U.S. District Judge Dismisses Two Claims Against Climate Reporting Law
On February 3, 2025, a U.S. District Court judge dismissed two claims in the lawsuit brought by the U.S. Chamber of Commerce and other business groups against California’s carbon reporting laws.
A coalition of business groups filed a lawsuit challenging SB 253 and SB 261, two new California laws that require companies to report greenhouse gas emissions (GHG) and climate risks. The lawsuit contended that the laws violate the First Amendment by compelling speech on a “politically controversial” topic and that the Clean Air Act preempts California’s “de facto regulations of greenhouse-gas emissions nationwide.”
The judge in the Central District of California granted the state’s motion in dismissing claims that the Clean Air Act preempts the two laws and that the laws burden interstate commerce. The remaining claim is that the laws compel speech about climate change in violation of the First Amendment.
The ruling noted that the California Air Resources Board (CARB) must develop regulations to implement SB 253 and require businesses with more than $1 billion in annual revenue to report their greenhouse gas emissions. The regulations were originally due on January 1, 2025 and have been delayed until July. The judge wrote that it is “not clear to the Court that any possible regulations CARB issues would impermissibly burden interstate commerce or violate the Supremacy Clause.”
For SB 261, the judge ruled that the Chamber of Commerce failed to make a claim that it violates the Constitution. The judge ruled that the law does not force actual reductions of greenhouse gas emissions but seeks to shame companies to pressure them to reduce emissions. The judge ruled that the plaintiffs failed “to cite any relevant authority to support the proposition that a disclosure regime intended to regulate emissions through third-party actions is a de facto regulatory scheme subject to preemption.”