The Nickel Report

The U.S. Department of Justice (DOJ) recently filed four lawsuits against states related to specific climate change actions they have taken or planned to take. On April 30, 2025, DOJ preemptively sued Hawaii and Michigan to prevent both states from going forward with their stated intent to pursue legal action against fossil fuel companies for alleged harms caused by climate change and to declare those states’ claims unconstitutional. The following day, on May 1, 2025, DOJ sued New York and Vermont for their enactment of climate “superfund” laws, which create retroactive cost recovery claims on producers of fossil fuels, seeking to enjoin the enforcement of those statutes and to have them declared unconstitutional as well.

DOJ’s lawsuits come on the heels of President Trump’s April 8, 2025 Executive Order, Protecting American Energy From State Overreach. The Executive Order directs the DOJ to identify any and all laws “burdening” the use or production of domestic energy and to “expeditiously take all appropriate action to stop the enforcement of [the] laws.”

While state and local government initiated climate lawsuits have been ongoing through state courts for some time, the lawsuits filed by DOJ under this Administration are a new approach building the federal government’s “active and continuous” interest in maintaining its control over energy and climate policy. The four lawsuits allege the climate “superfund” laws and any state-based claims pertaining to climate-related damages are preempted by the comprehensive nature of the Clean Air Act. Similarly, DOJ avers that constitutional due process prevents the states from imposing extraterritorial liability for primarily out-of-state activity. 

DOJ additionally claims that the laws and lawsuits facially discriminate against interstate commerce and would impose substantial undue burden that would disrupt the national market for fossil fuels. Likewise, DOJ alleges violations of the Foreign Commerce Clause because the lawsuits and laws discriminate against foreign commerce and impose liability that is not fairly related to the services provided in the states. Lastly, DOJ claims the laws and lawsuits seek to regulate a “uniquely international problem” and undermine and interfere with U.S. foreign policy, which is exclusively in the purview of the federal government, and thus are preempted by the Foreign Affairs Doctrine. 

DOJ’s proactive strategy of filing original lawsuits to attack the four states’ actions puts the full weight of the federal government behind arguments that have been made by defendants in other cases. It also serves as a signal to other states that may be considering similar actions.  

Hawaii and Michigan Announced Climate Lawsuits

DOJ’s lawsuits against Hawaii and Michigan are notable for seeking to preemptively block the states from filing lawsuits against fossil fuel producers for alleged climate related damages. Attorneys General for both states had previously announced their intention to sue fossil fuel producers, but, at the time of DOJ’s filings, neither state had initiated any legal action. Subsequent to DOJ’s filings, Hawaii moved forward to file its lawsuit against seven oil and gas companies in the First Circuit Court in Honolulu.  

New York and Vermont Climate Superfund Laws

 Vermont was the first state to enact a climate “superfund” law, with New York quickly following suit. These laws claim to draw inspiration from  the federal Superfund law; however, they are very different from the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). They create retroactive liability for responsible parties but apply it to prior emissions of greenhouse gas (GHGs) into the environment by companies that have previously extracted or refined fossil fuels. The Vermont and New York laws explicitly establish strict liability on out-of-state sources of GHG emissions. 10 V.S.A. § 597(1); N.Y. Env’t Conserv. § 76-0103(2)(a).

Both statutes enable cost recovery claims on any entity engaged in the trade or business of extracting fossil fuel or refining crude oil and is determined to be responsible for one billion tons of global greenhouse gas emissions. 10 V.S.A. § 596(22); N.Y. Env’t Conserv. § 76.0101(20). Funds collected in response to cost recovery demands will be placed in a “climate superfund” to be used to pay for qualifying climate change adaptation projects and implement climate adaption action as identified by their respective agencies designated to oversee the funds.

Vermont’s statute covers GHGs from fossil fuels extracted or refined by a responsible party from January 1, 1995, to December 31, 2024, and New York’s law covers a wide range of conduct, including production, transport, and sale or distribution of fossil fuels, that occurred from January 1, 2000, to December 31, 2018. New York’s statute places an overall $75 billion cap on recovery from responsible parties, holding them strictly liable for their respective shares of the $75 billion based on the amount of emissions. Vermont’s law, however, places no cap on the recovery of penalties and allocates liability for each responsible party “equal to an amount that bears the same ratio to the cost to the State of Vermont and its residents” from emissions during the applicable time period under the statute. N.Y. Env’t Conserv. § 76-0103(3); 10 V.S.A. § 598(b).  

These laws are novel because each attempts to recover compensatory damages from companies that have lawfully sold substances in commerce, and each purports to reach conduct wholly outside of the enacting state’s borders. Several other states, including California, Maryland, Massachusetts, New Jersey, and Oregon, are in the process of considering similar legislation. Both the proposed California and Oregon climate “superfund” legislation would include a private right of action provision which could allow individuals or entities allegedly harmed by climate-related impacts to sue fossil fuel companies for damages.