New York Leads Eight States Suing Trump Administration Over $1.4 Billion in Offshore Wind Payouts

A coalition of eight states led by New York sued the Trump administration on Tuesday over agreements that canceled four offshore wind leases along the East Coast and directed more than $1.4 billion in federal payments to the developers, money the states say was misused to bankroll oil, gas and geothermal projects instead.

New York Attorney General Letitia James filed two separate complaints, one in the U.S. District Court for the Eastern District of New York over a lease held by Bluepoint Wind, LLC, and a second in the U.S. District Court for the District of Maine over three leases held by Invenergy. Joining New York in both cases are Connecticut, Delaware, Maine, Massachusetts, New Jersey, Rhode Island and Vermont. Both complaints name the Department of the Interior, Secretary Doug Burgum, the Bureau of Ocean Energy Management, the Department of Justice, Attorney General Todd Blanche and Associate Attorney General Stanley Woodward as defendants, with the wind developers listed as interested parties.

The numbers

The two deals under challenge involve four separate lease areas. Interior paid Bluepoint $765 million to relinquish Lease OCS-A 0537, roughly 71,500 acres of ocean roughly 38 miles off Long Island and 53 miles off the New Jersey coast, according to the Bureau of Ocean Energy Management's own project page. Bluepoint had paid $765 million for the lease in a 2022 federal auction. Separately, Interior paid Invenergy just over $653 million to give up Lease OCS-A 0542, an 84,000-acre tract in the New York Bight the company won for $645 million in 2022, along with two smaller leases totaling roughly 216,000 acres in the Gulf of Maine, off the coasts of Maine and Massachusetts, that Invenergy had acquired for about $11 million combined in a 2024 auction. In each case, the settlement amount closely tracks what the company originally paid for the leases.

Under the terms described in the complaints, Bluepoint is required to put its $765 million into a liquefied natural gas facility and has agreed not to pursue further offshore wind development in the United States. Invenergy's $653 million is earmarked for natural gas plants in the Midwest and West and a geothermal project, according to the states' filings.

A pattern dating to spring

The lawsuits are the latest in a string of similar challenges to a strategy Interior began rolling out in the spring. The department announced the Bluepoint arrangement, alongside a separate deal ending Golden State Wind's lease off central California, in an April 27 press release describing the payouts as a way to redirect capital from offshore wind toward "affordable, reliable" domestic energy. California's attorney general, Rob Bonta, has separately sued over the Golden State Wind deal and, during Climate Week this month, filed a related case over Interior's buyout of Invenergy's lease in the Morro Bay Wind Energy Area, a matter his office announced separately from Tuesday's East Coast filings. All of the settlements draw on the Judgment Fund, a permanent Treasury appropriation ordinarily reserved for paying legal judgments and settlements between the government and an adverse party. The states argue in their complaints that no litigation existed to settle in the first place, making the payments an end run around Congress's control of federal spending.

Counting Tuesday's filings, the pattern now spans five settlements since April: the $120 million paid to Golden State Wind, the $765 million paid to Bluepoint, the roughly $111 million paid to Invenergy over its Morro Bay lease, the $653 million paid to Invenergy over its New York Bight and Gulf of Maine leases, and a separate $795 million settlement with TotalEnergies over a lease off New York that New York and six other states challenged in court in June. Combined, those five deals commit close to $2.4 billion in Judgment Fund payments to companies abandoning offshore wind.

New York and the other plaintiff states had counted the four now-canceled leases toward state offshore wind targets, and the coalition argues in its filings that the settlements "sabotage" their ability to meet growing electricity demand. The complaints also argue that Interior's own prior review of the leases, conducted in consultation with the Department of Defense before they were auctioned, already accounted for any legitimate security concerns, making the administration's current rationale pretextual.

Administration defends the deals

Interior has said the settlements were voluntary and cleared by the Justice Department. In the April announcement, Secretary Burgum argued that offshore wind developers had overpaid for leases that only penciled out with federal subsidies.

"Companies were basically sold a product in 2022 that was only viable when propped up by massive taxpayer subsidies," Burgum said in the department's statement announcing the Bluepoint and Golden State Wind agreements.

Associate Attorney General Woodward, whose office is named as a defendant in Tuesday's suits, said in the same release that "the American taxpayer will be the beneficiary and not a source of endless subsidies." The states dispute that framing. "Americans are facing increasing energy costs because this administration would rather pay off energy companies than let us build the new power sources we need," James said in a statement issued alongside the filings. Governor Kathy Hochul, who joined James in the announcement, called the arrangement a "pay-to-not-play scheme" that amounts to "an outrageous abuse of taxpayer dollars."

What happens next

The complaints ask the courts to declare the lease cancellations arbitrary and unlawful under the Administrative Procedure Act, the Outer Continental Shelf Lands Act and the National Environmental Policy Act, to void the settlement agreements, and to bar Interior from carrying them out while the litigation proceeds. Neither court has yet set a schedule for the government's response or for any hearing on preliminary relief. The Eastern District of New York case, over the Bluepoint lease, is docketed as No. 1:26-cv-05851; the Maine case had not yet been assigned a docket number as of the filing.

Tuesday's filings add to a growing docket of state challenges to the administration's offshore wind buyouts, following an earlier suit by New York and other states over a settlement with TotalEnergies and California's separate cases over the Golden State Wind and Morro Bay deals. With the leases now in legal limbo, the practical fate of the four projects, and of the gas, LNG and geothermal investments meant to replace them, will likely turn on how quickly the district courts move and whether either side seeks emergency relief while the underlying claims are litigated.