U.S. District Court Strikes New York Climate Change Superfund Act

On September 14, 2026, attorneys for New York State and plaintiffs challenging New York’s Climate Change Superfund Act (the “Climate Superfund Act”) jointly asked the U.S. District Court for the Northern District of New York to enter final judgment on the plaintiffs’ two preemption claims. The request follows the court’s August 31 Memorandum-Decision and Order granting summary judgment on those preemption claims and would set the stage for an immediate appeal to the Second Circuit. Any appeal could be significantly affected by the Supreme Court’s forthcoming decision in Suncor Energy v. County Commissioners of Boulder County, scheduled for oral argument on October 5, 2026.

The Climate Superfund Act 

The Climate Superfund Act, signed into law in 2024, established a cost-recovery program targeting certain fossil-fuel companies responsible for more than 1 billion tons of greenhouse gas (GHG) emissions attributable to fossil-fuel extraction and refining worldwide between 2000 and 2024. The Act required responsible companies to collectively contribute $75 billion over the next 25 years to fund infrastructure addressing the effects of climate change. The New York State Department of Environmental Conservation was charged with implementing the program and determining each company’s proportional share of covered emissions and costs.

What Happened

The Act was challenged in a consolidated action by 22 states, a fossil-fuel producer, and several industry and business associations. Plaintiffs argued that the Act was preempted by federal law and violated the Constitution because it imposed liability for interstate and global GHG emissions.

Chief Judge Brenda K. Sannes granted the plaintiffs’ motions for summary judgment, holding that the Climate Superfund Act is preempted by the federal Clean Air Act (CAA) and by the foreign affairs doctrine with respect to foreign producers. The court relied heavily on the Second Circuit’s 2021 decision in City of New York v. Chevron Corp., finding “there is very little daylight” to distinguish between common-law claims seeking damages for global GHG emissions that the Second Circuit rejected and the Climate Superfund Act’s $75 billion statutory cost-recovery scheme. Moreover, federal common law historically governed interstate air pollution, and the CAA displaced it; New York could impose liability only to the extent the CAA authorized. The court concluded that the CAA provided no basis for the Climate Superfund Act’s emissions-compensation scheme, and therefore held it preempted.

The court declined to determine whether the U.S. Constitution or federal common law, standing alone, preempted the Climate Superfund Act’s regulation of domestic interstate emissions. With respect to foreign emissions, the court separately applied the foreign-affairs doctrine, reasoning that imposing liability based on a company’s foreign emissions risks interference with national foreign policy.

Remaining Claims and Potential Appeal

The court’s summary judgment ruling did not address all the plaintiffs’ claims, including constitutional challenges under the Commerce Clause, Due Process Clause, Equal Protection Clause, Excessive Fines Clause, and Takings Clause. Those claims provide alternative grounds for challenging the Act and were unnecessary to resolve once Judge Sannes held that the Act was preempted. On September 14, the parties jointly asked the court to enter a declaratory judgment that the Act is preempted, enjoin New York officials from implementing or enforcing the Act, and enter final judgment under Federal Rule of Civil Procedure 54(b) on the two preemption claims. The parties also asked the court to administratively close the case and hold the remaining claims in abeyance pending appeal.

Supreme Court’s Review of Suncor

Going forward, the case will unfold alongside the Supreme Court’s consideration of Suncor Energy v. County Commissioners of Boulder County, on appeal from the Colorado Supreme Court.   The Supreme Court is scheduled to hear argument in Suncor on October 5, 2026, on whether federal law precludes state-law claims seeking relief for harms allegedly caused by interstate and international GHG emissions.  The case is expected to address the type of federal preemption issue raised in the Climate Superfund Act case and could therefore directly affect the legal precedent governing an appeal of the NDNY ruling.

Impact on New York Climate Programs

For now, implementation of the Climate Superfund Act is effectively on hold. The Act remains on the books, but Judge Sannes’s ruling holds that the Act is preempted, and the parties have jointly asked the court to formally enjoin New York officials from implementing or enforcing it. The ruling appears to have less direct significance for New York’s broader Climate Leadership and Community Protection Act (CLCPA), which principally imposes forward-looking GHG requirements rather than retroactive liability. Certain CLCPA requirements could nevertheless face similar challenges if they seek to regulate conduct or emissions occurring outside New York.

Potential Implications for Vermont and Other States 

The decision may have immediate consequences for similar Climate Superfund laws. Vermont’s law is already subject to federal challenges, and because Vermont is also in the Second Circuit, Judge Sannes’s reliance on City of New York provides challengers additional support. The ruling may also affect other states considering similar legislation. Companies potentially subject to these laws should not, however, assume that the New York decision has resolved their exposure. While the New York program has no current payment requirements, covered companies should continue monitoring the Supreme Court’s forthcoming decision in Suncor, the New York litigation, and the Vermont challenges. Those proceedings could determine whether the New York ruling becomes a broader barrier to state climate-liability programs or proves to be more limited or temporary.

Beveridge & Diamond’s Air and Climate Change practice group helps private and municipal clients navigate all aspects of climate change initiatives, including state and federal regulatory programs, obligations arising under international agreements, private governance, and sustainability initiatives. B&D’s more than 50 litigators represent clients in civil, criminal, and appellate court cases, as well as in administrative, arbitration, and mediation proceedings. For more information, contact the authors.