LOS ANGELES - A group of business advocacy organizations, led by the U.S. Chamber of Commerce, have sued the state of California over its new so-called "climate disclosure mandates," saying the rules amount to an unconstitutional attempt by California to enforce its emissions rules nationwide, while forcing businesses to make themselves targets for political campaigns designed to pressure everyone to fall in line with California's "climate"-related political goals.
The lawsuit was filed Jan. 30 in federal court in Los Angeles, officially against the California Air Resources Board (CARB) and its board chair Liane Randolph and executive officer Steven S. Cliff.
Plaintiffs in the action include the U.S. Chamber, the California Chamber of Commerce, the American Farm Bureau Federation, Los Angeles County Business Federation, Central Valley Business Federation and the Western Growers Association.
"The State’s plan for compelling speech to combat climate change is unconstitutional - twice over," the lawsuit asserts.
The lawsuit takes aim at two California state laws, known as SB253 and SB261. The laws were both signed into law by Gov. Gavin Newsom in October 2023.
Together, the laws would empower CARB to require businesses to publicly report their so-called "greenhouse gas" emissions. Supporters say the measure will help CARB and the state advance the goals of California's Democratic supermajority of reducing carbon emissions, which they blame for alleged "climate change."
In this instance, the laws would create mandates that require businesses operating in California - nominally, those with revenues of at least $1 billion per year - to publicly post a statement "regarding the risks associated with climate change, post those opinions to its own website, and then disclose an inexact, misleading calculation of the 'entity’s' greenhouse-gas emissions," according to the new lawsuit.
However, the lawsuit asserts those "emissions estimates" won't just apply to the nominal $1 billion per year businesses. Rather, the laws would require those businesses to account for alleged emissions released at every stage of their production and sale process.
So, the lawsuit says, this would mean the reports would need to somehow account for the emissions of every supplier and vendor providing goods or services to the larger business, no matter where those other companies may be located, and force the larger business to claim those emissions as their own.
The lawsuit asserts this would then essentially unconstitutionally and illegally extend the authority of CARB to regulate emissions to businesses operating anywhere in the U.S. and around the world.
The lawsuit asserts this would particularly violate the federal Clean Air Act, which they say delegates the authority to regulate such emissions solely to the federal government.
According to the complaint, if they are allowed to stand, such rules would carry deep consequences for the California and U.S. economies, as it would likely lead larger businesses to avoid doing business with small and mid-sized companies, which may lack the financial and technical ability to measure emissions as California demands.
This could lead to rapid consolidation within key sectors of the economy, notably including agriculture, where smaller family farms would be pressured to fold or sell to larger operations and conglomerates.
While violating federal law, the new California mandates further violate the First Amendment, the lawsuit asserts, by forcing companies of all sizes to choose between massive fines or agreeing to parrot the official positions of the state of California and then expose themselves to public stigmatization and campaigns from activists and state officials who could use the publicly reported information to pressure investors, financiers and others not to do business with companies they believe emit too much.
The lawsuit further asserts that such stigmatization was always the point of the new mandates, for many of its supporters.
The complaint, for instance, notes that in remarks delivered on the floor of the State Senate amid debate on the new rules, State Sen. Scott Wiener, D-San Francisco, said the laws were designed to "ensure that corporate actors in [California] are aligned with [the Legislature's] goals and are working as diligently as [legislators] need them to be."
"... Activists and policymakers have repeatedly stated that they intend to use the compelled reporting to identify companies whose emissions they deem to be unsuitable, and to shame those companies into reducing their emissions," the lawsuit states. "A main function of the laws, although framed in terms of reporting, is to facilitate public-pressure campaigns to coerce companies into reducing their emissions of greenhouse gases."
The lawsuit seeks court orders declaring the laws and their CARB mandates unconstitutional and illegal, and barring the state from attempting to enforce them.
The business groups are represented in the action by attorneys Bradley J. Hamburger, Eugene Scalia, Samuel Eckman and Elizabeth Strassner, of the firm of Gibson Dunn & Crutcher, of Los Angeles; and by attorneys Darryl Joseffer, Tyler Badgley and Kevin Palmer, of the U.S. Chamber of Commerce.