New York Judge Sides with South Carolina on $75 Billion Climate Shakedown

New York’s Climate Superfund Act, passed in 2024, sought to require American energy producers to pay roughly $3 billion per year for 25 years based on their emissions from 2000–2024. This would result in $75 billion being paid to reverse alleged environmental damages caused by these emissions. South Carolina was part of a coalition of 22 states that led the charge against the New York act.

Just a few days ago, on August 31, 2026, the United States District Court for the Northern District of New York ruled that the Climate Superfund Act was unconstitutional. The Court agreed with plaintiffs in West Virginia, et al. v. Letitia James, et al. that the Act infringed on the rights of states and could create major consequences for consumers. 

What is New York’s Climate Superfund Act?

The Climate Superfund Act is modeled after the original Superfund, the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Enacted in 1980, CERCLA empowered the Environmental Protection Agency (EPA) to hold polluters accountable for cleaning up contaminated sites. 

Similarly, New York’s Act targeted oil and gas companies that produced emissions. Proponents argued that this would take the burden off of taxpayers and allow the state government to fund environmental projects, such as restoring coastal wetlands and assisting with natural disasters. However, many states, including South Carolina, were alarmed that this was an overreach of state power because only the federal government has the power to regulate greenhouse gases. In the end, federal district Judge Brenda K. Sannes found this act to be unconstitutional according to the federal Clean Air Act and federal Foreign Powers.

What is the Federal Clean Air Act and Federal Foreign Powers?

The Clean Air Act gives the Environmental Protection Agency the power to manage air emissions, while the federal constitutional Foreign Affairs Power prevents states from engaging in international relations or establishing their own foreign policy. 

Together, these laws establish that the federal government, rather than states, can require companies to pay for environmental damages caused by pollution. Additionally, because many of these companies are nationally or internationally based, a state cannot force an energy producer to pay for any environmental effects; only the federal government can do this. 

New York is not the only state to try to punish large energy companies for their alleged environmental impact. 

Other States’ Climate Superfund Acts

In 2024, Vermont passed Act No. 122 which forces companies to pay Vermont for their share of greenhouse gas emissions during the period of January 1, 1995 to December 31, 2024. Vermont will not begin charging the responsible parties until 2028. In the interim, the state will determine the funding needed for reparations and prevention, as well as which companies will bear the cost.

Since the passage of the Vermont act, the U.S. Chamber of Commerce, the American Petroleum Institute, and the Department of Justice have sued the state. The court’s decision on this trial is still pending. 

Department of Justice Attorney Riley Walters argues, “It’s impossible to trace in-state harm to any particular source of greenhouse gas emissions, let alone to the fossil fuel production that is even further down along the alleged causal chain. There is not a direct and traceable connection between oil that’s extracted in Texas or in Saudi Arabia and a flood or some other weather event that takes place in Vermont.”

How Could this Act Affect South Carolinians?

Not only are their laws an overreach of state power, Vermont and New York’s acts could have a devastating effect on American consumers. 

Marty Durbin, president of the Global Energy Institute, explains, “Vermont’s attempt to impose massive retroactive penalties on energy producers will be disastrous for American families. Reliable, affordable energy helps power economic growth and enhances the quality of life for American families and communities. It defies logic that Vermont would pursue gigantic penalties from companies that are meeting consumer and business demand for this essential resource.”

Others calculate that it would be American consumers who would have to bear the cost that energy producers would face. South Carolina is supported by many major energy companies that also serve other states. If Vermont’s Act is not found unconstitutional, then South Carolinians could be paying for the choices made by other states.

How Are Other States Preventing Overreach?

Many states across the United States are not sitting back and allowing Vermont and New York to create laws that negatively affect them. In 2026, Utah, Oklahoma, Louisiana, Tennessee, and Iowa passed laws that protect energy producer companies from such wrongheaded legislation. These laws ensure that companies cannot be sued as long as the products are being used to promote access to affordable fossil fuels and encourage economic development. This does not mean that these states cannot hold the companies liable if they violate a state’s restrictions or limitations of greenhouse gases. Instead, people cannot blame an energy company for an alleged climate-related injury or destruction of property unless the company violates preexisting law. 

The Future of the Energy Industry

The question here is not whether energy producers should be punished or regulated for unlawful actions and widespread environmental destruction. Protecting the environment is an important consideration for citizens and lawmakers, and we have laws on the federal books to do so. 

The real question is whether states have the power to punish national and international energy producer companies that market legitimate products essential to the American economy. 

Thankfully, in this case, a New York federal judge actually got it right. We hope her decision holds.