The federal district court for the Central District of California dismissed the U.S. Chamber of Commerce and other plaintiffs’ Supremacy Clause (preemption) and extraterritoriality claims challenging California’s laws requiring companies to disclose greenhouse gas emissions and climate-related financial risks. The court dismissed the claims challenging the emissions disclosure law without prejudice as unripe because the law did not on its own mandate action by the plaintiffs’ members or other reporting entities and implementing regulations had not yet been adopted. The court concluded the plaintiffs had standing to challenge the climate-related financial risk disclosure law and that the challenge was ripe but found that the plaintiff failed to state either a Supremacy Clause or extraterritoriality claim. Regarding the Supremacy Clause claim, the court found that the plaintiffs did not support the proposition “that a disclosure regime intended to regulate emissions through third-party actions is a de facto regulatory scheme subject to preemption.” The court also concluded that the law’s compelled disclosure was not preempted based on federalism principles in the Constitution, foreign affairs, or the Clean Air Act. Regarding the extraterritoriality claim, the court found that the plaintiffs could not allege that the law discriminated against interstate commerce or had a discriminatory purpose. Under the Pike test, the court found that the plaintiffs failed to plausibly allege a significant burden on interstate commerce. The court dismissed the extraterritoriality claim without prejudice but dismissed the Supremacy Clause claim with prejudice.

Lawsuit challenging two laws enacted by California that require companies to estimate and publicly disclose greenhouse gas emissions and climate change risks.

Chamber of Commerce of the United States of America v. California Air Resources Board

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Federal Court Dismissed Preemption and Extraterritoriality Challenges to California Climate Disclosure Laws

Filed

United States of America

California

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

This sector involves the wholesale and retail selling of goods.

This sector involves activities to move goods and people, alongside the storage of products.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Federal Court Dismissed Preemption and Extraterritoriality Challenges to California Climate Disclosure Laws

Policy instrument

Risk

Just transition

Fossil fuel

Greenhouse gas

Economic sector

Finance