Judge rejects request to block California emissions law (2024)
| Environmental, social, and corporate governance |
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What’s the story?
U.S. District Judge Otis Wright II denied a request from the U.S. Chamber of Commerce and other business groups to block two California laws requiring corporate climate emissions data disclosures for large companies doing business in the state.
Why does it matter?
If the California laws are upheld in court as constitutional, companies with more than $1 billion in revenues that do business in California will have to report Scope 1 (operations), Scope 2 (purchased energy), and Scope 3 (supply chain) emissions, beginning in 2026. The court’s ruling last week allowed the law to move forward but also left room for further legal challenges.
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Following the approval of the new climate disclosure laws, the U.S. Chamber of Commerce, alongside other business groups, filed a lawsuit against the state, arguing that the new rules would violate the first amendment by compelling businesses to engage in subjective speech, and claiming that supply chain emissions 'can be nearly impossible for a company to accurately calculate,' and that they would obligate companies to 'subjectively report their worldwide climate-related financial risks and proposed mitigation strategies.' The plaintiffs requested a 'summary judgement' to block the law immediately, and prior to providing evidence in the discovery phase. The judge appeared to criticize the plaintiffs’ choice to present the case as a 'facial challenge,' in which such legislation would always be deemed unconstitutional and immediately dismissed, stating that the decision to do so 'comes at a cost.' The judge added that without discovery, the court did not have sufficient information to determine 'which of the laws’ applications violate the First Amendment,' and to 'measure the constitutional against the unconstitutional applications.' The ruling also noted, however, that it disagreed with the state’s argument that that the new law should not be subject to First Amendment scrutiny, but noted that as it may be classified as a law regulating commercial speech, which could be subject to a lower standard of scrutiny, particularly as the rules were designed to 'prevent companies from making potential misleading statements,' and as 'many companies advertise their business as ‘green’ or emissions conscious,' and as pursuing net zero goals.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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