June 26, 2024

Cassidy, Cramer, Hern File Bicameral Amicus Brief Against SEC’s Climate Disclosure Rule

WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA), Kevin Cramer (R-ND), U.S. Representative Kevin Hern (R-OK-01), and colleagues filed a bicameral amicus brief in Texas Alliance of Energy Producers, et al v. SEC, requesting the Court vacate the agency’s Climate Rule. The amicus brief argues the Climate Rule would greatly increase the burdens placed on publicly traded companies in ways that will ultimately harm investors in those companies. As elected members of Congress, the brief highlights strong institutional interests in protecting Congress’ power to enact legislation governing the nation, including laws addressing securities markets and climate policy.

The Securities and Exchange Commission (SEC) adopted a finalized rule in March requiring publicly traded companies to disclose their greenhouse gas (GHG) emissions data. This is the first time the SEC has published a rule requiring companies to submit climate-related information. Critics contend it is “unlawful several times over.” Multiple lawsuits are pending in the Eighth Circuit, including a petition seeking review of the regulations filed by the Texas Alliance of Energy Producers and the Domestic Energy Producers Alliance. 

“The SEC, as a securities regulator, is not empowered to impose sweeping climate-related regulations on publicly traded companies,” stated the amicus brief. “Congress has demonstrated historical reluctance to pass broad climate legislation, particularly legislation that would dramatically impact federal securities law disclosure requirements. The SEC’s overreach into climate regulation violates the separation of powers and the major questions doctrine, warranting the rule’s invalidation.”

“Further highlighting the absence of authorization for the SEC’s Climate Rule is its conflict with fundamental tenets of federal securities law that have existed for decades,” continued the amicus brief. “Specifically, the Climate Rule contravenes the principle of materiality, a cornerstone of federal securities law. […] The SEC’s historical stance and the Supreme Court’s interpretation affirm that immaterial information should not be subject to mandatory disclosure. By focusing on environmental impacts rather than financial materiality, the Climate Rule deviates from the SEC’s statutory mandate. Consequently, the Climate Rule’s disclosure requirements conflict with established federal securities law precepts and should be vacated.”

Cassidy and Cramer are joined by U.S. Senators John Barrasso (R-WY), Marsha Blackburn (R-TN), Mike Braun (R-IN), Shelley Moore Capito (R-WV), Ted Cruz (R-TX), Steve Daines (R-MT), Cindy Hyde-Smith (R-MS), Cynthia Lummis (R-WY), Pete Ricketts (R-NE), Jim Risch (R-ID), Mike Rounds (R-SD), Marco Rubio (R-FL), Eric Schmitt (R-MO), Tim Scott (R-SC), and Dan Sullivan (R-AK), and U.S. Representatives Rick Allen (R-GA-12), Kelly Armstrong (R-ND-AL), Jodey Arrington (R-TX-19), Beth Van Duyne (R-TX-24), Morgan Griffith (R-VA-09), Harriet Hageman (R-WY-AL), Tom McClintock (R-CA-05), Dan Meuser (R-PA-09), Cory Mills (R-FL-07), Dan Newhouse (R-WA-04), Ralph Norman (R-SC-05), Andy Ogles (R-TN-05), August Pfluger (R-TX-11), John Rose (R-TN-06), Keith Self (R-TX-03), Jason Smith (R-MO-08), and Ann Wagner (R-MO-02) on the amicus brief.