Less than a month after the Northern District of New York invalidated New York State’s Climate Change Superfund Act (see our prior blog on this decision here), a second federal court has reached the same result.

Judge P. Kevin Castel of the Southern District of New York on Sept. 23 granted summary judgment declaring the Act unconstitutional and permanently enjoining its enforcement. As we discussed in our earlier post on West Virginia v. James, the Act establishes a $75 billion fund and imposes strict, retroactive liability on fossil fuel producers based on their share of global greenhouse gas emissions from 2000 to 2024. What makes the new decision distinctive is who brought it and how the court got there.

A Different Plaintiff: The United States Itself

This suit was filed by the United States and the EPA, not by a coalition of states and industry groups as in the earlier case. That difference reshaped the threshold standing analysis. The United States narrowed its claim of standing to the vindication of its “sovereign interests,” expressly abandoning arguments based on proprietary and parens patriae interests. The court held that the federal government has standing to protect its sovereign authority to create and enforce a regulatory scheme under the Clean Air Act, and its exclusive authority to conduct foreign affairs. The imminence requirement was satisfied by the Act’s mandate that the DEC “shall issue notices of cost recovery demand” no later than June 30, 2028. This contrasts with the earlier decision, where standing rested on the credible threat of enforcement facing individual member companies, established through the Act’s own legislative history.

Clean Air Act Preemption: Following City of New York

On the merits, Judge Castel tracked the same roadmap as Judge Sannes, holding that the Second Circuit’s decision in City of New York v. Chevron Corp. controls. Because the Act operates in an area historically governed by federal common law, the dispositive question was whether the Clean Air Act affirmatively authorizes it — and it does not. The court rejected New York’s central argument that the Act merely provides compensation for past harms rather than regulating emissions, reasoning that “regulation can be effectively exerted through an award of damages.” It found the Act’s backward-looking design was “not a controlling difference,” and that it made no difference that the Act is a statute rather than a common-law suit. The court also held that neither the Supreme Court’s recent Hencely v. Fluor Corp. decision, nor the EPA’s rescission of its 2009 endangerment finding, changed the analysis — the same two arguments Judge Sannes rejected.

Foreign Affairs Preemption

As an independent ground, the court held the Act field-preempted under the foreign affairs doctrine. The court concluded that New York has “no serious claim to be addressing a traditional state responsibility,” because climate change “presents a uniquely international problem” not well-suited to state law. Notably, the court held that the United States’ announced intention to withdraw from the U.N. Framework Convention on Climate Change did not diminish the foreign policy character of regulating extraterritorial emissions.

Two Courts, One Conclusion

Judge Castel expressly noted that his conclusion accords with Judge Sannes’ “recent and well-reasoned decision,” and that both courts found the Act indistinguishable from the tort claims in City of New York and field-preempted under the foreign affairs doctrine. Practicing constitutional avoidance, Judge Castel declined to reach the Commerce Clause, Due Process, and extraterritoriality claims, resting instead on the two preemption grounds.

With two federal courts now aligned against the Act within a single month, New York seems to face a steep road on any appeal — and a related climate case is already pending before the Supreme Court (i.e., Suncor Energy (U.S.A.) Inc. v. Board of County Commissioners of Boulder County).