The state of New York attempted to make energy producers pay billions of dollars for lawful activities that occurred across the country and around the world.
Yesterday, the U.S. District Court for the Northern District of New York said no.
The court correctly recognized that one state cannot dictate national energy and environmental policy or impose its policy choices beyond its borders.
In a major victory for American energy producers and the Constitutional limits on government power in West Virginia, et al. v. Letitia James, et al., the U.S. District Court for the Northern District of New York granted summary judgment to Mountain States Legal Foundation and our co-plaintiffs, ruling that New York could not retroactively penalize energy producers across the world in the name of climate policy.
MSLF was able to represent the Gas and Oil Association of West Virginia in this challenge of New York’s Climate Change Superfund Act, alongside 22 states as well as coal and energy organizations and companies. New York cannot penalize energy producers across the world for keeping heat on in the winter and power on year-round in an attempt to bank roll and further anti-use principles.
So, what exactly was New York trying to do?
New York’s Climate Change Superfund Act sought to make energy producers financially responsible for the alleged costs of climate change.
The Act authorized New York to demand up to $75 billion from energy companies based on “carbon” emissions dating back decades. And those emissions did not have to occur in New York. The companies themselves did not even have to operate in New York.
In effect, New York was attempting to reach across state lines and make energy producers pay for lawful activities that occurred decades ago, often thousands of miles away.
Imagine following every rule, paying every required fee, and operating legally for decades—only to have a state come back years later and say you now owe billions of dollars because you made sure families had heat in the winter and power year-round. That is exactly what New York’s law attempted to do to the energy producers that power the world.
Why does this matter?
Because this case was about more than one state or one law. It was about ensuring that a single state cannot use its laws to impose its anti-use policy choices on businesses legally operating across the country.
If New York were allowed to do that, there would be little stopping other states from creating their own systems of retroactive climate liability, with each asking the energy producers of the world to bankroll and further their agendas.
The impacts would affect the cost and reliability of the energy Americans depend on every day and threaten the economies of states whose workers and communities depend on energy production.
One state should not be able to set the rules for an entire national industry. One state should not be able to use an industry to fund radical policy choices.
That is why MSLF stepped in.
And yesterday, the court agreed.
MSLF and our co-plaintiffs argued that New York’s law conflicts with federal law and improperly attempts to regulate conduct extending far beyond New York’s borders.
The court agreed.
Specifically, the court concluded that the Clean Air Act does not authorize New York’s demands for costs associated with domestic, transboundary greenhouse-gas emissions. The court further concluded that any demand directed at a foreign fossil fuel producer would be preempted under the foreign affairs doctrine.
In simple terms, New York cannot create its own system of climate liability when federal law does not give it the authority to do so.
This is a victory for the people who produce the energy that powers our homes, businesses, factories, and communities. It is a victory for states that depend on energy production and have the right to develop their natural resources.