Texas Attorney General Ken Paxton and a coalition of 21 attorneys general have filed a federal lawsuit challenging New York’s new law that would force fossil-fuel companies to pay billions for emitting greenhouse gas.
And some experts predict similar litigation against other states.
According to the lawsuit, the New York law titled the Climate Change Superfund Act would retroactively fine coal, natural gas and oil producers $75 billion for emissions. New York Gov. Kathy Hochul signed it into law on Dec. 26, 2024, with funds due in 2026.
“This liability could be devastating to traditional energy producers. Indeed, the ruinous liability that the Act promises—especially when paired with similar efforts that might arise in other states—could force coal, oil, and natural gas producers to shutter altogether,” according to the lawsuit.
Other states involved in the lawsuit include West Virginia, Alabama, Arkansas, Georgia, Idaho, Iowa, Kansas, Commonwealth of Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah and Wyoming. Industry groups, such as the West Virginia Coal Association, Alpha Metallurgical Resources Inc. and the Gas and Oil Association of West Virginia Inc. and America’s Coal Associations are also parties to the suit.
The suit against New York is part of a pattern, and more states are expected to file similar climate change legislation, said Ashleigh Myers, partner with Pillsbury Winthrop Shaw Pittman in Austin, Texas.
“New York actually started the trend,” Myers said. “They were the first to have introduced this kind of legislation but Vermont beat them to the punch and passed their legislation first. There are talks that California is going to reinvigorate its prior efforts to adopt a similar law.”
Others states considering similar climate change legislation include Maryland, Massachusetts, Tennessee and New Jersey, Mysers said. There might be a few more, she said. These are in “various stages of development,” she said.
Myers said the New York legislation would only target big energy companies with “over 1 billion metric tons of greenhouse gas emissions.” The fines those companies pay to New York or Vermont could be passed on to energy ratepayers, she said.
The lawsuit against New York, filed on Feb. 6 in U.S. District Court in Albany, argues that state’s Climate Change Superfund Act violates multiple provisions of the U.S. Constitution, including the commerce clause, equal sovereignty, equal and due process protections.
“The Climate Change Superfund Act is an ugly example of the chaos that can result when States overreach,” according to the lawsuit.
The law seeks to impose fines on fossil fuel companies that released greenhouse gas emissions from 2000 to 2018. Proceeds from the fines would go to finance infrastructure projects in New York, such as its sewer system, according to the lawsuit. But the law also allegedly affects energy companies without operations in New York, according to Paxton.
“And rather than focusing on greenhouse-gas emissions released in New York, the Act punishes a small group of energy producers for global greenhouse gases emitted from all sources into the atmosphere from 2000 to 2018, “ alleges the lawsuit. “Yet coal, oil and natural gas were helping New York during that time. They helped keep the lights on in Albany, manufacture the steel that supported New York City’s iconic skyscrapers, and fuel the industry that keeps New York ports humming.”
“New York’s law is nothing more than an unconstitutional shakedown of vital American energy industries that form the bedrock of our national economic independence. In return for keeping the lights on and fueling our manufacturing, energy producers are being targeted for destruction by the left-wing policies of New York radicals,” Attorney General Paxton said in a news release.
The plaintiffs contend that regulation of interstate emissions falls under federal jurisdiction through the Clean Air Act, regulated by the U.S. Environmental Protection Agency, not individual state control.
The lawsuit names New York Attorney General Letitia James, Sean Mahar, the interim commissioner of the New York State Department of Environmental Conservation and Amanda Hiller, acting tax commissioner of the New York State Department of Taxation and Finance, as defendants. James, Maher and Hiller could not be reached for comment.
The New York law is the second state law focused on climate change and raising funds from fossil fuel producers. Vermont passed its Climate Superfund Act in May 2024. According to Climate Change in Vermont, an official state website, it “allows the state to recover financial damages from fossil fuel companies for the impacts of climate change on Vermont.”
