An Obama-appointed federal judge on Thursday sharply questioned a New York law designed to force polluters to pay for the effects of climate change, offering an early signal that courts may be skeptical of a strategy that has become a prime target of President Donald Trump’s Justice Department.
Chief Judge Brenda Sannes of the U.S. District Court for the Northern District of New York had tough questions for state attorneys over whether the 2024 New York Climate Change Superfund Act — one of two of its kind in the U.S. — encroaches on powers reserved for the federal government.
“Would you agree that [New York’s law] … implicates conflicting rights of states in our relations with federal nations, and so it involves uniquely federal interests?” Sannes asked a lawyer with New York Attorney General Letitia James’s (D) office.
Modeled after the “polluter pays” model of the federal Superfund program, which created a tax on chemical and petroleum industries to clean up hazardous waste sites, New York’s law seeks billions of dollars from energy producers to fund climate adaptation costs.
The law aims to charge fossil fuel producers $75 billion over 25 years, with payments pegged to historical emissions of those companies’ products.
Trump’s DOJ — along with red states and energy trade associations — have challenged New York’s law and a similar one in Vermont. DOJ’s lawsuits are part of an unusual effort by the Trump administration to go after states for taking creative measures to address climate change.
A federal judge heard arguments in a challenge to Vermont’s law in March but did not indicate which way she might rule. Other states have considered similar legislation and could be encouraged by a favorable ruling, though the cases are likely to land before the Supreme Court.
New York Assistant Attorney General Sabita Krishnan told Sannes that New York’s law doesn’t meddle in federal matters because it does not regulate fossil fuel producers by forcing them to cut production or curb emissions.
Before they arrived in her Syracuse courtroom, Sannes asked attorneys for both sides to address whether the law could be constitutional if Sannes finds that it is subject to a 2021 decision by the 2nd U.S. Circuit Court of Appeals. That ruling said federal statute barred New York City from leveraging state law to sue oil and gas companies for climate change.
“I do have to follow the 2nd Circuit law,” Sannes told Krishnan at one point.
Krishnan said the 2nd Circuit’s decision was limited to the city’s claim that fossil fuel companies had violated state public nuisance laws.
“The court did not hold more broadly, as I think the plaintiffs assert, that any liability related to greenhouse gas emissions must be governed by federal law,” she said.
Krishnan argued there is a difference between New York’s lawsuit and the climate superfund law. The city’s climate lawsuit would have “required federal courts to set standards that the defendants in the case would have to follow, and those were standards that would apply across state borders,” she said.
Sannes asked whether it was true the state law applies to greenhouse gas emissions worldwide, not just in New York. She noted that when legislators wrote the law, they put together a list of “entities all over the world. So, doesn’t this act implicate the conflicting rights of states and our relations with federal nations?”
Krishnan said the New York Department of Environmental Conservation will determine which parties would be responsible for payments.
Steven Lehotsky, an attorney for the U.S. Chamber of Commerce, American Petroleum Institute and other private parties challenging New York, told Sannes the state law is “really just a tort suit disguised.”
He argued that the law is “simply a repackaging of the same argument that the city of New York tried and failed to succeed with in the 2nd Circuit.”
Sannes also asked New York whether its law intrudes on foreign affairs. Assistant Attorney General Laura Mirman-Heslin said the law is grounded in traditional state powers because it “raises revenue to protect New York’s property and its residents from harm.”
She said the law does not cross into foreign affairs because it does not criticize any foreign government and would affect only companies with “sufficient contact” with New York. She noted New York environmental regulators have not yet determined that any foreign state-owned company would be held liable.
Sannes posed a similar question to Ian Swenson, an attorney with DOJ’s Energy and Natural Resources Division. She noted New York has pointed out in court filings that the Trump administration has pulled out of the United Nations Framework on Climate Change and Paris climate accord.
“We’ve been in these agreements. We’ve been out of these agreements,” Swenson said. He argued that withdrawing from the agreements “is still a conscious choice of foreign policy” and said the Trump administration has sought to “promote energy production and our domestic growth” in foreign affairs.
Caleb David, deputy solicitor general and special counsel for West Virginia, one of the Republican-led states challenging New York’s law, argued that the case can’t be distinguished from New York City’s lawsuit against the oil and gas industry that the 2nd Circuit rejected.
“Just as New York state is doing now, New York City argued that they weren’t regulating anything, this was just a revenue-raising measure,” David said. But, he continued, “imposing liability for global greenhouse gas emissions is a potent method of governing conduct and controlling policy.”
That power, he said, rests with the federal government.
Sannes also appeared to agree with New York’s challengers that they have the standing to bring the case, a procedural question with the potential to stop the lawsuit before it even begins. She noted that several parties, including Exxon Mobil and Chevron, have grounds for the lawsuit because they “have a credible fear that they will face enforcement of the statute.”
