Ninth Circuit Temporarily Enjoins California Climate Disclosure Law
The Ninth Circuit blocks enforcement of SB 261, delaying mandatory climate disclosures for California firms.
In a narrow 4‑to‑1 vote, the Ninth Circuit issued a preliminary injunction against enforcement of California Senate Bill 261, the state’s climate‑related disclosure requirement that obliges regulated entities to report greenhouse‑gas emissions, carbon‑intensity metrics, and climate‑risk strategies. The court cited potential irreparable harm to businesses and lack of evidence that the statutory framework adequately balanced First Amendment and due‑process concerns. The injunction does not alter the statute itself, but it pauses its implementation pending further litigation, leaving California firms uncertain about future compliance deadlines.
Lawyers should assess whether SB 261 applies to their clients’ operations, advise on interim disclosure practices that may satisfy other regulators or investors, and monitor the court’s subsequent rulings. Clients with cross‑border exposure should evaluate whether California‑based subsidiaries could be affected by the pending injunction. A final judgment could either lift the injunction and impose the disclosures or sustain the order and reshape California’s regulatory climate. Counsel should prepare contingency compliance plans and keep abreast of the next appellate step.