Yesterday, the U.S. Court of Appeals for the Ninth Circuit issued a one-page order granting an injunction pending appeal sought by a coalition led by the U.S. Chamber of Commerce, temporarily halting the enforcement of California Senate Bill 261.[1] SB 261 would have required thousands of companies to publicly disclose their first climate-related financial risk reports by January 1, 2026. In the same order, the Ninth Circuit denied the coalition’s request to enjoin California’s Senate Bill 253 pending appeal.[2]
The order means that SB 261’s statutory initial reporting deadline of January 1, 2026 will no longer be enforceable, and the reporting requirements under SB 261 will not begin, while the Ninth Circuit considers the coalition’s appeal of the district court’s decision to deny the coalition’s motion for preliminary injunction against SB 253 and SB 261. It remains to be seen when the reporting requirements would begin if the Ninth Circuit upholds the district court’s decision, which would result in the reinstatement of the reporting obligations under SB 261. Oral arguments on the merits of the appeal are currently scheduled for January 9, 2026.
In contrast, the order does not affect companies’ obligations to report under SB 253. No reporting deadlines have yet been established under SB 253 pending implementing regulations to be issued by the California Air Resources Board (“CARB”). CARB announced in a public workshop held yesterday that it is planning to set August 10, 2026 as the initial reporting deadline for Scope 1 and 2 GHG emissions reporting under SB 253.[3]
This injunction is the latest development in the coalition’s ongoing lawsuit challenging SB 261 and SB 253 on the grounds that the legislation violates the United States Constitution’s First Amendment, Supremacy Clause, and limitations on extraterritorial regulation.[4] In November 2024, the district court concluded that it could not resolve the coalition’s First Amendment challenge on summary judgment and set the case for discovery on the First Amendment claim. In February 2025, the district court dismissed the coalition’s Supremacy Clause and extraterritoriality claims.[5] Citing the length of the discovery and litigation process relating to the First Amendment claim and the burden on companies to prepare reports by the upcoming initial reporting deadlines under SB 261 and SB 253, the coalition sought to preliminarily enjoin CARB and the California state attorney general from implementing, applying or enforcing these laws while the lawsuit is pending.
In August 2025, the district court denied the coalition’s preliminary injunction motion, and the coalition appealed the district court’s ruling to the Ninth Circuit. On November 10, 2025, the coalition also filed an emergency application with the U.S. Supreme Court for an injunction of both SB 261 and SB 253 pending appeal to the Ninth Circuit. Following the Ninth Circuit’s order yesterday, the coalition withdrew the application to the Supreme Court even though the Ninth Circuit did not enjoin SB 253 pending appeal.
For companies navigating potential climate reporting obligations in California, it will be important to closely monitor litigation developments regarding SB 261 and SB 253 in the coming months.[6] In addition, it remains to be seen how this order and subsequent litigation developments will affect CARB’s ongoing efforts to develop regulations and guidance implementing SB 261 and SB 253.
[1] Senate Bill 261 (2023) (as amended, “SB 261”) requires U.S. companies (other than insurance companies) with total annual revenues in excess of $500 million that do business in California to publicly disclose their climate-related financial risks by January 1, 2026 and biennially thereafter.
[2] Senate Bill 253 (2023) (as amended, “SB 253”) requires U.S. companies with total annual revenues in excess of $1 billion that do business in California to annually disclose Scope 1 and 2 greenhouse gas (“GHG”) emissions beginning in 2026 and Scope 3 GHG emissions beginning in 2027.
[3] We will provide additional information on the public workshop in a forthcoming publication.
[4] U.S. Chamber of Commerce et al. v. CARB et al., Case No. 2:24-cv-00801 (C.D. Cal.).
[5] The district court dismissed the Supremacy Clause and extraterritoriality challenges to SB 261 with prejudice and the Supremacy Clause and extraterritoriality challenges to SB 253 without prejudice.
[6] In addition to the lawsuit led by the U.S. Chamber of Commerce, Exxon filed a lawsuit seeking to enjoin CARB and the California state attorney general from implementing, applying, or enforcing SB 253 and SB 261 against Exxon, including on the basis that the laws violate the First Amendment as applied to Exxon. Exxon Mobil Corporation v. Sanchez, et al., Case 2:25-at-01462 (E.D. Cal.).