A coalition of seven Northeastern states has filed a lawsuit challenging the Trump administration’s decision to spend nearly $1 billion to terminate a major offshore wind project developed by French energy company TotalEnergies, arguing that the agreement violates federal law.

The lawsuit, filed Tuesday in the U.S. District Court for the District of Columbia, was brought by the attorneys general of Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island and Vermont.

At the center of the dispute is a March agreement between the U.S. Department of the Interior and TotalEnergies under which the federal government agreed to pay approximately $928 million to halt construction of offshore wind developments along the East Coast. The investment was subsequently redirected toward domestic fossil fuel initiatives.

The Interior Department described the arrangement as a landmark energy policy measure intended to lower energy costs, strengthen national energy security and support domestic energy production.

However, the states contend that the administration exceeded its legal authority by using taxpayer funds to cancel the project and compensate the company.

According to the lawsuit, the agreement violates the Outer Continental Shelf Lands Act, which governs offshore energy development and places limits on the federal government’s ability to revoke offshore wind leases.

The coalition argues that the administration’s actions unlawfully undermined a major clean-energy project and disrupted investments intended to expand renewable energy production along the Atlantic coast.

In a statement accompanying the lawsuit, New York Attorney General Letitia James accused the administration of attempting to dismantle clean-energy initiatives and jeopardize jobs tied to the renewable energy sector.

The legal challenge marks the latest clash between Democratic-led states and the Trump administration over energy policy, as federal officials continue efforts to expand fossil fuel production while scaling back support for certain renewable energy projects.

The states are seeking to block implementation of the agreement and restore the offshore wind development plans, arguing that the project is critical to regional clean-energy goals, economic growth and job creation.

The Interior Department has not yet publicly responded to the lawsuit.