The U.S. Justice Department has initiated legal action against two states over their "climate superfund laws," prompting the New Jersey Business & Industry Association (NJBIA) to advise caution for New Jersey before enacting similar legislation. These proposed laws in New Jersey, known as bills A-4696/S-3545, aim to impose penalties on fossil fuel companies for operations allegedly linked to climate change damages.
These bills have progressed through legislative committees but are yet to be scheduled for a vote by the full Assembly or Senate. Ray Cantor, NJBIA Deputy Chief Government Affairs Officer, highlighted that federal efforts to declare similar laws in New York and Vermont unconstitutional indicate potential costly legal challenges for New Jersey if it pursues this path.
"NJBIA has said all along that laws that try to retroactively punish companies for providing legal, necessary fossil fuel products are unconstitutional," Cantor stated. He added that such legislation could lead to increased energy costs affecting consumers directly.
On May 1, Acting Assistant U.S. Attorney Adam Gustafson from the Justice Department's Environment and Natural Resources Division filed complaints in federal courts in New York and Vermont. The actions seek to halt these states from enforcing their climate superfund laws. Additionally, complaints were filed against Michigan and Hawaii due to their intentions to sue fossil fuel companies over alleged climate change impacts.
Gustafson expressed concerns about state regulations exceeding constitutional or statutory authority: "When states seek to regulate energy beyond their constitutional or statutory authority, they harm the country’s ability to produce energy and they aid our adversaries."
President Donald Trump directed U.S. Attorney General Pamela Bondi to counteract state laws burdening domestic energy development under Executive Order 14260, Protecting American Energy from State Overreach. Bondi criticized these state actions as threats to American energy independence and national security.
The lawsuits challenge the strict liability imposed by the state laws on energy companies for global activities related to fossil fuels extraction or refining. The federal government argues these state laws conflict with the federal Clean Air Act and foreign affairs power, violating the U.S. Constitution.
Complaints against these four states can be accessed online via provided links.
