Tag: State of Iowa v. SEC
Acting SEC Chair seeks a pause in SEC climate disclosure rule litigation
Yesterday, Acting SEC Chair Mark Uyeda issued a statement advising that he is requesting that the Court presiding over the SEC’s climate disclosure rule litigation not “schedule the case for argument” in order to allow time for the SEC to rethink its position. As you may know, a number of challenges to the climate disclosure rule were consolidated as State of Iowa v. SEC in the Eighth Circuit, where briefs in the case have been filed. However, for reasons explained in the Statement, Uyeda believes that the “rule is deeply flawed and could inflict significant harm on the capital markets and our economy.” As such, he said, the positions taken in the SEC’s briefs defending the SEC’s adoption of the rule are not reflective of his views. He believes that these views, particularly his concern that the SEC had no authority to adopt the rule, together with “the recent change in the composition of the Commission, and the recent Presidential Memorandum regarding a Regulatory Freeze, bear on the conduct of this litigation.” As a result, he maintains that “the Court and the parties should be notified of these changes.” Accordingly, he has directed the SEC staff to “notify the Court of the changed circumstances and request that the Court not schedule the case for argument to provide time for the Commission to deliberate and determine the appropriate next steps in these cases. The Commission will promptly notify the Court of its determination about its positions in the litigation.” Commissioner Caroline Crenshaw voiced her dissent, contending that what has really changed here has been “politics and not substance.” Does Uyeda’s move sound the death knell for the SEC’s climate disclosure rule?
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.
NRDC and Sierra Club seek exit from SEC climate disclosure litigation
You might recall that the litigation over the SEC’s climate disclosure rules (see, e.g., this PubCo post) was not limited to those, like the Chamber of Commerce, Liberty Energy and the State of Iowa, challenging the SEC’s authority to adopt the rules, but also included some environmental groups—the Sierra Club and the Natural Resources Defense Council—which affirmed the SEC’s authority, but contended that, in rolling back the proposal, the SEC had “fallen short of its statutory mandate to protect investors.” In particular, they were disturbed by the removal in the final rules of requirements to disclose Scope 3 emissions. (See this PubCo post.) Now, both the NRDC and the Sierra Club have moved to voluntarily dismiss their petitions for review..
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