SEC Ends Defense of Climate Disclosure Rules in Litigation (1)

The SEC will stop defending corporate emissions reporting requirements in court after the agency under President Joe Biden fought for months to save the rules.

Securities and Exchange Commission lawyers are “no longer authorized to advance” arguments the agency had made in support of the 2024 regulations that require companies to report their greenhouse gas emissions and make other climate disclosures, the SEC said in a filing with the US Court of Appeals for the Eighth Circuit on Thursday.

The withdrawal is the most significant step the SEC has taken toward dismantling the rules after President Donald Trump took office in January. But the regulations will remain in place unless the SEC, a court, or Congress tosses them. The SEC paused the regulations last year after Republican attorneys general, business groups, and others sued to stop them.

The move followed a commission vote in favor of ending the SEC’s defense of the rules in the Eighth Circuit. Republicans hold a majority on the commission.

SEC Acting Chairman Mark Uyeda previously called the rules “deeply flawed” in February. The SEC then told the Eighth Circuit that the agency was in the process of determining next steps in the litigation.

“The goal of today’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,” Uyeda, a Republican, said in a statement.

Commissioner Caroline Crenshaw, the SEC’s sole Democrat, said the withdrawal leaves the court and other participants in the litigation in a “strange and perhaps untenable situation.” She previously voted in favor of issuing the rules last year.

“In effect, the majority of the Commission is crossing their fingers and rooting for the demise of this rule, while they eat popcorn on the sidelines,” Crenshaw said in a statement. “The court should not take the bait.”

The defense of the climate rules now is up to Democratic attorneys general from New York, Massachusetts, and more than a dozen other states, as well as the District of Columbia. The attorneys general joined the litigation in the support of the regulations last year.

A spokesperson for DC Attorney General Brian Schwalb, who is helping lead the Democrats’ defense declined to comment.

The US Chamber of Commerce, fracking company Liberty Energy Inc., and others have argued in court that the climate rules were an abuse of SEC power. The agency disputed the claim when it was under Democratic control in 2024, saying it had the authority to adopt the regulations.

The Eighth Circuit has yet to schedule oral arguments in the litigation. The SEC asked the Eighth Circuit to hold off on setting a date for the hearing until the agency could brief the court on its plans.

The case is Iowa v. SEC, 8th Cir., No. 24-01522, status report filed 3/27/25.