Judge hears challenges to Vermont's climate superfund law

Body

Vermont on Monday defended a landmark 2024 climate superfund law in federal court, asking a judge in Rutland to dismiss two lawsuits that challenge whether the state can impose liability through the measure. The case tests whether Vermont can require fossil fuel companies to help pay for climate-related damages tied to events in the state, in the face of arguments from federal officials and industry-backed challengers that the law violates federal authority and the constitutional division of power.

The law makes Vermont the first state to enact a climate superfund modeled on the federal superfund statute, which taxes certain petroleum and chemical companies to fund cleanup of toxic-waste sites. Under Vermont’s approach, money collected under the state measure would be used for climate adaptation projects, including upgrades to stormwater drainage systems, sewage treatment plants and roads, according to the arguments presented in court.

Vermont said it acted after suffering catastrophic flooding in 2023 and other damage linked to extreme weather, which scientists say is occurring more frequently due to climate change. The state’s position in court was that the law does not conflict with federal law or policy, does not regulate fossil fuel emissions, and does not punish fossil fuel producers, AP reported.

Jonathan Rose, an attorney with the Vermont attorney general’s office, argued that Vermont is exercising powers reserved to states. “As a sovereign state, Vermont gets to do certain things that are exercises of a traditional state authority. The Superfund Act operates squarely in those areas of traditional state authority,” Rose said in U.S. District Court in Rutland.

The challengers dispute that premise. The U.S. Department of Justice sued Vermont after President Donald Trump ordered Attorney General Pam Bondi to take action against states that, in the administration’s view, are overreaching their authority in how they regulate energy development. In court arguments, DOJ attorney Riley Walters said the dispute is about Vermont’s attempt to apply state law to global energy production, not about Vermont raising revenue for in-state health and welfare.

Walters told the judge that “This case is not about Vermont’s ability to raise revenue and protect the health and welfare of its residents. It’s about Vermont’s attempt to subject global energy production activity to Vermont law, which brazenly disregards the constitutional division of power in the federal government and the states.” He argued that some other cases permitting state law to be applied to out-of-state conduct involved direct and traceable connections between the behavior and the harm.

Walters also argued it would be impossible to connect weather impacts in Vermont to specific greenhouse gas emitters. “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,” he said. He added: “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.”

In addition to the Justice Department’s lawsuit, the U.S. Chamber of Commerce and the American Petroleum Institute sued Vermont in December 2024, calling the state climate superfund law unconstitutional and in violation of federal law. They argued that the measure imposes liability and penalties on out-of-state energy producers for harms arising from out-of-state and global greenhouse gas emissions.

AP reported that West Virginia is leading about two dozen states intervening to support the challengers, according to the account of the hearing. The Conservation Law Foundation, an environmental advocacy group in New England, and the Northeast Organic Farming Association of Vermont supported Vermont in the litigation, with Attorney Adeline Rolnick representing the Conservation Law Foundation and farmers.

Rolnick argued that striking down the law would expand the federal government’s ability to challenge state measures by claiming preemption. She told the judge Monday that granting the plaintiffs’ motions “would give the federal government this roving license to seek to enjoin any state law that it disagrees with simply by pleading preemption,” AP reported. She added that such a result would “be quite an expansion of the federal role in our state-federal system,” and said the court should require the United States to show “concrete imminent injury.”

Judge Mary Kay Lanthier took the motions under advisement and said she would issue rulings as soon as possible, according to AP. The U.S. Chamber of Commerce said it was looking forward to a decision, with Marty Durbin, president of the Global Energy Institute at the chamber, saying Vermont’s approach would be “disastrous for American families” and calling it a “massive retroactive” penalty on energy producers.

Vermont’s law took effect after Republican Gov. Phil Scott allowed it to become law without his signature, and the idea has since gained traction elsewhere, AP reported. In addition to New York, other Democratic-controlled states were considering similar climate superfund laws, while other states were seeking damages from fossil fuel companies in state courts. Jennifer Rushlow, interim vice president for CLF Vermont, said “This is the first time that a state legislature has taken the gigantic step of pursuing polluters and holding them accountable to clean up the mess that they’ve made,” AP reported.

A Dartmouth College research team estimated that the world’s biggest corporations have caused $28 trillion in climate damage, AP reported, citing a study that estimated pollution caused by 111 companies and found more than half the total dollar figure came from 10 fossil fuel providers.