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Implications of West Virginia v. EPA on Proposed SEC Climate Rules

The Supreme Court, in West Virginia v. EPA, effectively limited the ability of the EPA to issue significant regulations designed to address climate change absent further Congressional action.  And any Congressional legislation on this issue has, to date, been stymied by resistance from individuals within the razor-thin Democratic majority (especially Senator Manchin (D-W.V.)).  This decision has basically removed one of the key administrative and regulatory tools that the Biden Administration was planning to use in furtherance of its climate agenda. 

This development thus places a greater emphasis--and greater burden--on the SEC's proposed mandatory financial disclosures regarding climate change, as that regulatory rule-making by the SEC remains (for the moment) an available tool for the Biden Administration to achieve its climate goals.  In effect, the SEC's proposed mandatory climate disclosures--which will have, at best, an indirect impact on actions taken to combat climate change--have now become one of the primary weapons in the Biden Administration's arsenal.  This suggests that the SEC's proposed rules will likely be framed in as robust a manner as possible, in order to advance the Biden Administration's climate agenda to the maximum possible extent.

However, the reasoning behind this decision by the Supreme Court suggests, as many commenters have predicted, that the new conservative super-majority will seize opportunities to limit the role of the administrative state and regulatory agencies generally.  And the SEC's proposed mandatory climate disclosures are yet another example of a far-reaching regulation apparently without explicit Congressional authorization--the precise scenario to which the Supreme Court's current majority has expressed considerable skepticism.  As has been amply demonstrated by the statements and actions of various concerned parties--including Republican SEC Commissioners--ever since the SEC announced that they would consider issuing such a rule, the proposed mandatory climate disclosures will confront a challenge to their very existence, and the various legal critiques proffered may well find receptive ears in the judiciary.  So, the SEC's proposed mandatory climate disclosures, which are now one of the Biden Administration's few remaining potent regulatory tools, may themselves be vulnerable to legal challenge in the courts.  It should be anticipated that a lawsuit challenging the legitimacy of these climate disclosures will be filed as soon as the regulation is issued, and only time will tell whether, and to what extent, the climate disclosures will withstand judicial scrutiny and survive as regulations.   

One by one, the tools available to President Biden to fight climate change are being stripped away.

After a Supreme Court decision on Thursday, the Environmental Protection Agency will have less authority to limit carbon dioxide from power plants, a major source in this country of the pollution that is dangerously heating the planet.

It’s one in a series of setbacks for Mr. Biden, who came into office with the most ambitious climate agenda of any president, pledging to the rest of the world that the United States, the world’s largest historic emitter of greenhouse gases, would cut that pollution in half by the end of the decade.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XII, Number 182
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About this Author

Jacob Hupart Commercial Attorney Litigation Mintz Levin Cohn Ferris Glovsky and Popeo PC
Member

Jacob has a multifaceted litigation practice that encompasses complex commercial litigation, including cases involving securities, employment, and environmental claims, as well as class action litigation, white-collar criminal defense, and regulatory investigations. He has extensive experience handling all phases of litigation before federal and state courts, managing discovery, and conducting settlement negotiations. Jacob has represented clients in a variety of industries, including financial services, energy, education, and the media.

Prior to joining Mintz, he was an associate...

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