Seven states sue over $795M Trump-TotalEnergies offshore wind deal

In February and March 2026, federal courts repeatedly blocked the Trump administration's campaign against offshore wind energy. Judge Patti Saris of the U.S. District Court for Massachusetts vacated Trump's January 2025 executive order suspending all offshore wind leasing, calling it "arbitrary and capriciousArbitrary and CapriciousThe legal standard courts use to strike down agency rules that lack reasoned explanation.Key ConceptArbitrary and CapriciousThe legal standard courts use to strike down agency rules that lack reasoned explanation.Open conceptBookmark" and contrary to the Administrative Procedure ActAdministrative Procedure Act1946 law governing how federal agencies develop regulations and make decisions through rulemaking and adjudication.Key ConceptAdministrative Procedure Act1946 law governing how federal agencies develop regulations and make decisions through rulemaking and adjudication.Open conceptBookmark. She also enjoined stop-work orders directed at Empire Wind and Sunrise Wind. A separate court blocked a suspension order targeting Vineyard Wind.

After losing those court battles, Interior Secretary Doug Burgum's department took a different path. On March 23, 2026, the Department of the Interior announced it had reached a settlement with Attentive Energy LLC — a subsidiary of TotalEnergies — canceling lease OCS-A 0538 in the New York Bight, a 84,332-acre area of federal ocean floor 47 miles off New York's coast.

Attentive Energy had won that lease in a competitive federal auction on March 1, 2022, paying $795 million — the highest single bid in the history of U.S. offshore wind auctions. The New York State Energy Research and Development Authority had contracted Attentive Energy One to deliver 1,404 megawatts to New York City, while New Jersey's Board of Public Utilities had contracted Attentive Energy Two for 1,342 megawatts. Over a 25-year lifespan, the project was projected to generate $25.6 billion in economic benefits for New York state and cut $10 billion from ratepayers' energy bills.

The March 2026 settlement required the federal government to reimburse TotalEnergies the full $795 million it had paid for the New York lease, plus approximately $133 million for a second lease off North Carolina's coast, for a total payout of $928 million. The money came from the federal Judgment FundJudgment FundA permanent Treasury appropriation that pays court judgments and DOJ settlements against the U.S. without requiring a new congressional vote.Key ConceptJudgment FundA permanent Treasury appropriation that pays court judgments and DOJ settlements against the U.S. without requiring a new congressional vote.Open conceptBookmark, a Treasury Department appropriation that exists to pay court judgments and DOJ-negotiated settlements of actual or imminent litigation. The fund may only be used when an agency lacks its own appropriations to cover an award.

In exchange, TotalEnergies agreed to abandon all offshore wind development in the United States and invest the $928 million in fossil fuel projects, primarily in Train 1 through 4 of the Rio Grande LNG terminal in Texas and conventional oil production in the Gulf of America.

New York Attorney General Letitia James and Governor Kathy Hochul led the challenge. On June 2, 2026, they announced that New York had filed suit in the U.S. District Court for the District of Columbia, joined by attorneys general from Connecticut, Maine, Massachusetts, New Jersey, Rhode Island, and Vermont. The complaint names Interior Secretary Doug Burgum as a defendant.

The states raise two primary legal arguments. First, the Interior Department violated the Outer Continental Shelf Lands ActOuter Continental Shelf Lands ActA 1953 federal law giving the US government jurisdiction over the seabed beyond state waters and governing oil, gas, and mineral development there.Key ConceptOuter Continental Shelf Lands ActA 1953 federal law giving the US government jurisdiction over the seabed beyond state waters and governing oil, gas, and mineral development there.Open conceptBookmark by canceling the lease without holding a required hearing, making a specific finding that continuing the lease would cause serious harm, and determining that the benefits of cancellation outweigh its costs. Second, the administration violated the Judgment Fund Act by using Treasury funds for a deal that was not a settlement of actual or imminent litigation — TotalEnergies had not sued, and no case was pending or immediately threatened when the deal was struck.

Interior Secretary Burgum defended the deal in congressional testimony and public statements. He told Democratic lawmakers that TotalEnergies was "simply refunded their money" and characterized offshore wind as "one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers." He cited national security concerns about wind turbines interfering with military radar and communications, the same justification the administration had cited for its executive order that courts later struck down.

Critics in both parties pushed back. Democratic senators called the deal a violation of congressional appropriations authority. Even some Republican senators had previously questioned similar uses of the Judgment Fund — the same fund was used for the DOJ's anti-weaponization settlement, which Senators Thune, McConnell, Tillis, and Cassidy criticized publicly before that fund was abandoned.

The legal case rests on specific statutory text. The Outer Continental Shelf Lands Act, 43 U.S.C. § 1334, gives the Interior Department authority to cancel leases but requires the agency to follow a defined process including notice, findings, and a balancing test. The seven states argue DOI did none of that — it canceled the lease without a hearing or formal findings, simply announcing a settlement agreement. The Judgment Fund Act, codified at 31 U.S.C. § 1304, authorizes payments only for "final judgments" and DOJ compromise settlements of claims that "have been or could be litigated" — the states argue no such litigation existed or was imminent when DOI struck the deal.

The coalition is asking the D.C. District Court to vacate both the lease cancellation and the settlement agreement, and to restore Attentive Energy's lease rights. Such a ruling would require the administration to either comply with the OCSLA procedural requirements before attempting cancellation again or allow the projects to proceed. The legal question of whether states have standing to challenge a federal lease cancellation is not settled — courts will first need to determine whether the states' injuries from lost jobs, tax revenue, and clean energy capacity are legally cognizable harms traceable to the cancellation.

New York had enacted the Climate Leadership and Community Protection Act in 2019, legally committing the state to 9,000 megawatts of offshore wind by 2035 and 70 percent renewable electricity by 2030. State officials said the Attentive Energy project — 2,746 megawatts total across both projects — was essential to meeting that statutory target.

TotalEnergies is a French multinational incorporated in Paris with annual revenues exceeding $200 billion. The company holds significant U.S. investments across oil, gas, and LNG. After accepting the settlement, TotalEnergies announced it would redirect the $928 million into the Rio Grande LNG project in Texas — one of the largest liquefied natural gas export terminals under development in North America. The company had previously signaled it was open to negotiating with the administration after offshore wind permitting was frozen.

The deal drew scrutiny because TotalEnergies had not publicly threatened litigation against the United States before the settlement was announced. Under the Judgment Fund Act, payments are meant to resolve claims where the government faces genuine legal exposure. Critics argue using the fund to pay off a foreign company in exchange for abandoning green energy was a novel and potentially unlawful expansion of the fund's purpose.

The offshore wind industry faces a broader pattern of federal rollback. The Trump administration in January 2025 issued a broad executive order withdrawing all areas of the Outer Continental Shelf from new offshore wind leasing. Courts struck that order down in late 2025. The administration then issued stop-work orders on individual projects, which courts also enjoined. The March 2026 TotalEnergies deal is part of the same campaign against offshore wind — but pursued through a settlement mechanism rather than executive orders, making it harder for courts to apply the same Administrative Procedure Act analysis.

Other offshore wind developers with existing leases — including Equinor, Orsted, and BP — are watching the case. If the court upholds the settlement mechanism, the administration could use it to pay off other developers. If the court strikes it down, the legal pathway for undoing offshore wind projects without following OCSLA procedures is closed.

The states seeking to block the deal have direct economic stakes. New York had already contracted with Attentive Energy One for 1,404 megawatts. Massachusetts Attorney General Andrea Joy Campbell, who has led multiple legal challenges against Trump energy rollbacks, joined the coalition after her office confirmed the Attentive Energy cancellation would directly affect Massachusetts grid supply agreements and clean energy targets. New Jersey had contracted with Attentive Energy Two for 1,342 megawatts. Together, the two projects would have powered roughly 2.7 million homes.

The coalition's lawsuit is one of several legal fronts. Attentive Energy itself could file a separate challenge contesting the settlement on different grounds. Environmental groups including the Natural Resources Defense Council had already submitted public comments criticizing the Interior Department's procedural shortcuts before the settlement was finalized.