New ‘Climate Superfund’ Laws Face Widening Legal Challenges

Vermont made history last year when it enacted the country’s first climate superfund law. It’s designed to let the state recover money from fossil fuel companies to help pay the rising costs of climate change.

If the law can survive intensifying legal challenges, that is.

On Thursday, the Justice Department filed federal lawsuits against Vermont and New York, the only other state to have enacted a climate superfund law, arguing that the measures were “a brazen attempt to grab power from the federal government” and force others to pay for the states’ infrastructure spending.

Hours later, West Virginia’s attorney general, John B. McCuskey, announced that he was leading another challenge to Vermont’s law, saying the measure would “fine America’s coal, oil and natural gas suppliers into oblivion.”

Mr. McCuskey had already filed a similar lawsuit against New York’s law, which seeks $75 billion from oil and gas companies over the next 25 years. On Thursday, he said Vermont’s version might be “even more dangerous” because it has no monetary cap.

He and 23 other attorneys general are seeking to join a lawsuit filed late last year by the U.S. Chamber of Commerce and the American Petroleum Institute, an industry group, in federal court in Vermont.

West Virginia is a major producer of natural gas and coal. Its complaint argues that the activities of fossil-fuel companies are legal and that “Vermont seeks to have its cake and eat it too, by both reaping the benefits of affordable and reliable fuel, yet penalizing the entities that help produce such fuel.”

The climate superfund laws are modeled on the federal Superfund program to clean up hazardous waste sites. Under that program, which has been in existence for decades, old waste dumps or contaminated industrial sites are cleaned up and the companies that contributed to the contamination must help pay the cleanup bill.

The new climate superfund laws are based on the fact that the burning of fossil fuels, which produces planet-warming carbon dioxide and other gases, is the main driver of climate change. So the laws allow states to seek money from fossil fuel producers to help cover the costs of global warming. Similar bills are gaining momentum in several other states, including California, New Jersey and Massachusetts.

Patrick Parenteau, an environmental law expert at Vermont Law and Graduate School, called the Justice Department cases “virtue signaling” and said he expected them to be dismissed. In the Chamber of Commerce lawsuit, he expects the state to argue that the lawsuit is premature, since officials are still in the midst of deciding how to apply the law, and that the chamber has no standing to sue since it is not directly affected by the measure.

Julie Moore, secretary of the Vermont Agency of Natural Resources, who is named in both filings, said her office was reviewing the details of the cases. She added that the Justice Department action was “not unexpected” given President Trump’s April 8 executive order, “Protecting American Energy From State Overreach.”

That order specifically cited the new Vermont and New York laws, calling them akin to extortion and saying they threaten the country’s economic and national security.

Letitia James, the attorney general of New York, who is named in the Justice Department lawsuit, said Thursday that the climate superfund law “ensures that those who contributed to the climate crisis help pay for the damage they caused.”

Meghan Greenfield, an environmental lawyer who previously worked at the Justice Department and Environmental Protection Agency and is now a partner at the firm Jenner & Block, said legal challenges to such a novel law were inevitable. Some of the arguments being used against the measures are also new and untested in this context, like one about “equal sovereignty” between states, which is the idea that they should be treated uniformly by the federal government, she said.

“It’s kind of hard to predict how it all will go, because we’re looking at different layers here, a new kind of law, and new kinds of challenges against that law,” she said.

She said she expected further challenges to more traditional state climate laws as well, such as New York and California measures that specify how much of a state’s power supply should come from clean energy.