For the second time in less than four weeks, a federal judge has ruled that New York’s Climate Change Superfund Act (“the Climate Act”) is unconstitutional. On September 23, 2026 in United States v. New York (SDNY), Senior District Judge P. Kevin Castel granted summary judgment for the federal government, permanently enjoining enforcement of the Climate Act. The case was one of a number of suits related to state and local efforts to obtain financial compensation from the fossil fuel industry for climate change-related harms. 

Enacted in December 2024, the Climate Act was intended to retroactively hold fossil fuel producers responsible for damages if their operations had resulted in more than a billion tons of emissions attributable to fossil fuels between 2000 and 2024. It sought to require them to pay a proportional share of a fixed $75 billion total in adaptation infrastructure project costs. The Climate Act was modeled after the 1980 Comprehensive Environmental Response, Compensation, and Liability Act.

The Court found that the federal government had standing to sue the state based on its sovereign authority “to create and enforce a regulatory scheme pursuant to the Clean Air Act” and its sole power over foreign affairs. 

The Court then analyzed the merits of those two claims. Applying the Second Circuit’s decision in City of New York v. Chevron Corp., the Court held that claims related to interstate greenhouse gas emissions have historically been governed by federal law, and that state law may operate in this area only to the extent the Clean Air Act authorizes it. Because the Clean Air Act contains no such authorization, and because imposing strict liability on fossil fuel producers for worldwide emissions operates as a de facto regulation of those emissions, the Court held that the Climate Act is preempted.

Next, Judge Castel agreed with the federal government that the Climate Act attempted to regulate harms of climate change which are a “uniquely international problem” and thus not an area of traditional state responsibility. He applied the Second Circuit’s position that climate change is not a problem that the United States can address alone and which Congress and the executive have acted on in international forums. The Court concluded that allowing the Climate Act, as applied to the foreign activities of fossil fuel producers, to go into effect would intrude on a field reserved to the federal government under the foreign affairs doctrine.

The Court also noted that its holding aligns with that of Chief Judge Sannes of the Northern District of New York in the prior case challenging the Climate Act. See West Virginia v. James, 25-cv-168 (BKS), 2026 WL 2568355 (NDNY Aug. 31, 2026).

The Court did not reach the federal government’s other claims, having decided the case on Clean Air Act and foreign affairs grounds, and dismissed them without prejudice.

The New York statute is part of a broader push from state governments to retroactively hold fossil fuel producers responsible for the harms of climate change through state law and the court system. Vermont has also enacted a climate superfund law, while Hawaii sued major fossil fuel companies seeking damages for climate harms and Michigan brought an antitrust suit alleging major oil companies conspired to suppress renewable energy. A federal judge dismissed Michigan’s suit on September 22, but the Vermont law remains in effect pending the resolution of a challenge, and the Hawaii case is ongoing. 

Local governments have also been testing the bounds of their ability to bring suits seeking money damages from fossil fuel companies for previous emissions, with the Supreme Court holding oral argument in Suncor Energy (USA) Inc. v. County Commissioners of Boulder County on October 5, 2026. The core issue in Suncor stands to reshape the landscape for state and local climate litigation. It will tackle whether federal law precludes state-law tort claims seeking damages from fossil fuel companies for climate change harms and whether the Supreme Court has jurisdiction to hear the case.   
 
As the Trump Administration keeps walking back federal climate policy, states are continuing to search for and test creative legal avenues to cope with climate change, with New York’s now-enjoined Climate Act representing one such strategy.  The two recent decisions regarding the New York law suggest that the state and local governments face an uphill battle. If the Supreme Court finds it has jurisdiction to decide Suncor, that case could provide a definitive answer.