A coalition of seven Northeastern states has launched a legal challenge against the Trump administration, arguing that a nearly $1 billion agreement to halt offshore wind development unlawfully diverted taxpayer funds and undermined the nation’s clean energy sector.
The lawsuit, filed Tuesday in the U.S. District Court for the District of Columbia, targets a March agreement between the U.S. Department of the Interior and French energy giant TotalEnergies. Under the deal, the federal government agreed to provide $928 million to end planned offshore wind projects along the East Coast and redirect investment toward domestic fossil fuel initiatives.
Attorneys general from Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island, and Vermont contend that federal officials exceeded their legal authority when negotiating the settlement. They are asking the court to invalidate the agreement.
The legal challenge centers on claims that the administration improperly used public funds and violated the Outer Continental Shelf Lands Act, which limits the federal government’s ability to cancel offshore wind leases.
New York Attorney General Leticia James, who is leading the coalition, sharply criticized the administration’s actions.
“The Trump administration is once again trying to kill clean energy projects and destroy good-paying jobs for New Yorkers,” James said in a statement.
At the heart of the dispute are offshore wind leases that would have allowed TotalEnergies to build large-scale wind farms off the coasts of New York and North Carolina. Supporters argue the projects would have expanded renewable energy generation and created long-term employment opportunities across the region.
The lawsuit specifically challenges the reimbursement of $795 million tied to an offshore wind lease purchased in 2022 by Attentive Energy, a TotalEnergies subsidiary. According to court filings, that payment was allegedly made through the federal Judgment Fund, a Treasury account typically used to satisfy court judgments, administrative awards, and approved settlements when agencies lack available funding.
State attorneys general argue that using the fund in this case was unlawful. They also claim federal agencies failed to provide a legitimate justification for terminating the lease agreements.
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The Trump administration has defended the settlement, portraying it as a necessary correction to energy policies established under former President Joe Biden.
In a statement provided to ABC News, a Department of the Interior spokesperson said, “The only thing blatantly unlawful here was the process by which these offshore wind leases were negotiated and imposed under the Biden administration.”
The spokesperson further argued that the projects would have placed an unnecessary burden on taxpayers.
“Billions of dollars were effectively taken from the pockets of hardworking taxpayers and funneled into energy projects that were not only unreliable, but also unaffordable,” the spokesperson said.
Federal officials also cited national security concerns as a key reason for ending the projects.
“These settlements were reviewed and approved by the Department of Justice, underscoring that they went through the appropriate channels,” the spokesperson said. “Attempts to rewrite history now cannot erase the reality of these projects and the damage they could cause. This administration will not sit back and let reckless projects create higher utility costs, a weakened energy system, and unnecessary harm to the environment.”
The lawsuit names multiple federal agencies and officials as defendants, including the Department of the Interior and Secretary Doug Burgum, the Bureau of Ocean Energy Management and Acting Director Matthew Giocona, and the Department of Justice along with Acting Attorney General Todd Blanche.
The case highlights the growing political and legal battle over America’s energy future. Wind power currently accounts for roughly 10% of U.S. electricity generation, according to federal data, and more than 75,000 wind turbines operate across the country. Offshore wind development, however, remains particularly vulnerable to federal policy decisions because projects are located in federally controlled waters.
Neither the Bureau of Ocean Energy Management, the Justice Department, TotalEnergies, nor Attentive Energy immediately responded to requests for comment. Efforts to contact Attentive Energy were unsuccessful, as its website is no longer active and emails sent to its press office were returned undelivered.
The court’s decision could have major implications for future renewable energy investments, federal lease agreements, and the balance between clean energy development and fossil fuel expansion in the United States.
