On November 5, 2024, a U.S. district judge denied a motion for summary judgment from against California’s climate reporting laws on the claim that the laws violate the First Amendment.
The Chamber of Commerce and other business groups have challenged SB 253, known as the Climate Corporate Data Accountability Act, and SB 261, known as the Climate-Related Financial Risk Act, as compelled speech in violation of the First Amendment.
The plaintiffs claim that the laws violate the constitution on their face. They argued that “strict scrutiny” applies in reviewing the law and not the lower level of “intermediate scrutiny” that is applied to commercial speech. The judge, however, ruled that there was not enough information to determine the level of scrutiny to apply to the laws.
In support of their claim, the plaintiffs argued that SB 253 and SB 261 “do not regulate commercial speech and the regulated speech is not purely factual and uncontroversial.”
“To determine which level of scrutiny to apply,” the judge wrote, “the court needs a record on whether SB 253 and 261 regulate a substantial number of companies that do not make potentially misleading environmental claims.” The judge noted that the “absence of real-world examples of SB 253’s and 261’s overinclusvieness directly impacts whether SB 253 and 261 are appropriately tailored to the State’s aims.”
The U.S. Chamber of Commerce and other business groups filed the lawsuit in January 2024, shortly after the bills were signed into law, arguing that the laws violate the First Amendment by compelling speech on a “politically controversial” topic and that the Clean Air Act preempts California’s “de facto regulations of greenhouse-gas emissions nationwide.”