Four States are being sued by the federal government for climate superfund laws and climate change litigation

The lawsuits, filed on April 30 and May 1, challenge two distinct forms of state-led climate action: (1) enacted climate superfund statutes in New York and Vermont; and (2) announced plans by Michigan and Hawaii to bring climate change litigation against fossil fuel companies under state tort law. The DOJ’s theory in all four cases is the same: state efforts to assign responsibility for global greenhouse gas emissions (GHGs) violate the Constitution, are overridden by the Clean Air Act, and interfere with federal authority over interstate trade and foreign relations. In each case, the federal government seeks declaratory judgments that the state laws or enforcement actions are unconstitutional, along with injunctive relief barring their implementation or prosecution.

The Climate Superfund Landscape

Twelve states have introduced legislation that would require certain fossil fuel producers and refiners to pay billions into state-administered funds designated for climate adaptation and resiliency infrastructure. New York and Vermont are two of the twelve states that have enacted laws on climate superfunds. Although details vary, the statutes generally impose retroactive, strict liability for emissions tied to fossil fuel extraction and refining activities occurring across the globe, with individual assessments based on each entity’s estimated historic contributions to global greenhouse gas (GHG) emissions.

New York’s Climate Change Superfund Act mandates that fossil fuel companies collectively pay $75 billion into a state-managed fund. Vermont’s Climate Superfund Act doesn’t set a dollar amount, but instead directs the State Treasury and the Agency of Natural Resources (ANR) to calculate the total climate-related costs for the state. Both states will then issue cost recovery demands proportionally based on each responsible party’s share of emissions.
Both laws–as well as the legislation proposed in several other states–expressly include emissions resulting from global activity, not limited to conduct within state borders–an approach that has drawn sharp criticism and is now at the center of pending federal constitutional challenges.

The Climate Litigation Landscape

Over the past several years, a growing number of states and municipalities have turned to the courts in an effort to hold fossil fuel companies liable for the costs associated with climate change. These cases usually assert state tort law claims, such as public nuisance, failure of warning, fraud, and consumer protection violations. The central legal question has been whether these claims should be heard in federal or state court. Fossil fuel defendants have consistently sought to remove these cases to federal court–arguing that they implicate federal common law, raise federal questions or relate to activities on federal lands–while plaintiffs have argued for state court jurisdiction.

Just last month, the U.S. Supreme Court declined to hear petitions by oil companies seeking to remove climate change lawsuits brought by the state of Rhode Island and several municipalities and counties in California, Colorado, Hawaii and Maryland to federal court. The Court denied a request from 19 states led by Alabama to stop five other states – California, Connecticut, Minnesota and New Jersey – from pursuing climate suits. Earlier this year, the Court declined to review a challenge to a Hawaii Supreme Court decision allowing Honolulu’s climate case to proceed under state law.
These underlying cases each remain pending in state courts and are generally still in the early stages of litigation.

Federal Government’s Claims

Across the four lawsuits filed against New York, Vermont, Michigan and Hawaii, the U.S. Department of Justice raises a common set of constitutional and statutory challenges:

Preemption under the Clean Air Act:

The complaint argues that the CAA displaces state authority to regulate interstate and GHG emissions. Citing Supreme Court precedents, including Massachusetts v. EPA and AEP v. Connecticut and City of New York v. Chevron, the DOJ asserts Congress delegated the exclusive authority for determining whether and how to regulate GHG emission to the U.S. Environmental Protection Agency. According to the complaints, both the climate superfund statutes and the contemplated tort lawsuits impermissibly interfere with this federal regulatory scheme.
Unconstitutional Extraterritorial Regulation:

1. The lawsuits contend that both the enacted and planned state actions attempt to impose liability for conduct occurring outside the states’ borders–in many cases around the globe. The DOJ argues this effort to collect damages or “economic sanctions” for interstate and global conduct violates the Constitution’s limits on state authority and the Due Process Clause of the Fourteenth Amendment.Violations of the Commerce Clause:
2. The complaint asserts that these state efforts run afoul of both the Interstate and Foreign Commerce Clauses by imposing discriminatory and undue burdens on interstate and foreign commerce by targeting fossil fuel extraction and refining that occurs worldwide.Foreign Affairs Preemption:
3. Finally, the complaints argue that both the state statutes and the anticipated litigation interfere with the federal government’s foreign policy on GHG regulation and its ability to manage its relations with foreign countries on matters such as GHG liability, trade policy, and exports and imports of fossil fuels.Implications
4. The lawsuits come amid a broader shift in federal climate and energy policy under the Trump administration, which has emphasized domestic energy production. The lawsuits were filed only a few weeks after Executive Order 14260 Protecting American Energy from State Overreach was issued. This order is quoted in the first paragraph of each complaint. That order directed the Attorney General to review state climate superfund laws and climate change litigation, and authorized her to take legal action to block their enforcement or continuation.Another executive order quoted in the complaints–Executive Order 14156, Declaring a National Energy Emergency–describes state-led climate liability efforts as “an unusual and extraordinary threat to our Nation’s economy, national security, and foreign policy.” The complaints also reference the administration’s broader policy goal of reducing federal commitments to international climate frameworks, including withdrawal from the Paris Agreement.

From a legal standpoint, these cases raise fundamental questions about the limits of state authority to craft climate-related remedies in the absence of a comprehensive federal liability regime. The challenges could severely limit the ability of the states to recover damages or costs associated with climate changes under state law. This would be true whether they were pursuing tort litigation or legislative actions. Conversely, if courts uphold the states’ authority to proceed, the rulings could pave the way for expanded use of state tort claims and superfund-style statutes as tools for pursuing climate liability against fossil fuel companies.
What’s Next

Each case is in early stages, with states expected to move to dismiss, including on grounds that the suits are premature and interfere with state sovereign authority. Pillsbury will monitor these cases closely and provide updates as the litigation advances.

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