Yesterday, the SEC announced that the Commissioners had voted to end the SEC’s “defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions”—the climate disclosure rules. As you probably 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 had been filed. Then, in February, Acting Chair Mark Uyeda issued a statement advising that he had requested that the Court presiding over the litigation not “schedule the case for argument” in order to allow time for the SEC to rethink its position. And here it is: according to Uyeda, “The goal of yesterdays’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules.”
As soon as the SEC adopted final rules “to enhance and standardize climate-related disclosures by public companies and in public offerings” in March 2024 (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 his Statement pausing the litigation, Uyeda explained that he believes that the “rule is deeply flawed and could inflict significant harm on the capital markets and our economy.” (See this PubCo post.)
Following yesterday’s vote, the SEC staff notified the court of the SEC’s action:
“As the Court is aware, on February 11, 2025, the Commission’s Acting Chairman issued a statement regarding this litigation. That statement noted, among other things, that a majority of the current Commissioners voted against the rules at issue in this litigation (the ‘Rules’). The statement directed Commission staff to notify the Court of these changed circumstances and to request that the Court not take any action to schedule oral argument, and it stated that the Commission would notify the Court of its determination about its positions in this litigation. The Commission submitted a letter notifying the Court of this statement, which also provided that the Commission would submit a status report to the Court no later than March 28, 2025. Since that time, the Commission has determined that it wishes to withdraw its defense of the Rules. The Court would not need to reach the petitioners’ challenges based on the First Amendment or non-delegation doctrine if it sets the Rules aside on other grounds. Because Commission counsel is no longer authorized to advance the arguments presented in the Commission’s response brief, the Commission yields any oral argument time back to the Court or to other parties as the Court determines.”
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