Ninth Circuit Enjoins Enforcement of Climate-Related Financial Risk Act Disclosure Obligation

Key Takeaways

  • The Ninth Circuit granted an injunction request to block enforcement of a California climate disclosure law that requires companies “doing business in California” and with $500 million of annual revenues to make public climate risk and mitigation disclosures starting January 1, 2026.
  • The Ninth Circuit did not grant an injunction request to block enforcement of a California climate disclosure law that requires that companies “doing business in California” and with $1 billion of annual revenues to disclose their greenhouse gas emissions, but the California Air Resources Board (CARB) has extended the compliance deadline for this law from June 30, 2026 to August 10, 2026.

On November 18, 2025, in Chamber of Commerce of the United States of America v. California Air Resources Board 1, the U.S. Court of Appeals for the Ninth Circuit, on appeal, granted in part a request from the U.S. Chamber of Commerce and other trade associations for a preliminary injunction to block enforcement of one of two significant California climate disclosure laws, overturning, in part, the U.S. District Court for the Central District of California’s denial of such preliminary injunction, further detailed in a October 2025 Dechert OnPoint (available here).

On the same day, the California Air Resources Board (CARB), the state government entity responsible for further developing and enforcing the requirements of certain California climate disclosures laws, held its third public workshop (CARB’s Workshop) to update the public on matters related to the implementation of these laws.

In an order issued during CARB’s Workshop, the Ninth Circuit enjoined enforcement of the Climate-Related Financial Risk Act or SB 261, a law that, if enforced, requires U.S. companies “doing business in California” (including financial services companies and asset managers)2 with annual revenues of over $500 million to prepare and make publicly available biennially a public report that discloses climate-related financial risks and that outlines how such in-scope company intends to address the disclosed risks. The disclosure deadline set forth in SB 261 is January 1, 2026.

The Ninth Circuit did not grant the request for a preliminary injunction to block enforcement of the California Corporate Data Accountability Act, or SB 253, a law that if enforced would require any U.S. company that does business in California and that has total annual revenues of over $1 billion to publicly disclose (on a graduated timeline) its Scope 1, Scope 2 and Scope 3 greenhouse gas emissions. The disclosure deadline set forth in SB 253 had been June 30, 2026, but during CARB’s Workshop it was announced that the disclosure deadline will be pushed back to August 10, 2026.

Following the Ninth Circuit’s order, the appellants withdrew their emergency application for injunction pending appeal that they had filed with the U.S. Supreme Court on November 10, 2025,3 in which they had similarly requested that the Supreme Court block enforcement of SB 261 and SB 253.4

Firms that are potentially within scope of SB 261 and/or SB 253 may want to follow developments in the Chamber of Commerce litigation in the coming months. It is not clear yet how CARB will respond to the Ninth Circuit’s order in developing implementing regulations and deadlines for the two laws.

Footnotes

  1. Chamber of Com. of the U.S., v. Ca. Air Res. Bd., No. 25-5327 (9th Cir. Nov. 18, 2025).
  2. CARB confirmed and clarified in its November 18th workshop that “doing business in California” would follow Revenue and Tax Code § 23101, omitting § 23101(b)(3-4), for both SB 253 and SB 261, the prongs addressing property owned and payroll made in California. Thus, under this proposed definition, an entity doing business in California is one actively engaging in any transaction for the purposes of financial gain or pecuniary gain or profit and such entity is either organized or commercially domiciled in California or has Sales, as defined in the Revenue and Tax Code, in California of $735,019, adjusted for inflation. Staff have proposed that non-profit and charitable organizations and entities whose only business in California is the presence of teleworking employees be exempt. Certain government-owned entities and insurers are excluded by statute. SB/253/261/219 Public Workshop: Update on California Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure Programs, Cal. Air. Res. Bd. (Nov. 18, 2025).
  3. Plaintiff’s Emergency Application for Injunction Pending Appeal, Chamber of Com. of the U.S., v. Ca. Air Res. Bd., No. 25A561 (U.S. Nov. 10, 2025).
  4. Letter Withdrawing Plaintiff’s Emergency Application for Injunction Pending Appeal, Chamber of Com. of the U.S., v. Ca. Air Res. Bd., No. 25A561 (U.S. Nov 18, 2025). The withdrawal was made without prejudice to renewing the request for relief if necessary.