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In January 2024, the U.S. Chamber of Commerce, California Chamber of Commerce, and allied business groups sued California and CARB, challenging both SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate‑Related Financial Risk Act).
The complaint asserted multiple constitutional claims, including:
- Compelled speech
- Supremacy Clause / federal preemption
- Extraterritorial regulation / Dormant Commerce Clause
- On November 5, 2024, the District Court denied the plaintiffs’ motion for summary judgment on their facial First Amendment challenge, reasoning that factual development was needed to assess which level of scrutiny should apply and whether the laws were appropriately tailored.
- On February 3, 2025, the U.S. District Court for the Central District of California granted a partial motion to dismiss:
- It dismissed the Supremacy Clause and extraterritoriality claims relating to SB 253 (without prejudice), finding them not yet ripe.
- For SB 261, the Court dismissed the Supremacy Clause claim with prejudice and the extraterritoriality claim without prejudice.
- The First Amendment claim was preserved.
- On August 13, 2025, the District Court denied the plaintiffs’ motion for a preliminary injunction seeking to block enforcement of SB 253 and SB 261 while the case proceeds.
- The Court held that the plaintiffs had not demonstrated a likelihood of success on the merits of their First Amendment claims.
- Because of that denial, SB 253 and SB 261 remain in effect while the litigation continues.
- The decision was immediately appealed to the Ninth Circuit. All further District Court proceedings are stayed until resolution of the appeal.
- The case is now focused primarily on the First Amendment claim.
- A hearing on the plaintiffs’ request for an injunction pending appeal in the Ninth Circuit was scheduled for September 15, 2025. The business‑group plaintiffs filed their opening brief in the Ninth Circuit on September 18, 2025. An opposition motion was filed by the State on September 25, 2025.
- On An oral argument date for the Ninth circuit appeal has not been publicly announced.
Meanwhile, CARB has not yet adopted final implementing regulations for SB 253 or SB 261. Because CARB’s regulations are not finalized, many of the substantive obligations and burdens are still uncertain, and the content of those rulemakings may affect future litigation strategy and outcomes. Stakeholders should closely monitor the Ninth Circuit’s handling of the appeal, CARB’s rulemaking, and any further motions to revisit the dismissed constitutional claims (e.g., reviving preemption or extraterritoriality claims once regulations are in place).
