A federal judge expressed skepticism about the constitutionality of New York’s Climate Change Superfund Act in a case being closely watched in New Jersey where a similar bill is being pushed to assess fossil fuel companies billions of dollars, two news outlets are reporting Friday.
In a hearing in Syracuse on motions and related legal arguments, Chief Judge Brenda Sannes of the U.S. District Court for the Northern District of New York had tough questions on Thursday for state attorneys over whether the 2024 New York Climate Change Superfund Act is preempted by federal law, according to reports from Politico and Bloomberg Law.
New York is one of only two states that have enacted a Climate Superfund Act to ostensibly finance climate adaptation projects, but neither have taken effect due to multiple legal challenges. New Jersey and other states are considering similar bills, which NJBIA and others oppose because large energy companies would be retroactively assessed billions of dollars for having provided a legal product in compliance with strict environmental permits.
Both Politico and Bloomberg reported that Chief Judge Sannes appeared receptive to the Trump administration’s arguments that New York is attempting to regulate emissions and energy production that occurred beyond its borders.
According to Politico, Sannes asked the attorneys for the State of New York if it was true the law applies to greenhouse gas emissions worldwide, not just in New York. She noted that when legislators wrote the law, they put together a list of “entities all over the world.”
“So, doesn't this act implicate the conflicting rights of states and our relations with federal nations?” Sannes asked, according to Politico.
Sannes, however, did not rule from the bench on Thursday; a written decision is expected later.
The U.S. Justice Department and U.S. Environmental Protection Agency are plaintiffs in this case, which is separate from other legal challenges filed by 22 Republican-led states and business and energy industry groups arguing the New York law is unconstitutional and will ultimately increase energy costs for consumers.
New Jersey policymakers are closely following the New York case. A similar climate change superfund bill in New Jersey stalled on the last legislative voting day before the Senate and General Assembly went into summer recess. The New York law assesses fossil fuel companies $75 billion over 25 years for the 2000-2018 emissions period, and the New Jersey legislation would assess companies $50 billion over 20 years for an emission period of 1995-2024.
NJBIA is the leading voice of opposition to the New Jersey legislation, which lawmakers recently renamed the “Polluters Pay to Make New Jersey More Affordable Act.” NJBIA argues that the bill is unconstitutional, would be tied up for years in costly litigation, and would increase costs for consumers, especially if numerous other states enact these types of laws.
A ruling that strikes down New York’s law, or allows it to proceed, will have significant implications for the future of the New Jersey legislation, according to NJBIA Deputy Chief Government Affairs Officer Ray Cantor.
NJBIA has also consistently sounded the alarm on the costly and protracted legal challenges that will await the state should the Climate Superfund Act be passed into law.
The lawsuits sought to recover damages based on allegations they deceived consumers and the public about the dangers associated with their fossil fuel products, and those products were tied to the emissions of a substantial amount of greenhouse gases.
But the Maryland Supreme Court, by a 6-1 vote, stated in no uncertain terms that the U.S. Supreme Court has held that cases involving the regulation of interstate pollution arise under federal law only.
"No amount of creative pleading can masquerade the fact that the local governments are attempting to utilize state law to regulate global conduct that is purportedly causing global harm," Maryland Supreme Court Justice Brynja Booth wrote.
