Ninth Circuit Partially Strikes Down California Climate Disclosure Rules

The Ninth Circuit’s 13‑November ruling divided California’s climate‑disclosure scheme: companies must still report Scope 1 and 2 greenhouse‑gas emissions under the state’s Climate Disclosure Act, but the court found the recent Scope 3 reporting and the broader risk‑assessment provisions under Senate Bill 261 to be likely unconstitutional. The decision effectively removes a major regulatory hurdle for multinationals and large California firms that had been preparing to shoulder Scope 3 data, arguably making the state’s disclosure regime less onerous. Counsel should promptly reassess client compliance programs, focusing on Scope 1 and 2 requirements and advising on the new legal risk profile for Scope 3 data handling and reporting. The ruling also signals a tougher standing‑shoring battle for new environmental disclosures nationwide—law firms must watch for lower‑court responses, cross‑jurisdictional implications, and potential legislative corrections that could alter the future compliance landscape.