Democratic Attorneys General Rally Behind SEC Climate Rule (1)

Massachusetts, New York and 16 other states with Democratic attorneys general, plus the District of Columbia, are looking to protect the SEC’s corporate climate disclosure regulations in court, amid red state and business-led lawsuits.

The Democrats told the US Court of Appeals for the Eighth Circuit on Wednesday that the Securities and Exchange Commission’s rules are “critical” to their states and those who live there. The attorneys general are seeking the court’s approval to join the litigation in defense of the rules, which the SEC paused Thursday.

The Democrats’ motion to intervene came after 25 Republican attorneys general filed lawsuits, which all are pending in the Eighth Circuit. The first case came March 6, the same day the SEC released the requirements for companies to report their greenhouse gas emissions and disclose climate-related risks to their business.

The Democrats filed their motion in connection with a challenge brought by an Iowa-led coalition of states with Republican attorneys general, who said the SEC exceeded its authority. Forty-three states now are trying to participate in the litigation or are already parties in the lawsuits.

“Investors need reliable, comparable information about risks that registered companies face and how they are managing those risks,” the Democratic attorneys general said in their court filing. “Climate-related impacts are undeniably one such category of risk.”

Spokespeople for the SEC and Iowa Attorney General Brenna Bird didn’t immediately respond to requests for comment.

State v. State

Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont, Washington and Wisconsin joined Massachusetts, New York and DC in the motion to intervene.

California is among the seven states that haven’t joined the litigation or aren’t formally looking to enter it at this point. California’s Rob Bonta led a coalition of Democratic attorneys general who urgedthe SEC to require climate disclosures. But the state faces a similar legal challenge to its own set of climate reporting rules for businesses.

Florida is another state that isn’t involved in the lawsuits, even though its attorney general, Ashley Moody, had joined her Republican counterparts in pushing the SEC to abandon its climate reporting plans.

Spokespeople for Bonta and Moody didn’t immediately respond to requests for comment.

In addition to lawsuits from attorneys general, the SEC faces legal challenges from the US Chamber of Commerce, oil companies and other business interests. Environmental groups also have sued the SEC, saying the regulations were too weak.

The case is Iowa v. SEC, 8th Cir., No. 24-1522, motion to intervene filed 4/3/24.