Business groups sue to block California environmental laws. Lawmaker says it’s ‘climate denial’

The U.S. Chamber of Commerce and its California counterpart on Tuesday took legal action to block two 2023 state corporate climate accountability laws from going into effect.

The lawsuit — filed in the U.S. District Court for the Central District of California — targets Senate Bills 253 and 261, and names the California Air Resources Board as the defendant. SB 253, by Sen. Scott Wiener, D-San Francisco, requires companies making more than $1 billion in annual revenue to publish their carbon emissions online. SB 261, by Sen. Henry Stern, D-Canoga Park, requires businesses making more than $500 million in annual revenue to file reports on financial risks to investors related to climate change.

Gov. Gavin Newsom signed both bills into law in October.

“Both laws unconstitutionally compel speech in violation of the First Amendment and seek to regulate an area that is outside California’s jurisdiction and subject to exclusive federal control by virtue of the Clean Air Act and the federalism principles embodied in our federal Constitution,” the lawsuit alleges.

The two laws violate the First Amendment because it “forces thousands of companies to engage in controversial speech that they do not wish to make, untethered to any commercial purpose or transaction,” the suit contends.

“And it does all this for the explicit purpose of placing political and economic pressure on companies to ‘encourage’ them to conform their behavior to the political wishes of the state,” the lawsuit continues.

The filing cites a statement from California Democratic Assemblyman Rick Chavez Zbur of Los Angeles, who said in floor comments during debate on SB 253 last year that the bill has the potential “to reach far beyond California’s borders.”

“The state does not have that authority. While federal law may permit California to regulate greenhouse-gas emissions within the state’s own borders, California has no right to regulate emissions in other states or in other parts of the world, let alone to do so through a novel program of speech regulation,” the lawsuit says.

CARB spokesman Dave Clegern said that the agency does not comment on active litigation.

Besides the U.S. Chamber of Commerce and California Chamber of Commerce, other plaintiffs in the lawsuit include the American Farm Bureau Federation, Los Angeles County Business Federation, Central Valley Business Federation and Western Growers Association.

In a statement, CalChamber President and CEO Jennifer Barrera said that her organization supports cost-effective policies to cut greenhouse gas emissions, but that SB 253 and 261 “are far from cost-effective and they will not have any notable impact on climate change.”

“Compelling businesses to report inconsistent and inaccurate information unnecessarily places them at risk for enormous penalties. This will be particularly costly for small businesses who do not have the resources to accurately measure their climate emissions,” she said.

Stern and Wiener blasted the lawsuit in separate statements Tuesday.

Stern accused the U.S. Chamber of Commerce of manipulating “a handful of misguided California businesses to join this risky act of political theater.”

“Although their arguments are weak, I’m confident that California Air Resources Board and the Attorney General will take this suit seriously. The oil and gas interests funding the Chamber suit are not just trying to undercut these important new laws, but all of our climate laws,” Stern said.

The senator called the lawsuit a “cynical and dangerous ploy” to get the U.S. Supreme Court to rewrite environmental federalism “under the color of some contorted version of the First Amendment.”

In his statement, Wiener said that the chambers’ lawsuit “is straight up climate denial.”

He added that the chamber is taking “extremist legal action” because fossil fuel companies and big banks “are absolutely terrified that if they have to tell the public how dramatically they’re fueling climate change, they’ll no longer be able to mislead the public and investors.”

“The chamber and large corporate polluters don’t want the public to know how much they’re strangling the planet with carbon emissions — that’s why they filed this baseless lawsuit,” Wiener said.

This story was originally published January 30, 2024, 12:23 PM.

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