The other shoe has inevitably dropped in response to Vermont’s climate superfund law: The American Petroleum Institute (API) and the U.S. Chamber of Commerce have filed the first suit against the state’s landmark “polluters pay” legislation in U.S. District Court for Vermont. 

The Climate Superfund Act made Vermont the first state in the nation to adopt a federal superfund model—requiring polluters to pay for damages—and apply the proceeds to costs from climate harms. The lawsuit, filed Dec. 30, came just days after New York state passed its own version of the law. Massachusetts and Maryland legislators have re-introduced similar climate superfund bills for their states’ 2025 legislative sessions, and a Maine state senator has begun exploring a polluters-pay policy for the state. 

The timing, so soon after the passage of New York’s law, leads advocates to think that the lawsuit is, at least initially, a scare tactic to discourage more copycat laws.

Otherwise, the case is premature, said Pat Parenteau, emeritus professor at Vermont Law School’s Environmental Law Center and a former EPA regional counsel. Unlike the law in New York or the proposed Massachusetts bill, Vermont has yet to place a dollar amount on the damages the state experienced from climate change. 

The law first tasks the Vermont Agency of Natural Resources with determining which fossil fuel companies must be held accountable and what their relative share of loss and damage costs are. To do so, the agency is drawing on experts in the field of climate attribution science, which uses models to determine the likelihood of extreme events with and without human greenhouse gas contributions. 

Using this science, the agency will survey the true cost of climate-driven harms to the state, from the infrastructure damages of catastrophic flooding to public health considerations. This first step of even determining the costs and their sources will take years to produce; the agency gave its first status report on the law to the General Assembly on Jan. 15, which outlines the initial stages of potential approaches to the cost assessment and stresses that the Agency has still yet to do this analysis for the state’s biggest climate hazards, such as flooding.

Parenteau expects the district court judge to either dismiss the case without prejudice (which allows API and the Chamber of Commerce to re-file) or stay the case, until these costs are levied. 

When the lawsuit does begin, the biggest question is one of preemption. API and the Chamber of Commerce argue that federal law, in the form of the Clean Air Act, already addresses the emissions the state law describes, and thus precludes the Vermont legislation, making it unconstitutional. 

The filing rests heavily on the precedent of City of New York v. Chevron, a 2019 case in which the U.S. Court of Appeals for the Second Circuit found that the Clean Air Act grants the EPA, not the courts or state law, authority to regulate greenhouse gas emissions, Parenteau said. 

Whether the precedent extends to the climate remediation and adaptation costs in the superfund bill remains “an open question here,” said Martin Lockman, a climate law fellow at Columbia University’s Sabin Center for Climate Change Law. “I don’t think that The City of New York v. Chevron clearly addresses that, even though the argument of the plaintiff is that it does.”

If the court does agree that the same questions apply to the Climate Superfund Act, that preemption precedent would be binding for Vermont, since it is in the same federal court circuit as New York. 

By the same coin, if the court found that the federal law preempts the Vermont law, it would also apply to New York’s recently passed climate superfund law. However, states outside the Second Circuit—including Massachusetts, Maryland and California—wouldn’t face the same binding decision, but it would be “highly persuasive” to those state’s courts, Lockman said. 

Of course, the court, like many legal experts, could maintain that City of New York v. Chevron is different enough not to apply here. The question of preemption would remain. 

“Preemption would suggest that the only remedy for regulating emissions is whatever remedies the Clean Air Act provides, and [that law doesn’t] include seeking damages. It just covers pollution control mechanisms, not payment of damages,” Parenteau said. “That [Clean Air Act] statute only regulates the sources of emissions, the power plants.” 

When the Vermont Climate Superfund became law in May, its authors maintained that it was not a ban on emissions going forward. Rather, they maintained it was a way to recover costs from past climate damages. 

“There is nothing in the Clean Air Act that deals with this backwards-looking reality that already-released emissions are imposing costs on the state of Vermont, and that the state of Vermont has a right to recover those costs, to protect the health and the welfare of its citizens,” said Anthony Iarrapino, an attorney who lobbied for the law’s passage on behalf of the Conservation Law Foundation.

Iarrapino also pointed out that even though he disagreed with the Supreme Court’s decision to strike down the EPA’s Clean Power Plan in West Virginia v. EPA, the case established the precedent that the job of regulating greenhouse gas emissions is traditionally a state responsibility. 

Then there’s an additional question of due process; API and the Chamber of Commerce argue that the companies potentially implicated in this law do not have a strong enough connection to the state, and the law reaches beyond its jurisdiction.

“It will be a slog, and it will be nasty and mean and expensive as hell.”

— Pat Parenteau, Vermont Law School’s Environmental Law Center

The fact that the state Natural Resources Commission has yet to even announce which companies it will hold liable complicates that question. 

Parenteau and other legal experts say the courts will need to decide this question of standing—whether API and the Chamber are actually the right plaintiffs to bring this case—and whether it belongs in front of the courts right now, before any of the other arguments play out. 

“I’m trying to tell people, this is a long slog,” Parenteau said. “It will be a slog, and it will be nasty and mean and expensive as hell. It’s not six figures, it’s seven figures. Big seven figures.” 

It’s likely that the suit will move back and forth between state and federal courts and through a series of appeals for years, he said, until ultimately, it reaches the highest court. 

“Eventually, I think this issue of can states adopt laws modeled on superfunds that hold oil companies liable for a problem that’s global in nature and beyond anything the domestic law has ever contemplated, I think that issue probably has to be resolved by the Supreme Court,” Parenteau said. “The oil companies’ strongest argument is you can’t leave it up to the 50 states to decide what the law is and whether you know what the liability rule is because you’re going to get a crazy quilt.” 

But the long legal battle ahead is not a surprise and is part of the necessary path to produce a unified, federal approach to dealing with climate accountability, he said, even as individual states push for their own laws.

In a statement, the Chamber of Commerce maintained its commitment to see these suits through: “The Chamber and its partners will continue to fight back against excessive overreach by the states that want to usurp the role of federal regulators,” the chamber said, declining to answer further questions.

“I think the most important thing is that everybody involved expected this,” said Lockman. “This is the next step in this big, society-wide battle over who should bear the costs of climate change. But there’s nothing wild and surprising happening here. It is a battle that everyone saw coming for a long time.” 

Olivia Gieger

Contributor

Olivia Gieger covers climate change, ecosystem science, and environmental policy, with a focus on New England. She is an alumnus of NYU’s Science, Health, and Environmental Reporting Program and Amherst College. Her work has appeared in Inside Climate News, The Guardian, and The Transmitter.