Vermont’s Landmark Climate Superfund Law is Headed to Court
A federal district judge in Vermont is set to hear arguments in the first major court test of the first-in-the-nation polluter pays climate law.
In 2024 the state of Vermont passed a groundbreaking new law modeled after the federal Superfund program that holds major fossil fuel producers liable for their past greenhouse gas emissions and requires them to help pay for climate change adaptation projects in the state. The law was the first of its kind and its passage marked a breakthrough for climate accountability efforts. New York then followed Vermont’s lead and passed a similar law just months later. As One Earth Now previously reported in its debut article, this strategy of using state legislation to hold Big Oil financially accountable for the devastating and costly impacts of the climate crisis it largely (and knowingly) created could be a real game changer.
Now, two years after Vermont enacted its landmark Climate Superfund Act, the law is facing its first major test in court. On March 30 a federal district court judge will hold a hearing at the federal courthouse in Rutland, Vermont addressing motions in two related legal challenges to Vermont’s novel statute. One of the challenges was filed at the end of 2024 by the US Chamber of Commerce and the American Petroleum Institute as representatives of big oil companies. Twenty-four Republican-led states have joined this suit as intervenor plaintiffs. The other challenge was brought last year by the Trump administration. Both cases broadly assert that the climate superfund law is unconstitutional and precluded by federal law, and both aim to have it stricken down immediately before Vermont proceeds further with implementing it.
Next week’s hearing will address the challengers’ request for a swift judgment on the contested legal issues in their favor – called a motion for summary judgment – as well as Vermont’s ask for the same (cross motion for summary judgment) and the state’s bid to dismiss or toss out the suits. It will then be up to the court to decide whether or not the Climate Superfund Act survives, at least for now.
The stakes are significant on both sides of this battle. Should Vermont ultimately lose, it would mean that the state’s taxpayers and residents continue having to foot the entire bill for responding and adapting to climate disasters. It would also likely mean the end of similar climate superfund laws or proposals in other states. Fossil fuel polluters would enjoy continued impunity and exorbitant profits while the costs of climate-fueled extreme weather balloon and further burden already-strained municipal and state budgets. If the fossil fuel industry and its allies lose this fight, then companies like BP, Chevron, ExxonMobil and others would be subject to billions of dollars in liability under not only Vermont’s law but other states like New York’s too.
“It’s only fair that the companies that have made tremendous profits at our expense help clean up the mess they knowingly made by paying their fair share” - Vermont state representative Amy Sheldon
Legal experts say this litigation will take years to play out, and it could very well end up before the US Supreme Court. The initial challenges and arguments made before the district court are just round one, and whichever side loses is almost certain to appeal. If Vermont wins this first round, though, it may encourage other states to push forward with passing their own versions of climate superfunds. Nearly a dozen other states have seen such bills introduced, and many of them are surely watching Vermont’s legal battle closely.
In Massachusetts, for example, climate activists are continuing to rally grassroots support behind the state’s proposed climate superfund bill that will be refiled next session after legislators – perhaps wary of expected legal challenges – quietly sent it to study (killed it) last month. One of the lead sponsors of the bill, state representative Steve Owens, explained during a legislative hearing last September that this is an especially important time for states like Massachusetts to advance climate accountability and resiliency policies given the backsliding happening at the federal level. “We have the opportunity,” he said, to enact legislation “that fuels the movement to hold companies accountable and fund climate adaptation efforts at the same time as the federal government is rolling back policies that would combat climate change and leaving us to deal with the costs and the public health externalities ourselves.”
The question of who shoulders the costs of responding and adapting to the climate crisis is at the heart of this legislative approach and the litigation that will determine whether or not it succeeds.
“The costs of climate change are real, and are currently being born by taxpayers,” Vermont state representative Amy Sheldon said on the House floor two years ago as the legislative body contemplated passing the climate superfund bill. “It’s only fair that the companies that have made tremendous profits at our expense help clean up the mess they knowingly made by paying their fair share.”
“The fossil fuel industry’s polluting products are damaging our climate and our communities, and its attempt to avoid accountability is an insult to Vermonters,” said Elena Mihaly, vice president at Conservation Law Foundation’s Vermont office. “The Climate Superfund law protects Vermont’s families and businesses who are forced to shoulder the skyrocketing costs of storm damage, recovery, and climate adaptation. It’s time for fossil fuel corporations to stop escaping responsibility for the cost of climate adaptation—communities shouldn’t be left to pick up the tab alone.”
Conservation Law Foundation (CLF) along with the Northeast Organic Farming Association of Vermont (NOFA-VT) are backing the state defendants as intervenors in the legal challenges to the climate superfund law. “Our community has been enormously impacted by the climate crisis,” said Grace Oedel, executive director of NOFA-VT. “And we are committed to defending this law that will help so many of our farmers and community members navigate these extreme challenges.”
Vermont certainly anticipated that it would face lawsuits upon enacting its climate superfund law. “We studied this pretty carefully, and we relied on legal scholars’ commentary and some of them testified as witnesses. Our own legislative counsel certainly weighed in,” Vermont state representative Martin LaLonde told me during an interview in 2024 after the law passed.
“I’m a lawyer by training and worked at the Department of Justice in the Environment & Natural Resources division for 12 years,” LaLonde added. “So I was also able to on my own evaluate our defenses. And we feel pretty good about that. Are we ultimately going to win? That’s hard to tell.”
The industry groups, states, and Trump Justice Department suing Vermont over its law say that it is unfairly and unconstitutionally punitive and would effectively function as a regulation on energy producers and on global greenhouse gas emissions. “Vermont’s Superfund Act attempts to usurp the power of the federal government by regulating national and global emissions of greenhouse gases, violating federal law in multiple ways,” the US government argues in its complaint. The plaintiffs also claim the climate superfund law, by forcing fossil fuel companies to pay, will hamper oil and gas production and raise energy costs for consumers.
“Vermont’s flagrantly unconstitutional statute threatens to throttle energy production, despite this Administration’s efforts to unleash American energy. It’s high time for the courts to put a stop to this crippling state overreach,” Acting Assistant Attorney General Adam Gustafson of the DOJ’s Environment & Natural Resources division said last September in a press release.
Vermont counters by saying that its climate superfund law is an exercise of its traditional state authority to protect its citizens and raise revenue. The state argues its law creates a cost recovery mechanism and does not regulate emissions, nor is it punitive. And allegations about potential economic impacts beyond Vermont are entirely speculative at this point, Vermont notes, arguing the legal challenges are premature since the state is still several years away from issuing payment demands to fossil fuel companies.
The hearing next week is also expected to address the challengers’ federal preemption argument – basically that the federal Clean Air Act’s authorization of the EPA to regulate greenhouse gas emissions means that states cannot regulate or impose liability on such emissions. But the Trump EPA in repealing the greenhouse gas endangerment finding is now disclaiming its regulatory authority for controlling greenhouse gases from motor vehicles. As CLF and NOFA-VT point out in a recent filing with the court, that position from the Trump administration “contradicts its litigating position in this case.” The Trump DOJ responded by claiming there is no inconsistency in its position, and that federal preemption under the Clean Air Act still applies to state laws pertaining to global greenhouse emissions. Whether the court will be persuaded by that claim remains to be seen.
And it remains an open question as to whether large fossil fuel corporations – the so-called ‘carbon majors’ responsible for generating the majority of industrial carbon emissions that are causing the climate crisis – will ever be held accountable for the damages wrought by their products’ emissions, at least in the US. The climate superfund laws enacted in Vermont and New York are an attempt to bring about some accountability, but their fate in the courts right now is uncertain.
There is also a growing backlash to climate accountability efforts as the fossil fuel lobby and its political allies look to leverage all three branches of government to shield the industry from any legal liability. Utah just became the first state to enact a law prohibiting liability for climate damages; similar liability shield legislation is advancing in at least four other states. And Republicans in Congress are working on draft legislation that would block state and municipal climate lawsuits against Big Oil as well as state climate superfund laws.
But if one thing is clear, it is that the escalating costs and impacts of the climate crisis are not going away. “It’s going to be unaffordable for Vermont to be able to deal with the consequences of climate change,” LaLonde told me. “And this [climate superfund] will help us to be able to afford to have that resilience.”