New York's plan to charge fossil-fuel producers $75B for climate change damages is struck down

New York's attempt to make fossil fuel-producing industries pay into a $75 billion fund to repair the damage wrought by climate change was struck down by a federal judge, who said the sweeping law reaches beyond a state's responsibility and into an area of federal interest.

The law, signed in 2024 by Democratic Gov. Kathy Hochul, was challenged in court by a range of fossil fuel interests, business associations including the U.S. Chamber of Commerce, 22 Republican state attorneys general and the U.S. Environmental Protection Agency.

U.S. District Judge Brenda Sannes ruled Monday that the state's climate law operated on territory governed by federal law for over a century and sought damages for the cumulative impact of conduct that has occurred nearly everywhere on Earth.

That, she wrote, conflicts with the need for a uniform national energy and environmental policy, and is otherwise not authorized by the federal Clean Air Act, which designates the EPA as the primary regulator of planet-warming greenhouse gas emissions.

Separately, trying to collect damages from foreign fossil fuel producers is preempted by foreign affairs doctrine, making it unconstitutional, Sannes wrote.

Climate change activists urged Hochul's administration to appeal. A spokesperson for Hochul's administration said “taxpayers shouldn’t have to foot the bill for damages caused by polluters” and that the administration was reviewing the decision to determine its next steps.

President Donald Trump's administration previously challenged Michigan, Hawaii and Vermont over similar laws after he declared a “ national energy emergency ″ and ordered his attorney general to take action against states that may be illegally overreaching their authority in how they regulate energy.

In a statement, the Department of Justice said it is “delivering on President Trump’s order to protect American energy from state overreach.”

“New York’s law would have expropriated $75 billion from energy companies around the world during an energy emergency and in direct defiance of American foreign policy and federal law,” Adam Gustafson, a principal deputy assistant attorney general, said in a statement.

New York's law had required companies responsible for substantial greenhouse gas emissions to collectively pay $3 billion a year over 25 years into a fund for infrastructure projects meant to repair or avoid future damage from climate change.

Lawmakers approved the bill to force big oil and gas companies to contribute to the cost of repairs inflicted by extreme weather events and to underwrite resiliency projects such as coastal wetland restoration and upgrades to roads, bridges and water drainage systems.

The biggest emitters of greenhouse gases between 2000 and 2018 were to be subjected to the fines.

Associated Press reporter Anthony Izaguirre in New York contributed to this report.

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