions-compensation regime. The Second Circuit had previously concluded in City of New York that the Clean Air Act displaced the federal common law governing domestic transboundary greenhouse gas emissions and did not authorize New York to pursue the type of state-law claims asserted there. Judge Sannes concluded that the Climate Act sought to impose substantially the same type of liability and therefore was likewise preempted.
The court also addressed EPA’s February 2026 rescission of its 2009 greenhouse gas endangerment finding.5 Rejecting New York’s argument that the rescission undermined plaintiffs’ preemption theory, the court held that the Clean Air Act’s preemptive effect turns on the statutory framework Congress established and its delegation of regulatory authority to EPA, not on how EPA exercises that authority at a particular time.
Because the Clean Air Act does not extend to foreign emissions, the court separately considered the Act’s application to foreign fossil-fuel producers. It held that imposing cost-recovery liability based on foreign emissions would impermissibly intrude upon the federal government’s authority over foreign affairs and therefore could not constitutionally be applied to foreign producers.6
The court accordingly granted plaintiffs’ motions for summary judgment on their preemption claims and denied New York’s cross-motion for summary judgment.7 Having resolved the merits on Clean Air Act and foreign-affairs grounds, the court did not reach the plaintiffs’ remaining constitutional theories and directed the parties to submit a status report by September 14, 2026, regarding further proceedings.
Takeaways: The decision is significant because it rejects an effort to distinguish state climate cost-recovery legislation from state-law climate tort claims. Under the court’s reasoning, a state cannot avoid the preemption principles articulated in City of New York simply by converting a climate-damages theory into a statutory strict-liability program. The decision may therefore have implications for similar state climate cost-recovery laws that allocate climate-adaptation costs to fossil-fuel producers based on historical or worldwide greenhouse gas emissions.
Its broader significance, however, may depend on the continued vitality of City of New York. The district court acknowledged that courts outside the Second Circuit have criticized aspects of that decision’s federal-common-law analysis, including the Hawaii and Colorado supreme courts. The U.S. Supreme Court has granted certiorari in Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County, No. 25-170, to decide whether federal law precludes state-law claims seeking relief for injuries allegedly caused by the effects of interstate and international greenhouse gas emissions on the global climate.
The Vermont Climate Superfund litigation would proceed through the Second Circuit, not the First Circuit. Vermont is within the Second Circuit, so any appeal from the U.S. District Court for the District of Vermont would go to the Second Circuit. That also means City of New York is controlling precedent for the Vermont district court, just as it was for the Northern District of New York.
For more information, please contact Thomas Berkman, Jenna Rackerby, or any member of our Environmental Practice.
Disclaimer
This alert is a form of attorney advertising. Hodgson Russ LLP provides this information as a service to its clients and other readers for educational purposes only. Nothing in this client alert should be construed as, or relied upon, as legal advice or as creating a lawyer-client relationship.
1 State of West Virginia v. James, No. 1:25-cv-00168 (BKS/DJS), consolidated with Chamber of Commerce v. James, No. 1:25-cv-01307 (BKS/DJS), slip op. at 63 (N.D.N.Y. Aug. 31, 2026).
2 https://legislation.nysenate.gov/pdf/bills/2023/S2129B
3 See City of New York, 993 F.3d at 91-92.
4 State of West Virginia, slip op. at 42-50.
5 https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-rescission-greenhouse-gas-endangerment
6 State of West Virginia, slip op. at 59-62.
7 Except as to Acting Tax Commissioner Amanda Hiller, against whom the claims were dismissed on Eleventh Amendment grounds.