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Sustainable Energy & Infrastructure Litigation Updates — August 2025
Friday, August 1, 2025

Federal Regulation

There was a noteworthy development in the ongoing legal challenge to the SEC’s mandatory climate disclosure law (dating from the Biden administration), which is currently pending in the Eighth Circuit. Following the decision by the Trump administration SEC to cease efforts to defend the regulation, the court had directed the SEC to state “whether the Commission intends to review or reconsider the rules at issue in this case,” and if the SEC elects to take no action, “whether the Commission will adhere to the rules if the petitions for review are denied.” In other words, the Eighth Circuit had signaled that the SEC should undergo the normal administrative process to overturn the climate disclosure regulation if the SEC no longer supported it.

On July 23, 2025, the SEC declined to take up the court’s invitation, and instead asked the Eighth Circuit to rule on the legality of the climate disclosure regulation, stating that “a decision from this Court would inform the scope and need for such action, including providing insights as to the Commission’s jurisdiction and authority,” and that such a decision “would [] promote an efficient resolution to the dispute.”

The lone remaining Democratic SEC commissioner took issue with the SEC’s response, noting its failure to answer one of the court’s key questions (e.g., whether the SEC would “adhere to the [R]ules if the petition for review are denied”), and arguing that the “[SEC] was trying to avoid its legal obligations” since “[i]f this Commission wants to rescind, repeal, or modify the Rules, which were promulgated by-the-book, then it must do the statutorily-required work [and] cannot take the easy way out . . . [by] ask[ing] the Court to do the work for us.” It seems probable that the Trump administration SEC is seeking a judicial determination that will limit the scope of the SEC’s authority, thus rendering it far more difficult for the SEC to engage in such climate-focused rulemaking in the future (e.g., under a different administration).

State Regulation

On July 9, 2025, the California Air Resources Board (CARB) — the agency responsible for implementing California’s mandatory climate disclosures — issued additional guidance concerning this regulation, in the form of an FAQ. Specifically, the CARB announced that, despite recent delays, it is still “committed to developing a regulation by the end of the year,” and that, to further compliance efforts, it will “post a public docket for covered entities to post the location of their public link to their first climate-related financial risk report,” as this “public docket will help support transparency.”

The CARB provided additional guidance concerning its enforcement philosophy with respect to the imposition of penalties, emphasizing that a key consideration is “whether the violator took good faith measures to comply,” indicating that companies undertaking “good faith” compliance efforts would be unlikely to suffer significant penalties as a consequence for a violation of the climate disclosure regulation, at least during the initial phase of implementation.

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