Federal Government Sues Four States Over Climate Superfund Laws and Climate Change Litigation

The U.S. Department of Justice (DOJ) has filed a series of federal lawsuits against four states—New York, Vermont, Michigan and Hawaii—alleging that recent legislative and enforcement efforts to hold fossil fuel companies financially responsible for climate change unlawfully interfere with federal authority. 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 across all four cases is consistent: that state efforts to assign liability for global greenhouse gas (GHG) emissions violate the Constitution, are preempted by the Clean Air Act (CAA), and interfere with the federal government’s exclusive authority over interstate commerce 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. Of those, two states—New York and Vermont—have enacted climate superfund laws. 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 does not set a fixed dollar amount; instead, it directs the State Treasurer and the Agency of Natural Resources to calculate the state’s total climate-related costs. 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 typically assert state tort-law claims—such as public nuisance, failure to warn, fraud and consumer protection violations. These suits have generally focused on two core allegations: first, that fossil fuel companies misled the public and policymakers about the climate risks associated with fossil fuel use and GHG emissions; and second, that fossil fuel products have substantially contributed to the costs of climate-related events.

A central legal issue has been whether these claims belong in state or federal 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. In March, the Court also denied a request by 19 states, led by Alabama, to block five other states—California, Connecticut, Minnesota, New Jersey and Rhode Island—from pursuing climate lawsuits. 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:

1. Preemption under the Clean Air Act: The complaint argues that the CAA displaces state authority to regulate interstate and GHG emissions. Citing Supreme Court precedent—including Massachusetts v. EPA, AEP v. Connecticut, and City of New York v. Chevron—the DOJ asserts that Congress delegated to the U.S. Environmental Protection Agency the exclusive authority to determine whether and how to regulate GHG emissions. According to the complaints, both the climate superfund statutes and the contemplated tort lawsuits impermissibly interfere with this federal regulatory scheme.
2. Unconstitutional Extraterritorial Regulation: 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.
3. Violations of the Commerce Clause: 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.
4. Foreign Affairs Preemption: 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
The lawsuits come amid a broader shift in federal climate and energy policy under the Trump administration, which has emphasized domestic energy production. They were filed just weeks after the issuance of Executive Order 14260, Protecting American Energy From State Overreach, which is quoted in the opening 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. If successful, the challenges could significantly curtail the ability of states to seek damages or recover costs associated with climate change under state law, whether through tort litigation or legislative action. 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 continue to monitor these cases and related developments closely and will provide updates as the litigation progresses.