Earlier in February, we posted about New York’s second in the U.S. “Polluter Pays” law (check the website for a copy of the post that outlines the law that was signed by Governor Hochul in 2024). Not surprisingly, 22 states and some private concerns sued New York claiming the law constitutes “an attack on US energy producers that will be felt by consumers.” An interesting phrase given that one could argue that tariffs on energy do exactly the same thing but a turn of the phrase for a different day.

The states who filed the action (close your eyes and stop reading and see if you can guess who …) via their Attorneys General against New York include Alabama, Arkansas, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah and Wyoming. Others joining in the lawsuit include Alpha Metallurgical Resources Inc. (a coal supplier), the West Virginia Coal Association, the Gas and Oil Association of West Virginia and America’s Coal Association.

Surprisingly, Tennessee has now put forth a bill in their House entitled the “Climate Resiliency Fund Act.” The bill was assigned to its Agriculture and Natural Resources Subcommittee who is due to meet late this month. Given that Tennessee joined the States who are fighting New York’s bill it would come as a bit of a surprise if this Tennessee Bill which was put forth by a Democrat, actually moves in a Republican-controlled House and Senate.

Tennessee’s bill is similar to the New York and Vermont Superfund Acts in that the bill seeks to hold polluters (i.e., refiners of fossil fuels in this bill) strictly liable and responsible for climate impact damages resulting from more than one billion metric tons of covered greenhouse gas emissions during the covered period. The applicable covered period is defined as January 1, 1995, to December 31, 2025. Funds collected from fines of these responsible actors would be used to prioritize climate change adaption projects.

Green Spouts: The Tennessee Climate Resiliency Fund Act would be the third of its kind state law that attempts to hold a polluter strictly liable for past acts that have created a negative impact on the State’s infrastructure and climate adaptability. The Act makes any entity or successor company that engaged in the trade or business of fossil fuel extraction or refining crude oil between 1-1-1995 and 12-31-2025 strictly liable for its share of costs incurred by the State.  The emitters are being held responsible for their respective portion of greenhouse gas emissions above the 1 billion metric tons noted above. 

So far, only New York and Vermont have passed these types of “Polluter Pays” laws, noting that Massachusetts, California, New Jersey and Maryland are considering them. Whether this type of State Superfund strict liability law gets traction and passage by other states and whether these 22 State Attorneys General follow up with other lawsuits in an effort to blunt the impact of these laws, remains to be seen but it is surely a further evolution/development and one which bears watching, especially in light of the new Administration federally which will likely see the Federal government take a step back from its climate initiatives and by default will leave the leadership role for climate change initiatives in the hands of state and local government. That said, given that Tennessee is one of the 22 states challenging the legality of the New York bill it would stand to reason that it is very unlikely that this Tennessee bill will move out of its Subcommittee, but we will keep an eye out in case lightning strikes here.

Duane Morris has an active Sustainability and Risk Mitigation Team to help organizations and individuals plan, respond to, and execute on your Sustainability and Risk Mitigation planning and initiatives. For more information, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Jeff Hamera, Jolie-Anne Ansley, Robert Montejo, or the attorney in the firm with whom you are regularly in contact. Duane Morris has an active Sustainability and Risk Mitigation Team to help organizations and individuals plan, respond to, and execute on your Sustainability and Risk Mitigation planning and initiatives. For more information, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Jeff Hamera, Jolie-Anne Ansley, Robert Montejo, or the attorney in the firm with whom you are regularly in contact.