Trump Administration Sues New York and Vermont Over Climate Superfund Legislation

On May 1, 2025, the federal government brought separate suits against both New York and Vermont alleging that these state’s “climate Superfund” statutes are unconstitutional on multiple grounds. In two nearly identical complaints, the federal government argues that New York and Vermont’s statutes are preempted by the Clean Air Act, violate due process, violate the interstate and foreign commerce clauses, and infringe on the federal government’s authority over foreign affairs. These suits come less than a month after President Donald J. Trump signed an Executive Order titled “Protecting American Energy From State Overreach” (the “April 8th Executive Order”) specifically calling out “climate Superfund laws” and directing the U.S. Attorney General to identify and halt enforcement of state laws that burden energy production and may be preempted by federal law or are otherwise unconstitutional.

Background on Climate Superfund Laws

In recent years, various Democrat-led states have enacted laws to address climate change and greenhouse gas (“GHG”) emissions. While many of these laws have aimed to address GHG emissions indirectly through cap-and-trade programs or California’s climate disclosure rules, New York and Vermont have gone further by seeking to impose direct liability on companies for alleged damages arising from their GHG emissions. Vermont moved first, enacting the “Climate Superfund Act” (“Vermont CSA”) on May 30, 2024. The Vermont CSA seeks to hold certain fossil fuels extractors and refiners strictly liable for their alleged contributions to global GHG emissions from 1995–2024, with no monetary cap on the amount the state can demand from these purported “responsible parties.” On December 26, 2024, New York passed the “Climate Change Superfund Act” (“NY CCSA”), which functions similarly in many ways to the Vermont CSA. The NY CCSA imposes strict liability on fossil fuel producers that are deemed responsible for more than one billion tons of certain GHG emissions from 2000–2024. The NY CCSA requires New York to collect a total of $75 billion from these entities, which would result in each entity being held liable for its pro rata share of the $75 billion representing that entity’s share of covered GHG emissions relative to all identified responsible parties. Under both statutes, the funds collected from “responsible parties” will be used to pay for infrastructure projects aimed at adapting to, and mitigating the effects of, climate change.

Federal Lawsuits Against Climate Superfund Laws

As we discussed in an earlier client alert, President Trump has issued a litany of Executive Orders relating to energy issues. On April 8, 2025, the President singled out the Vermont CSA and NY CCSA in an Executive Order directing the Attorney General to halt enforcement of state laws that burden energy production. In connection with this directive, on May 1, 2025, the administration sued Vermont in the U.S. District Court for the District of Vermont and New York in the U.S. District Court for the Southern District of New York. Each complaint opens with the President’s April 8th Executive Order, notes the administration’s declaration of an “energy emergency,” and labels climate Superfund laws as “monetary-extraction scheme[s]” that violate federal law in “multiple ways.” In a press release issued the same day, Attorney General Pam Bondi described the statutes as “ideologically motivated laws” that threaten “economic and national security.”

The lawsuits allege that the Vermont CSA and NY CCSA are unconstitutional on numerous grounds. The federal government argues that the statutes violate the Supremacy Clause of the Constitution because they are preempted by the federal Clean Air Act’s regulation of GHG emissions — an assertion commonly used to challenge state attempts at addressing climate change. The federal government further argues that these state Superfund laws violate the Fourteenth Amendment’s guarantee of Due Process through their unlawful exercise of “extraterritorial jurisdiction.”  Taking aim at the statutes’ imposition of liability on specific entities for global GHG emissions, the government alleges that the laws violate both the interstate and foreign commerce clause by discriminating against interstate commerce within the United States and by imposing penalties that burden foreign commerce. Each complaint notes that “multibillion-dollar cost recovery demands” under the Vermont CSA and NY CCSA would be imposed for extraction and refining activities that occur “almost exclusively in States other than” Vermont and New York. Lastly, noting that climate change is a “uniquely international problem,” the government alleges that the Vermont CSA and NY CCSA violate the constitutional Foreign Affairs Doctrine by infringing on the federal government’s authority over foreign policy. Both lawsuits seek a permanent injunction of the applicable climate Superfund act as well as a declaration that the laws are unconstitutional and unenforceable.

Other Legal Challenges

The federal lawsuits are just the latest in a series of legal challenges facing climate Superfund laws. The U.S. Chamber of Commerce (“Chamber”) and American Petroleum Institute (“API”) sued Vermont over the Vermont CSA in December 2024 on preemption and other constitutional grounds. In February 2025, twenty-two states and several industry groups, including the Chamber and API, brought two separate challenges against the NY CCSA in federal court, alleging many of the same claims as the Vermont lawsuit. All three challenges are currently pending.

Other states are also facing scrutiny from the federal government regarding their climate change policies. In tandem with the suits against New York and Vermont, the Trump administration also filed suits against Michigan and Hawaii aiming to block them from bringing nuisance suits seeking damages for alleged climate harms against fossil fuel companies. These actions may be part of the administration’s broader strategy to push substantive issues on climate tort litigation in front of the U.S. Supreme Court. Earlier this year, the Supreme Court declined to consider a pair of cases brought by local governments regarding whether state tort claims against fossil fuels companies are preempted by federal environmental law.¹ While the U.S. Supreme Court held several years ago² that federal common law climate-related claims were preempted by the federal Clean Air Act, that case did not address state tort law or consumer protection claims. In fact, only one court — the Second Circuit — has determined that state common law climate-related claims are preempted by federal law.³

Takeaways

These legal challenges continue the Trump administration’s scrutiny of past climate change regulations and policies, especially as they relate to energy production. As we previously discussed, the Trump administration has made efforts to decrease the role of climate change considerations in federal environmental reviews and has directed the Environmental Protection Agency (EPA) to consider rescinding the agency’s 2009 GHG “Endangerment Finding,” which has underpinned many of the EPA’s later climate regulations. Also, the Securities and Exchange Commission recently voted to end its defense of its controversial climate-related disclosure rule. Ultimately, the question of to what extent states can seek to regulate or otherwise impose liability on certain entities for alleged climate-related impacts may not receive any clarity until the U.S. Supreme Court weighs in on these issues. However, until that clarity comes companies should continue to monitor or prepare to comply with such laws pending the outcome of any legal challenges.

We will continue to monitor challenges to state-level climate laws and regulations and keep clients apprised of relevant updates. Please reach out to your Vinson & Elkins team to discuss these matters and their implications for your business.

¹ City and Cnty. of Honolulu v. Sunoco LP, 537 P.3d 1173 (Haw. 2023), cert. denied, Sunoco LP v. Honolulu, 2025 WL 76706 (U.S. Jan. 13, 2025); cert. denied, Shell PLC v. Honolulu, 2025 WL 76704 (U.S. Jan. 13, 2025).

² Am. Electric Power Co. v. Connecticut, 564 U.S. 410 (2011).

³ City of New York v. Chevron Corp., 993 F.3d 81, 92 (2d Cir. 2021).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.