District Court Finds New York’s Climate Change Superfund Act Preempted By “Federal Interests”

On August 31, 2026, a district judge of the United States District Court for the Northern District of New York held that the State’s Climate Change Superfund Act (or the Act) is preempted and thus cannot be enforced. West Virginia v. James, No. 1:25-cv-00168 (N.D.N.Y. 2026). This decision is a significant development in the emerging dispute over state climate Superfund laws, which generally seek to require fossil fuel companies to contribute toward the costs of climate change adaptation in the respective state.

Background

In December 2024, New York enacted the Climate Change Superfund Act, which established a “climate change adaptation cost recovery program” directed at major fossil fuel companies deemed responsible for historic greenhouse gas (GHG) emissions.

Under the Act, covered companies would collectively be required to pay approximately $75 billion, with each company responsible for its “proportionate share,” to fund infrastructure investments and other projects addressing the impacts of climate change in New York.

District Court’s Opinion

The district court, relying in large part on the Second Circuit Court of Appeals’ decision in City of New York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021), held that the Act was preempted on several grounds.

First, the district court found that the Act was preempted because it conflicted with “federal interests” that are incompatible with the application of state law, namely the “overriding … need for a uniform rule of decision on matters influencing national energy and environmental policy, and [] basic interests of federalism.” Second, the court held that the CAA, which displaced federal common law claims concerned with domestic GHG emissions, preempts the Act because the CAA does not authorize New York to impose liability for those emissions. The court also concluded that EPA’s recission of the 2009 endangerment finding “has no impact” on its analysis, reasoning that how EPA chooses to exercise its Congressionally-delegated authority to regulate GHG emissions does not affect the CAA’s preemptive force. Finally, the court held that the foreign affairs doctrine preempted the Act to the extent it imposed liability on foreign fossil fuel companies. New York Governor Kathy Hochul has indicated that the State is looking at its options for appealing the district court’s decision to the Second Circuit Court of Appeal.

Other states, including California, Illinois, and Hawaii, have considered similar climate Superfund legislation, but New York and Vermont remain the only states to have enacted such laws. Vermont enacted its Climate Superfund Act in May 2024, and it similarly requires major fossil fuel companies to contribute toward the costs of addressing climate change impacts in the State. Vermont’s Climate Superfund Act is currently the subject of litigation before the United States District Court for the District of Vermont, where challenges remain pending.

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