This week, a group of plaintiffs consisting of the US Chamber of Commerce, the California Chamber of Commerce, the American Farm Bureau Federation, and others, sued California over two new California laws signed into law last year.
In October of 2023, California Governor California Gavin Newsom signed two bills into law that require companies to disclose certain climate related information. One of the laws, SB 261, requires certain companies to prepare and disclose, before January 1, 2026 (and biennially thereafter), "a climate-related financial risk report disclosing the entity's climate-related financial risk and measures adopted to reduce and adapt to climate-related financial risk." The other, SB 253, requires certain companies to, by January 1, 2025, disclose to an emissions reporting organization the extent of the company's scope 1, 2, and 3 emissions, and emissions of greenhouse gases.
The lawsuit, filed this week in the Central District of California, alleges that the laws "unlawfully attempt to regulate speech related to climate change" and "impermissibly compel thousands of business to make costly, burdensome, and politically fraught statements about 'their operations, not just in California, but around the world.'" The suit claims that the laws violate the First Amendment, are "precluded by federal law and run headlong into the Dormant Commerce Clause and broader federalism principles" and asks the Court to bar the defendants from enforcing them.
Notably, these are not the only new laws in California compelling the disclosure of certain climate related information. Also in October, the Governor of California signed into law the California Voluntary Carbon Market Disclosures Act. But, the VCMDA only applies to companies who are making certain types of carbon emissions claims, unlike SB 253 and 261, which are more broadly applicable.
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