Alert
Alert
By Amanda G. Halter, Ashleigh Myers, Jillian Marullo, Kelsey Parker
04.04.25
States are increasingly turning to “Climate Superfund” laws as a potential mechanism to offset the growing costs of climate-related disaster recovery and the construction of more climate change-resilient infrastructure. These laws aim to hold select energy companies financially responsible for infrastructure resiliency investments and climate-related damages based on prior greenhouse gas (GHG) emissions. However, they raise significant constitutional questions, particularly concerning state authority over global and interstate climate issues and the retroactive imposition of liability for past, lawful activities. The first two states to enact such laws—Vermont and New York—are already defending them in court against challenges rooted in federal preemption and constitutional limitations.
Legal Challenges to Vermont’s Climate Superfund Law
On December 30, 2024, the American Petroleum Institute (API) and the U.S. Chamber of Commerce filed suit against Vermont over its Climate Superfund law, the first of such laws to be passed. Chamber v. Moore, 2:24-cv-01513 (D. Vt. Dec. 30, 2024). Marking the first challenge to a state Climate Superfund law, the lawsuit asserts that Vermont’s law is unconstitutional and preempted by federal law. Specifically, the plaintiffs set forth the following challenges:
The complaint cites Second Circuit precedent in City of New York v. Chevron Corp., 993 F.3d 81 (2ndCir. 2019), where the Second Circuit upheld the district court’s dismissal of a municipality’s state law claims for nuisance and trespass against several multinational energy companies for damages caused by global GHG emissions. There, the court concluded that federal common law, rather than state law, governed claims related to global GHG emissions—but that the CAA displaced any federal common law claims related to domestic emissions.
Vermont has yet to file any responsive pleadings; however, on March 20, 2025, the court entered the parties’ stipulated briefing schedule, giving the state until May 19 to file an answer or a motion to dismiss, with briefing on any such motion to be completed by early September and setting oral argument in October or November. On March 31, the Northeast Organic Farming Association and Conservation Law Foundation sought leave to intervene in the case. While the plaintiffs oppose the requested intervention, the state has consented.
Despite the pending legal challenge, Vermont’s Agency of Natural Resources is proceeding with cost assessments for emissions from 1995 to 2024, with initial cost recovery demands expected by mid-2027. Some legal commentators suggest the lawsuit may be premature and speculate it could be dismissed or delayed until Vermont finalizes these initial assessments and issues demands.
New York Faces Similar Lawsuits Amid Legislative Amendments
New York is defending two lawsuits challenging its Climate Superfund law. On February 6, a coalition of industry groups and 22 states, led by West Virginia, filed suit in the Northern District of New York. West Virginia v. James, No. 25-cv-00168 (N.D.N.Y). The allegations and causes of action in the complaint largely mirror those made in the Vermont lawsuit, with the plaintiffs asserting that the law is preempted by federal law and violates the U.S. Constitution. In addition, the plaintiffs allege violations of the New York Constitution’s due process clause.
After this suit was filed, and just two months after the law’s enactment, New York amended its Climate Superfund law on February 28, 2025. Among the key changes, the amendment limits liability to companies whose connections to New York “satisfy the due process clause of the United States Constitution”—an attempt to ensure that only entities with sufficient jurisdictional ties to the state are held liable under the law and an effort to ensure the law survives personal jurisdiction challenges. The amendment also narrows the definition of “covered greenhouse gas emissions” to include only emissions attributable to fossil fuel extraction and refining, rather than emissions generated throughout the supply chain.
On the same day the amendment was signed into law, API, the U.S. Chamber, the National Mining Association, and the Business Council of New York State, Inc. filed a separate lawsuit challenging the amended version of the law—this time in the Southern District of New York. Chamber of Commerce v. James, No. 25-cv-01738 (S.D.N.Y.). This complaint largely reiterates the constitutional and preemption arguments raised in the Northern District of New York and Vermont lawsuits.
On March 17, New York filed its answer in the first New York suit, West Virginia v. James, asserting several defenses, including lack of standing, ripeness, mootness, failure to state a claim, and lack of final agency action, and denying that the law is preempted or unconstitutional. A status conference is scheduled for May 9, with mandatory disclosures and a civil case management plan due by May 2.
Also on March 17, the New York Attorney General’s Office submitted a letter to the Southern District of New York seeking a 60-day extension (until May 23) to answer the complaint in the second suit, Chamber of Commerce v. James, and requesting a pre-motion conference to seek a venue transfer of the case to the Northern District of New York, where West Virginia v. James is pending. On March 21, the Southern District granted the state leave to file a motion to transfer venue and set the following briefing schedule: The motion is due April 11, 2025, oppositions are due April 25, and the state’s reply is due May 2. The court also extended the deadline for New York’s answer to 30 days following the court’s decision on the motion to transfer. API and the U.S. Chamber have indicated they will oppose the venue transfer.
What’s at Stake?
The lawsuits challenging Vermont’s and New York’s Climate Superfund laws highlight the legal and constitutional complexities of state-led efforts to hold corporations liable for climate-related damages resulting from historic, otherwise legal operations. As more states consider similar legislation, additional legal challenges are inevitable, shaping the future landscape of climate accountability and corporate liability. Beyond these individual cases, the broader questions at play—state authority over climate regulation, the scope of federal preemption, and the constitutional limits of retroactive liability—could set critical legal precedents. The outcomes may influence not only state-level climate policies but also national and global approaches to climate responsibility. Ultimately, the final resolution of these constitutional questions may rest with the U.S. Supreme Court, which could potentially define the legal framework for climate accountability.
Pillsbury’s Environmental & Natural Resources practice will continue to monitor developments in Climate Superfund litigation and legislation.