The SEC has determined, in this Order posted today, to exercise its discretion to stay the final climate disclosure rules “pending the completion of judicial review of the consolidated Eighth Circuit petitions.” If you have been following the SEC travails regarding the climate disclosure rules, you know that there were ten different petitions—the tenth petition having been filed by the National Legal and Policy Center and the Oil and Gas Workers Association—consolidated in the Eighth Circuit, challenging the rules and several asking the court for a stay. The SEC had opposed the stay. (See, e.g., this PubCo post, this PubCo post and this PubCo post.) (One of the petitioners, Liberty Energy, even filed a precautionary complaint challenging the final rules in a Texas District Court, just in case jurisdiction was ultimately not accepted in the Court of Appeals.) At the end of March, the SEC had filed a motion to establish a consolidated briefing schedule relating to all of the motions seeking a stay; 31 petitioners opposed the SEC’s motion, instead asking the court to expedite briefing on the existing and expected emergency stay motions. Under the Exchange Act and the APA, the SEC “has discretion to stay its rules pending judicial review if it finds that ‘justice so requires.’” According to the Order, the SEC has determined that justice requires that the SEC stay the final rules.
As stated in the Order:
“In issuing a stay, the Commission is not departing from its view that the Final Rules are consistent with applicable law and within the Commission’s long-standing authority to require the disclosure of information important to investors in making investment and voting decisions. Thus, the Commission will continue vigorously defending the Final Rules’ validity in court and looks forward to expeditious resolution of the litigation. But the Commission finds that, under the particular circumstances presented, a stay of the Final Rules meets the statutory standard. Among other things, given the procedural complexities accompanying the consolidation and litigation of the large number of petitions for review of the Final Rules, a Commission stay will facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits. Further, a stay avoids potential regulatory uncertainty if registrants were to become subject to the Final Rules’ requirements during the pendency of the challenges to their validity.”
