The SEC files its brief in climate disclosure litigation

Here’s an excerpt from this blog by Cooley’s Cydney Posner:

Now, the SEC has filed its almost 25,000-word brief in the consolidated case, contending that petitioners have set up a “strawman—challenging reimagined rules that the Commission did not enact and criticizing a rationale that the Commission expressly disclaimed.” More specifically, the SEC’s brief defends its authority to adopt these rules and the reasonableness of its actions and process under the APA and contends that, as compelled commercial (or commercial-like) disclosure, the rules are consistent with the First Amendment.

In one of their briefs, petitioners contend that the SEC’s climate rules create “an entirely new regulatory scheme for one topic—climate change”—that exceeds the SEC’s authority, violates the First Amendment and is arbitrary and capricious.  In sum, the rules, they profess, are “unlawful several times over,” not to mention sweeping, expensive, prescriptive, unprecedented and unnecessary.  The rules, they argue, represent another effort by the Executive Branch to achieve its environmental aims, not through Congress, but rather “through the back door.” According to petitioners, the climate rules are “the quintessential rule ‘in search of [a] regulatory proble[m].’” In petitioners’ view, the current Administration is bent on pursuing a broad climate agenda—regardless of whether Congress has authorized that agenda; the SEC has responded to the Administration’s demand with a proposal for “unprecedented new regulation that would require companies to disclose massive amounts of non-financial climate information.”

The SEC, however, begs to differ. In petitioners’ challenge, the SEC argues, they “attack a strawman.  This case is not about climate change or environmental policy; it is about protecting investors.”