SAN FRANCISCO (KEYT) – California's Attorney General filed a lawsuit against the Trump Administration's recent deal killing a local offshore wind energy project Friday alleging the deal is unconstitutional and violates multiple federal laws.
In late April of this year, the Trump Administration announced it had cut a deal with two offshore wind energy companies, Bluepoint Wind and Golden State Wind, to terminate their wind energy project leases in exchange for "dollar-for-dollar reimbursement".
"Having spent most of 2025 issuing arbitrary 'stop-work' orders to offshore wind energy projects, which courts uniformly struck down as unlawful, the Trump administration has turned to a new tactic to circumvent the courts altogether: buying out developers' offshore wind energy leases through collusive settlements," opened Friday's lawsuit filed in U.S. District Court for the Northern District of California. "On April 27, 2026, the Department of the Interior announced an agreement to buy out and then cancel an offshore wind lease for a project off the California coast held by Golden State Wind. That latest attack on offshore wind misappropriates taxpayer dollars to force the abandonment of a project that would have created California jobs, revitalized California ports, and provided California with clean energy."
Golden State Wind agreed to abandon its lease within the Morro Bay Wind Energy Area and would recover around $120 million from the Trump Administration, but only after the company made an investment of, "an equal amount in the development of U.S. oil and gas assets, energy infrastructure, and/or LNG [liquid natural gas] projects along the Gulf Coast" shared the Interior Department in April.
"Bluepoint Wind and Golden State Wind have each separately agreed to voluntarily end their offshore wind leases, with the respective affiliate companies agreeing to make financial investments in reliable conventional energy projects," stated the Department of the Interior in a press release in April. "[T]hese investments advance President Donald J. Trump's Energy Dominance Agenda to leverage the nation's natural resources to benefit American citizens and help lower everyday energy costs."
The reimbursement amount roughly matches the down payment made by Golden State Wind to secure the lease initially in 2022, but federal law already prescribes a process for paying companies back when their offshore wind leases are terminated.
Under the Outer Continental Shelf Lands Act, when the federal government cancels an offshore energy lease, the lessee is "entitled to receive the lesser of two amounts: the fair value of the cancelled rights as of the date of cancellation, or the excess of the lessee's total expenditures on the lease over revenues received."
"The buyout and cancellation of Lease OCS-P 0564 is unlawful and must be set aside pursuant to the Administrative Procedure Act (APA), 5 U.S.C. § 706(2), because it is arbitrary and capricious, illegal, and in excess of statutory jurisdiction," argued Attorney General Bonta in Friday's filing. "Among many unreasoned aspects of its decision making, BOEM [U.S. Bureau of Ocean Energy Management] has proceeded with no regard for California's significant reliance interests in Lease OCS-P 0564, including millions of dollars invested with the support of Congress, the Department of the Interior, and California voters to develop the State's offshore wind industry. The lease cancellation also violates numerous guardrails in OCSLA [Outer Continental Shelf and Lands Act] and its regulations, the Coastal Zone Management Act (CZMA), and the National Environmental Policy Act (NEPA) that protect California’s stake in Lease OCS-P 0564."
Prior offshore wind deals, including an almost $1 billion deal with French energy giant TotalEnergies, to terminate its offshore wind projects are subject to Congressional investigation for the same reasons noted in Friday's filing.
According to Ranking Member Huffman of the House Natural Resources Committee and House Judiciary Committee Ranking Member Raskin April, the Trump Administration drew the almost $1 billion payment to TotalEnergies from the Judgement Fund, an account created by Congress in 1956 to pay court-ordered judgements and settlements against the government.
"Under that formula [in the Outer Continental Shelf Lands Act], TotalEnergies was entitled to whatever the current fair value of OCS-A 0545 and OCS-A 0538 actually was on March 23, 2026, not a full refund of the purchase price," detailed the Ranking Members in April. "The administration did not use the statutory formula, as incorporated into the leases. It paid nearly $1 billion—a figure bearing no relationship to what Congress wrote into law, and almost certainly a significant overpayment even under the most favorable reading of the statute."
A Department of the Interior statement sent in response to Your News Channel's inquires back in late April also referred to the payments as "monies refunded" and "not taxpayer dollars" and that the "settlement" was "approved by the Department of Justice".
Those claims are now subject to Freedom of Information Act requests filed by Your News Channel author including one that has already exceeded the statutory limits for a response.
According to the Department of the Treasury, it has no record of authorization from any other federal agency, including the Department of the Interior that it can not make any amount of the payments nor from the Attorney General or a designee for administrative payments in excess of $25,000.
Both of those forms of authorization are required by federal law to make Judgment Fund-based payments detailed in the agreement with TotalEnergies.
The difference between categorizing the payments as a refund for a lease terminated by the federal government or a subsidized investment is a serious legal question.
Article I, Section 9, Clause 7 of the U.S. Constitution states, "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law".
Ranking Members Raskin and Huffman argued that using the Judgement Fund, which is managed by the Treasury Department and funded by Congress, to settle, reimburse, or to subsidize a future investment would violate the above appropriations clause as it was not approved by Congress.
"Independent of the lease cancellation's illegality, the Settlement Agreement presents multiple abuses of federal appropriations process," echoed Friday's filing. "[B]y providing for payment from the Judgment Fund, the Settlement Agreement violates both the Judgment Fund Act, 31 U.S.C. § 1304, and the Antideficiency Act, 31 U.S.C. § 1341. In particular, although the Judgment Fund may be used to satisfy a 'compromise settlement[] . . . for defense of imminent litigation,' 28 U.S.C. § 2414; see 31 U.S.C. § 1304(a)(3)(A), that condition cannot be satisfied by backroom deals over phantom controversies. The litigation described in the Settlement Agreement was never 'imminent' but rather couched within nested conditionals: the agreement purports to resolve the suit that Golden State would have filed if BOEM had issued a suspension order described only in abstract. The Judgment Fund cannot be used to resolve a sequence of hypotheticals."
"The benefit that the buyout agreement actually confers on the federal government is not the dismissal of any genuine litigation claims but the funding of the Trump administration's preferred fossil-fuel energy projects, paid for by virtue of public funds never appropriated for that purpose," noted Attorney General Bonta Friday.
Golden State Wind is a co-owned joint venture between Madrid-based Ocean Winds and Reventus Power, an offshore wind platform-focused company for the Canada Pension Plan Investment Board.
The Interior Department stated that the companies that were part of April's deal also agreed to not pursue any new offshore wind projects in the United States.
None of the above companies indicate any prior oil and natural gas projects on their respective websites and there is no public indication any company pursued the termination of the projects unilaterally.
"We did not take this decision lightly," shared Michael Brown, CEO of Ocean Winds North America in a statement to Your News Channel in late April. "But when the underlying conditions in a market change, we must adapt. In this case, receiving a refund for the lease payments we had invested and exiting on agreed terms was the right outcome for our shareholders and partners."
Friday's lawsuit requests that federal courts declare the Golden Winds Settlement Agreement and lease termination unconstitutional as well as unlawful, vacate the conditions of the deal, and stop the Trump Administration from inking similar deals going forward.
"The Executive Branch has no authority to give offshore wind leaseholders a 'dollar-for-dollar reimbursement' of their lease fees: once deposited into the U.S. Treasury, the lease fees became part of a general pool of monies expendable only by Congress's appropriation," Friday's filing argued. "Nor may the Executive Branch direct that $120 million refund to fossil fuel projects that have nothing to do with federal waters, much less the offshore wind leasing program that Congress funded BOEM to administer. Because Congress never appropriated such sum for this purpose, Defendants' expenditure is contrary to the Spending and Appropriations Clauses. By arrogating spending authority constitutionally delegated to Congress, Defendants have also acted ultra vires and violated the constitutional separation of powers."
In December of last year, the Trump Administration suspended five large-scale offshore wind projects, including one project that was already generating electricity, "due to national security risks" detailed in still-classified reports the Interior Department shared in a press release.
Federal courts agreed with plaintiffs and struck down each of those stop work orders despite the use of national security as a reason for terminating the projects and in July, Attorney General Bonta joined a coalition of 19 attorneys general in moving to intervene in a lawsuit filed by multiple wind energy industry groups against the Defense Department's nationwide freeze of wind energy reviews arguing the policy violates the Administrative Procedure Act's prohibition on arbitrary and capricious agency actions.
Simultaneously, the Trump Administration argued that an energy emergency it declared last year requirs it to use a Cold War-era defense law to forcibly restart oil production at the Santa Ynez Unit locally due to national security concerns.
The same Administration is also responsible for cutting billions in Congressionally-approved energy investments, potentially outside of its legal authority, rescinding over 3.5 million acres of offshore waters already leased for energy generation, and adding $40 billion in subsidies exclusively for the oil and natural gas industry through the One Big Beautiful Bill.
These unilateral exemptions to federal laws on behalf of private oil and natural gas companies and explicit prohibition of alternative sources of energy all under the umbrella of national security are both not new and ongoing.
"These fake settlements have now reached the tune of about $4 billion," Congressman Huffman stated after the latest offshore wind energy termination deal in early August of this year. "Trump is using the Judgment Fund as a slush fund to pay for it. This is the same pot of taxpayer money Acting Attorney General Todd Blanche tried to use for his so-called 'Anti-Weaponization Fund' to pay off convicted J6 [January 6th] felons. Once again, we see this administration's priorities laid bare: treating a fund that exists to resolve valid claims and liabilities as a massive personal slush fund Trump can use to reward criminals, kill off clean energy projects, and do virtually anything else that serves his personal and political interests."
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