Opponents of a pair of radical California “green” mandates were handed a mixed bag in court last week as the Ninth Circuit Court of Appeals temporarily paused implementation of one state law but allowed another to remain in place for now. The brewing court battle could have serious implications for businesses nationwide – and the entire U.S. economy.
The first law in question, SB 261, titled “the Climate-Related Financial Risk Act,” requires companies operating in California with more than $500 million in annual revenue to publish a report outlining their “climate-related financial risks.” Critics argue that SB 261 effectively compels speech that many businesses may not agree with or may find politically loaded by coercing companies to publicly acknowledge that climate change exists in the first place, and to affirm that their actions may contribute to it. Additionally, SB 261 will impose enormous compliance costs, which will be passed on to consumers.
The law, which Governor Gavin Newsom signed in 2023, was set to go into effect on January 1, 2026. But the Ninth Circuit has nullified that deadline, temporarily staying the law.
The U.S. Chamber of Commerce initiated the lawsuit to challenge SB 261, joined by several business and industry groups. Along with appealing to the Ninth Circuit, the aligned organizations also asked the Supreme Court to weigh in.
Iowa Attorney General Brenna Bird led an amicus brief to the Supreme Court on behalf of 25 Republican state attorneys general, explaining in a news release that SB 261 would “impose nightmarish compliance costs and liability that will cripple companies across the country.” The brief further describes the mandates as “speculative, viewpoint-laden climate disclosures” that go beyond the factual information the government ordinarily requires from companies.
Following the Ninth Circuit ruling, Alliance for Consumers Executive Director O.H. Skinner told AMAC Newsline that he was “thrilled to see California’s attempt to export its disastrous energy policies rebuked by the courts just as voters have repeatedly rejected these green mandates at the ballot box.”
“We applaud the attorneys general for standing up for everyday consumers by fighting Newsom’s tyrannical ‘green’ policies that raise costs and reduce choices at the store,” Skinner added. “Climate disclosure mandates are a boon for Democrat-allied trial lawyers who reap the rewards of woke lawfare, while everyday consumers pay the price. Coastal elites like Gavin Newsom should focus on unwinding the cost-of-living crisis created by their own policies instead of imposing progressive lifestyle choices on the entire nation.”
However, while conservatives can celebrate that SB 261 has been paused – for now – the Ninth Circuit declined to temporarily block another radical California law, SB 253, which is set to take effect next August. The U.S. Chamber of Commerce and aligned groups had asked the Ninth Circuit and the Supreme Court to pause both SB 261 and SB 253.
SB 253, titled “the Climate Corporate Data Accountability Act,” requires disclosures from companies with more than $1 billion in annual revenue about their greenhouse gas emissions. In their amicus brief to the Supreme Court, the Republican attorneys general warn of irreparable economic harm stemming from SB 253, writing that the law will impose “unrecoverable economic burdens, distorted markets, and chilled investment in key industries” by forcing thousands of out-of-state companies to spend millions on reporting emissions and risks “that extend far beyond California’s borders.”
As the attorneys general allude to, the reporting thresholds for both laws appear to apply to revenue that companies earn nationwide, not just in California. Even a company headquartered in another state that brings in only a small portion of its revenue from California would be forced to comply if its national or global revenue exceeded $500 million for SB 261 or $1 billion for SB 253. According to The Washington Post, SB 261 would force compliance from more than 4,100 businesses, while SB 253 would require disclosures from about 2,600 businesses.
This is one of the most powerful arguments that opponents of SB 261 and SB 253 have on their side; specifically, that the laws inflict “sovereign harm” by allowing California to act as a national climate regulator and override other states’ policy choices. As Bird put it, “California has no right to tell Iowa or any other state what to do.”
While the ongoing court battle has raged on largely under the radar, it could gain increased national significance in the months ahead as the battle for the White House in 2028 comes into focus. Newsom has been floated as a top contender for the Democrat nomination, and his actions as governor will be scrutinized as a preview of what voters could expect from him as president.
Ultimately, the fate of both laws will likely be decided at the Supreme Court. But this is one court battle that is worth paying attention to as Democrats, after being rejected at the ballot box last year, attempt to backdoor their radical climate agenda through blue-state mandates with nationwide implications.
Sarah Katherine Sisk is a proud Hillsdale College alumna and a master’s student in economics at George Mason University. You can follow her on X @SKSisk76.
Brandon and Newscum rant about President Trump being a tyrant and yet they are the mandate loving … I am better than you … anti-freedom … worst of the worst tyrants
Anyone supporting green mandates should be supporters of ICE.
Gov. Goodhair wants the rest of the country to be as bankrupt as Mexifornia is today.
California is under, swimming in red ink, and the gov. worries about the” Climate change”, that is to top issue, not the economy or the fact that bottom has fallen out, horn of plenty is empty There is nowhere to hide from it, just the consequence of the insane unsustainable policies which he insists on implementing still. And he is poised to become a President, what kind of fantayeland does he live in?
ok, all companies the have this level of business, don’t do business in Cali. that should take care of it.
Wonder if Mexico would take Mexifornia back but it would have to include Newsom and all the democraps. But not before the US builds a wall preventing the democraps from leaving.
I agree with the Iowa Attorney General. When in the depths of winter in Central Illinois, still waiting for a “bit” of so-called global warming!!!!
So, does the rest of the nation want a California dystopia? You already know that California has the highest everything in the nation, but let’s start there: Highest income taxes, the highest sales taxes, the highest DMV taxes, the highest property taxes, highest gasoline prices, the highest insurance prices and the highest electricity prices. Now add fees to the mix: recycling fees, lumber fees, paint fees, electronic waste fees, battery disposal fees, hazardous waste fees. It’s as if the sole purpose of California’s politicians is to take your money or put commerce out of business under the guise of environmental compliance. What appears is those so called representatives are the farthest thing from looking out for their constituents, instead finding new ways to hold hostage the last remaining residents while the smart ones abandon this sinking ship. And since when did California become the environmental standard? Maybe it’s the way they shutter oil refineries or power plants, but be careful who you follow, your state need look no further than a bankrupt California who can’t manage a high speed train to nowhere or keep residents safe from devastating fires.
Allow me, if you will, to introduce a thought into this discussion. It is a corollary to an age-old adage, don’t tear up the message (like the wicked witch of the west did) just because you dislike (a word gentler than despise) the messenger. There is nothing wrong with the legislature addressing the underlying issues that prompted this statute. The deep offense lies in the subsequent actions; mandating particular activities to deal with problems they identify as such and thinking only they (the left) is capable of determining what the problems are and what activities need implementation. Those discussions should be held in the boardrooms of corporate America, and the board of directors should choose what is in the best interest of its stockholders from the viewpoints of both potential liability (defensive position) and marketing power (offensive position). Adopting responsible protocols for dealing with the liability issues will be useful in the courts when questions of pollution arise, and marketing decisions will affect the bottom line. Consider the blue jeans ad of recent debate. Should the government be able to declare it racist and keep it off the air? Or should the board of directors of that company be able to decide for itself that the downside of a potential misguided viewpoint is minor compared to the potential upside of the power of the message the ad actually conveyed. I think most sane people would admit the ad would have been just as effective 45 years ago if the girl struggling to get into the skin-tight jeans was Halle Berry. Let’s face it, male lust and the willingness of most average females to use that lust to her advantage, has existed since Eve convinced Adam to take a bite of the apple. Attributing any other message of that ad was sheer stupidity. I remind you that liberalism is a mental disorder.
This pile of garbage should be buried in California.