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CARB and the Attorney General Defend California's Groundbreaking Climate Change Disclosure Laws in Court

As previously posted, in a landmark legal challenge, a coalition led by prominent business federations is challenging California's pioneering climate disclosure laws, Senate Bill 253 (the Climate Corporate Data Accountability Act) and Senate Bill 261 (the Climate-Related Financial Risk Act). These laws mandate unprecedented disclosure of climate-related financial risks and greenhouse gas emissions by large companies, both public and private, operating in California. Now the defendants in Chamber of Commerce of the United States of America v. Bonta are pushing back.

On March 27th, defendants moved to dismiss some of the plaintiffs’ claims for lack of standing and on justiciability grounds. Defendants assert that because CARB (the California Air Resources Board) has not issued final rules, or even begun the rulemaking process, the challenge to the laws is not ripe for judgement, writing “there is no threat of any immediate enforcement here….it is appropriate for the Court to withhold consideration at this time.”

Defendants also argue that the Plaintiffs’ Supremacy Clause theory fails because the Clean Air Act, the federal law plaintiffs argue preempts California’s climate change disclosure laws, regulates emissions rather than disclosures and, therefore, it cannot preempt California’s laws regulating an entirely different subject matter. Defendants claim that no plaintiff has identified “an actual injury from planning to comply with the law’s requirements. Nor does any entity claim that it would incur costs…that it would not [otherwise] incur as part of obligations under other reporting regimes.”

Finally, defendants argue that Attorney General Bonta, who plaintiffs added to the lawsuit in their first amended complaint as a defendant in his official capacity, must be dismissed on sovereign immunity grounds because the Attorney General’s role has no “plausible connection to enforcement of the laws at issue.” Critically, the motion does not address plaintiffs’ first amendment challenges to the climate disclosure laws.

California’s reporting requirements are not the only corporate climate disclosure laws currently being litigated. Within hours of the SEC’s issuance of its final rule regarding the Enhancement and Standardization of Climate-Related Disclosures for Investors including corporate disclosures on public filings like 10-Ks, SEC was hit with multiple lawsuits in various venues challenging the constitutionality of the final rule. The federal litigation has just been consolidated into a single multidistrict litigation to be heard in the Eighth Circuit Court of Appeals. The United States Chamber of Commerce is a plaintiff in both the California and SEC challenges.

We will keep you posted as both lawsuits move forward in tandem.

Categories: Climate Change