Ninth Circuit Blocks California SB 253 Scope 3 and SB 261 Climate Disclosure
The Ninth Circuit left California's SB 253 Scope 1 and 2 emissions reporting intact but held SB 253 Scope 3 reporting and SB 261 climate-risk disclosure likely unconstitutional under the First Amendment.
On November 9, 2026, the US Court of Appeals for the Ninth Circuit narrowed California's climate disclosure regime, addressing challenges to Senate Bill 253 (greenhouse gas emissions reporting) and SB 261 (climate-related financial risk reporting). The panel affirmed denial of a preliminary injunction as to SB 253's Scope 1 and 2 requirements, leaving the California Air Resources Board's November 10, 2026 first-year reporting deadline in effect, so covered companies should proceed with planned Scope 1 and 2 submissions. Separately, the court held that SB 253's Scope 3 reporting requirement, scheduled to begin in 2027, and SB 261's disclosure obligations are likely unconstitutional under the First Amendment and that preliminary injunctive relief is warranted as to both. On remand, the district court must decide whether the Scope 3 provisions are severable from the rest of SB 253 before entering relief, which could affect the statute's surviving requirements. Sophisticated clients care because the decision reshapes multi-year disclosure build-out and compliance obligations, and because California may seek rehearing or US Supreme Court review, making the remand and any certiorari petition the developments to watch.