Emerging Litigation PodcastProduced by HB Litigation
Interviews with leading attorneys and other subject matter experts on new twists in the law and how the law is responding to new twists in the world.
Interested in contributing an article? Email us at Editor@LitigationConferences.com.
22 States Sue New York Over Climate Fund, Calling It an ‘Unconstitutional Shakedown’
By: Tim Zyla
The lawsuit against New York’s Climate Change Superfund Act underscores a high-stakes battle over state authority, federal oversight, and the financial burden placed on energy producers in the name of climate accountability.
A coalition of 22 states, led by West Virginia, is suing New York just over two months after Governor Kathy Hochul signed a law requiring energy producers to pay $75 billion to cover damages caused by climate change.
The lawsuit, filed in the U.S. District Court for the Northern District of New York in Albany, names New York Attorney General Letitia James, Interim Commissioner of the State Department of Environmental Conservation, and Acting Tax Commissioner of the State Department of Taxation and Finance Amanda Hiller as defendants.
The states seek declaratory and injunctive relief, arguing that New York’s fund attempts to “seize control over the makeup of America’s energy industry.” The suit claims the fund was politically motivated and seeks to impose “tens of billions of dollars of liability on traditional energy producers” while using the money to “subsidize certain New York-based ‘infrastructure’ projects, such as a new sewer system in New York City.”
Legal Arguments
The plaintiffs argue that New York’s law violates multiple constitutional provisions and oversteps federal authority:
🔹 Commerce Clause (Article I, Section 8) – The lawsuit claims the law retroactively imposes financial penalties on out-of-state companies, effectively regulating businesses beyond New York’s jurisdiction.
🔹 Clean Air Act (42 U.S.C. § 7401(a)(3)) – While states play a role in controlling air pollution, the plaintiffs assert that the federal government holds primary authority over interstate emissions standards.
🔹 Supreme Court Precedent – The lawsuit cites Okla. Tax Comm’n v. Jefferson Lines, Inc. and Kansas v. Colorado, arguing that states cannot legislate where Congress has chosen not to act or impose policies on other states.
🔹 State Tariffs Violation – The Climate Change Superfund Act functions as a form of state tariff, which Comptroller of Treasury of Md. v. Wynne identified as “one of the chief evils that led to the adoption of the Constitution.”
🔹 Due Process Clause (14th Amendment) – The law is allegedly “unreasonable” and “arbitrary” because it seeks to impose retroactive penalties on a select group of energy producers who lawfully extracted and refined fossil fuels.
🔹 Equal Protection Clause (14th Amendment) – The plaintiffs argue the law favors New York-based energy producers while penalizing out-of-state companies, making it discriminatory.
🔹 Eighth and Fifth Amendments – The lawsuit claims the law imposes excessive penalties and violates due process protections.
Additionally, the plaintiffs argue that the Clean Air Act only allows lawsuits from the state where the pollution originates, citing City of New York v. Chevron Corp.
Disputed Payment Structure
The lawsuit challenges the fund’s payment structure, which requires energy companies to pay $3 billion per year for 25 years to reach $75 billion. The plaintiffs highlight a statement from New York Assemblyman Jeffrey Dinowitz, who admitted the assessment rate was set arbitrarily, stating:
“I didn’t want it to be too little, (and) didn’t want it to be too much.”
The lawsuit also references Dinowitz’s remarks after the bill’s passage, where he claimed the law had “set a precedent for the nation to follow.” The states argue this confirms their concern that other states may adopt similar measures, creating a patchwork of conflicting state-level climate policies that could burden energy companies and disrupt national commerce.
Motion to Dismiss and Support for the Fund
A pro se West Virginia resident has filed a request for dismissal with prejudice, arguing that the states leading the lawsuit are violating the U.S. Constitution. The filing claims that the states are breaching:
🔹 Article VI, Clause 3 – Oath of state officers.
🔹 Article I, Section 10 – Prohibiting states from making agreements without Congressional approval.
🔹 Article IV, Section 1 – Full Faith and Credit Clause, requiring states to recognize New York’s laws.
The anonymous filer asserts that New York acted in the best interest of public health, whereas the suing states are representing “unnatural entities” (fossil fuel corporations) that may be harming U.S. citizens. The request also calls for a $50 million fine against each plaintiff state, with funds directed to the Climate Change Superfund.
Furthermore, the filing argues that Congress has not yet provided guidance on how states should enforce such laws, making the lawsuit premature.
The Lawsuit’s Demands
The coalition of states is requesting the court:
🔹 Declare the Climate Change Superfund Act unconstitutional and preempted by federal law.
🔹 Block New York officials from enforcing or implementing the law.
🔹 Award the plaintiffs legal fees and costs.
🔹 Grant any other relief deemed necessary and appropriate.
As this legal battle unfolds, the case could set a major precedent for how states hold fossil fuel companies accountable for climate-related costs. If upheld, the law could pave the way for other states to adopt similar measures, while a ruling against New York could curtail state-level climate initiatives and reinforce federal control over emissions regulations.
📄 Read the full complaint here: Final Superfund Complaint
Tim Zyla is a lifelong journalist working as managing editor of two daily newspapers in Pennsylvania and is an avid follower of criminal law and law enforcement. He may be reached at tim@timzyla.com.
