State Climate Laws and Litigation Face Federal Pushback Under New Executive Order

Targeted State Programs and Legal Initiatives
While the Executive Order does not enumerate every state and local law, policy, practice, or legal action subject to review, it does identify four initiatives that, in the Administration’s view, overstep legal bounds or conflict with national energy objectives. These fall into two overarching categories:

Climate Change Liability Laws and Litigation
The first set of targeted initiatives includes state efforts to assign financial responsibility for climate change impacts to fossil fuel companies through both legislation and litigation:

• Climate Superfund Laws. Recently enacted in New York and Vermont, and under consideration in several other jurisdictions, these laws impose financial liability on fossil fuel companies for historical greenhouse gas (GHG) emissions. Modeled on the federal Superfund framework, they authorize states to recover the costs of climate-related infrastructure damage and adaptation measures through assessments on major emitters. The Order describes these statutes as “extortion[nary],” asserting that they retroactively impose excessive penalties, unfairly target out-of-state businesses, and lack sufficient legal grounding. Lawsuits challenging these statutes were filed in December 2024 and February 2025 by nearly two dozen states and industry groups, raising constitutional concerns such as federal preemption and due process violations—issues echoed in the Executive Order.
• Climate Change Litigation. Separately, several states and municipalities have filed lawsuits against energy companies under state tort theories, including public nuisance, failure to warn and consumer protection laws. These suits seek compensation for climate-change or extreme weather-related harms and have faced years of jurisdictional wrangling over whether they belong in state or federal court. While many have been dismissed—often on preemption grounds—several remain pending. In one closely watched case—City and County of Honolulu v. Sunoco—the U.S. Supreme Court recently denied the defendants’ request for review, allowing the case to proceed in Hawaii state court. The Executive Order states that these cases inappropriately assign blame for global climate change and risk undermining federal energy and environmental policy.

Together, these legislative and litigation efforts reflect an evolving trend of state-led attempts to seek compensation and damages for climate change and extreme weather events. The Executive Order weighs in against these efforts from the federal executive level, reinforcing arguments made in court that climate change is not a matter for state-by-state legal regimes.

Regulatory Programs and Permitting Actions
The second category of targeted actions includes state regulatory programs and permitting practices that the Administration views as impediments to traditional energy development:

• Cap-and-Trade Programs. California’s carbon market is cited as a representative example of a state-led approach that, according to the Order, distorts energy markets and imposes financial and regulatory burdens beyond its borders. The Administration contends such programs raise concerns under the Commerce Clause of the U.S. Constitution, interfering with interstate commerce, and conflict with a unified national energy policy.
• Permitting Delays. The Order highlights delays in air, water and siting permit approvals as potential obstructions to energy and mineral development. Where state and local permitting decisions are influenced by climate or environmental justice considerations, the Administration frames them as inconsistent with national priorities and the delegation of federal authority to the states.

The Administration characterizes these combined efforts as “fundamentally irreconcilable” with its energy policy objectives. The Order asserts that they drive up energy costs, weaken national security, and undermine federalism by allowing a handful of states to impose their regulatory preferences nationwide.

DOJ Review and Enforcement Action
The Order instructs the Attorney General to conduct a comprehensive review of relevant state and local laws, regulations, policies, practices, and legal actions that may restrict or burden the use of traditional domestic energy resources.

If, following that review, the Attorney General determines that a state measure is unlawful—whether on constitutional, preemption or other legal grounds—she is authorized and directed to take immediate steps to halt its enforcement or the continuation of any related civil litigation.

By June 8, 2025, the Attorney General must submit a report to the President detailing the actions taken under this directive and recommending additional executive or legislative steps to implement the Order’s objectives.

Looking Ahead
Executive Order 14260 marks an escalation in the Administration’s efforts to assert federal authority over climate and energy policy, reflecting a clear intent to challenge state-level initiatives deemed inconsistent with national energy priorities. The Order also amplifies legal questions—already emerging in litigation—regarding the scope of state authority in environmental lawmaking and the constitutional balance between federal and state powers in regulating energy markets and addressing climate-related impacts.

This action is part of a broader wave of executive actions aimed at revisiting or dismantling regulatory regimes viewed by the Administration as impediments to traditional energy development. As federal agencies move forward with implementation, regulated entities may face heightened uncertainty as regulations evolve, legal challenges unfold, and jurisdictional boundaries are tested.

Pillsbury’s attorneys are closely monitoring these developments and will continue to provide updates on the legal, regulatory and strategic implications for businesses navigating this shifting landscape.