A federal judge has dismantled New York’s pioneering attempt to make the world’s largest fossil fuel companies foot the bill for climate damage, ruling that the state’s “climate superfund” law is unconstitutional and cannot be enforced.
Brenda Sannes, chief judge of the US district court for the northern district of New York, delivered a 63-page decision on Monday siding with a coalition of Republican state attorneys general and oil industry plaintiffs who argued the legislation overstepped New York’s powers.
Passed in December 2024 by Governor Kathy Hochul, the law would have required major oil companies to pay $75bn over 25 years to fund climate mitigation and adaptation projects across the state. Sannes described the measure as “unusual and sweeping” and found it improperly relied on a second circuit court ruling from 2021 — City of New York v Chevron — a precedent she said came from “a fundamentally different case”.
Industry and Republicans celebrate as court delivers decisive win
The ruling represents a significant victory for the fossil fuel sector and Republican officials who have spent months challenging the legislation in court. West Virginia Attorney General JB McCuskey, whose office led the legal challenge, hailed the decision as a defence of energy workers.
“This is 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,” McCuskey said.
The Trump administration lent its weight to the case at a hearing last month, with the Department of Justice arguing in support of the lawsuit. Federal prosecutors have also filed separate litigation against the New York policy in the southern district of New York; that case remains pending.
Hochul’s office weighs appeal as campaigners demand fightback
Hochul has yet to confirm whether New York will challenge the ruling. A spokesperson said the governor’s office was “reviewing the decision to determine possible next steps”. Ken Lovett, senior communications adviser on energy and environment for Hochul, confirmed the assessment was underway.
Campaigners argue the state has little choice but to appeal, warning that allowing the ruling to stand would let major polluters escape their obligations. Cassidy DiPaola, communications director for Make Polluters Pay, said New York Attorney General Tish James must act fast.
“This decision rests on contested precedent from a fundamentally different case, and Attorney General Tish James must appeal immediately,” DiPaola said. “If allowed to stand, some of the richest corporations in history get to walk away from $75bn they owe New Yorkers.”
Ruling unlikely to halt nationwide momentum
Despite the setback, supporters of polluter-pays legislation insist the ruling applies only to New York and should not deter lawmakers in other states from pursuing similar measures.
Vermont is the only other US state to have enacted a climate superfund law, and it is already facing a parallel legal challenge in federal court. Bills modelled on New York’s approach have been introduced elsewhere but none has yet become law.
DiPaola pushed back against any suggestion the industry had landed a knockout blow. “The fossil fuel industry would like nothing more than for one district court ruling in New York to scare lawmakers across the country into backing down,” she said. “But this decision doesn’t bind other states or stop them from passing their own laws.”
Why it Matters
The ruling delivers a serious blow to a flagship piece of climate accountability legislation and hands the fossil fuel industry a powerful legal precedent it will almost certainly deploy against similar efforts across the country. For New York, the decision leaves an enormous funding gap at a moment when the state is bracing for escalating costs from flooding, extreme heat and coastal erosion — consequences scientists attribute directly to the burning of oil and gas. The coming weeks will test whether Hochul’s administration has the appetite for a protracted legal battle, and whether other states are emboldened or paralysed by the verdict. Either way, the courtroom has become the new frontline in the fight over who ultimately pays for the climate crisis.
