Tag: Chamber of Commerce v. SEC

administrative lawESGLitigation

In litigation over the SEC climate disclosure rules, have petitioners created a strawman?

As soon as the SEC adopted final rules “to enhance and standardize climate-related disclosures by public companies and in public offerings” in March (see this PubCo post, this PubCo post, this PubCo post, and this PubCo post), there was a deluge of litigation—even though, in the final rules, the SEC scaled back significantly on the proposal, putting the kibosh on the controversial mandate for Scope 3 GHG emissions reporting and requiring disclosure of Scope 1 and/or Scope 2 GHG emissions on a phased-in basis only by accelerated and large accelerated filers and only when those emissions are material. Those cases were then consolidated in the Eighth Circuit (see this PubCo post) and, in April, the SEC determined to exercise its discretion to stay the final climate disclosure rules “pending the completion of judicial review of the consolidated Eighth Circuit petitions.” (See this PubCo post.) There are currently nine consolidated cases—with two of the original petitioners, the Sierra Club and the Natural Resources Defense Council, having voluntarily exited the litigation (see this PubCo post), and the National Center for Public Policy Research having filed a petition to join the litigation more recently. (See this PubCo post). In June, petitioners began to submit their briefs (see this PubCo post).  Now, the SEC has filed its almost 25,000-word brief in the consolidated case, contending that petitioners have set up a “strawman—challenging reimagined rules that the Commission did not enact and criticizing a rationale that the Commission expressly disclaimed.” More specifically, the SEC’s brief defends its authority to adopt these rules and the reasonableness of its actions and process under the APA and contends that, as compelled commercial (or commercial-like) disclosure, the rules are consistent with the First Amendment.

/ August 13, 2024
Executive CompensationSecurities

Bring back the buyback rule?

According to Bloomberg, there’s now a bipartisan push to re-propose the SEC’s stock buyback rule. As you may remember, the SEC’s Share Repurchase Disclosure Modernization rule, adopted in 2023, required quarterly reporting of detailed quantitative information on daily repurchase activity, filed as an exhibit to the issuer’s periodic reports. But, last year, the Chamber of Commerce petitioned the Fifth Circuit for review of the rule, and, in Chamber of Commerce of the USA v. SEC, the court granted the petition, holding that the “SEC acted arbitrarily and capriciously, in violation of the APA, when it failed to respond to petitioners’ comments and failed to conduct a proper cost-benefit analysis.” However, recognizing that there was “at least a serious possibility that the agency will be able to substantiate its decision given an opportunity to do so,” the court decided that, instead of vacating the rule, it would allow the SEC 30 days “to remedy the deficiencies in the rule,” and remanded the matter with directions to the SEC to correct the defects in the rule. But the SEC was unable to correct the defects on a timely basis, and the court vacated the rule. (See this PubCo post.)  Now, Senators Marco Rubio and Tammy Baldwin have submitted a letter to the SEC urging the SEC “to promptly re-propose the rule.”

/ May 10, 2024
ESGLitigationSecurities

California moves to dismiss complaint challenging climate disclosure laws

Since we’ve been preoccupied with the litigation over SEC’s climate disclosure rules, it’s time for a break. Something new and different.  How about the litigation over the California climate disclosure rules: Senate Bill 253, the Climate Corporate Data Accountability Act, and Senate Bill 261, Greenhouse gases: climate-related financial risk? (See this PubCo post.) In January, the U.S. and California Chambers of Commerce, the American Farm Bureau Federation and others filed a complaint (and in February, an amended complaint) against two executives of the California Air Resources Board and the California Attorney General challenging these two California laws. The lawsuit seeks declaratory relief that the two laws are void because they violate the First Amendment, are precluded under the Supremacy Clause by the Clean Air Act, and are invalid under the Constitution’s limitations on extraterritorial regulation, particularly under the dormant Commerce Clause.  The litigation also seeks injunctive relief to prevent CARB from taking any action to enforce these two laws. (See this PubCo post.) CARB has just filed a motion to dismiss the amended complaint for lack of subject matter jurisdiction and failure to state a claim. Interestingly, however, the motion does not seek dismissal of Plaintiffs’ First Amendment claim (except as to the Attorney General, whom the motion seeks to exclude altogether on the basis of sovereign immunity), even though CARB asserts that  Plaintiffs’ First Amendment challenge is “legally flawed.” No further explanation is provided.

/ April 1, 2024
ESGLitigationSecurities

SEC requests court deny stay in climate disclosure rules litigation

It’s been a day or two now—what’s going on with the SEC’s climate disclosure rules litigation?  When we left our tale, petitioners Liberty and Nomad had submitted this notice of pending emergency motion advising the Eighth Circuit of their request for a new administrative stay and a stay pending judicial review in connection with their petition challenging the rules.  And the SEC was directed to file a response by the close of business yesterday. (See this PubCo post.) As directed by the Court, the SEC did submit a letter of response. Now, another petitioner, the U.S. Chamber of Commerce, has also moved for a stay pending appeal. And a new petition for review has been filed.

/ March 28, 2024