US Appeals Court Hits Pause on Challenges to SEC Climate Rule

Article

A federal appeals court on Friday said it was pausing its consideration of legal challenges against the U.S. Securities and Exchange Commission’s climate regulations until the Wall Street regulator decides whether it plans either to change them or to defend them in court, court papers showed.

Under former President Joe Biden, the SEC adopted rules requiring publicly traded companies to tell investors about climate-related risks, emissions and spending, with Republican-led states and one industry group immediately challenging this in court. Under Republican President Donald Trump, the SEC voted in March to cease defending the rule.

In an order on Friday, the U.S. Court of Appeals for the Eighth Circuit said that, because the SEC had refused either to defend the rule in court or say whether it planned to modify or scrap the rule entirely, the legal challenges “will be held in abeyance to promote judicial economy.”

“It is the agency’s responsibility to determine whether its Final Rules will be rescinded, repealed, modified or defended in litigation,” the order said, noting that the SEC had already stayed the regulations’ effective date during the legal challenge, meaning a delayed court decision would not cause harm.

Representatives for the SEC did not immediately respond to a request for comment but the agency told the court in July that it did not intend to reconsider the rule, calling on the court instead to proceed with the case regardless.

(Reporting by Douglas Gillison in Washington; Editing by David Gregorio)