CalChamber Joins Legal Challenge to SB 253 and SB 261; New Laws Unconstitutionally Compel Speech and Violate Commerce Clause

Today, the California Chamber of Commerce announced that it has joined the U.S. Chamber of Commerce and other allied groups in bringing a lawsuit that challenges California’s new climate reporting laws—SB 253 (Wiener; D-San Francisco) and SB 261 (Stern; D-Canoga Park).

Filed today in U.S. District Court for the Central District of California, Western Division, the lawsuit asserts that both SB 253 and SB 261 unconstitutionally compel speech in violation of the First Amendment and conflict with existing federal law and the Constitution’s delegation to Congress of the power to regulate interstate commerce. CalChamber is representing its member companies in the action, many of whom are subject to the new laws.

In addition to the U.S. Chamber and CalChamber, plaintiffs include American Farm Bureau Federation, Los Angeles County Business Federation, Central Valley Business Federation and Western Growers Association.

“We support cost-effective policies that reduce greenhouse-gas emissions as quickly as possible in order to address climate change,” said CalChamber President and CEO Jennifer Barrera. “However, these new climate reporting laws are far from cost-effective and they will not have any notable impact on climate change. Compelling businesses to report inconsistent and inaccurate information unnecessarily places them at risk for enormous penalties. This will be particularly costly for small businesses who do not have the resources to accurately measure their climate emissions.”

“Throughout the legislative process, the proponents of these policies failed to offer a reasonable explanation of how SB 253 and SB 261 will benefit anyone or how any degree of accuracy was to be reached,” Barrera said. “Both policies violate the First Amendment because they compel companies to make public statements that are likely inaccurate or with which they disagree, due to the incredible challenge of accurately reporting or obtaining reliable information regarding the emissions of their entire supply chain.”

“On top of violating free speech, both SB 253 and SB 261 are precluded by the Clean Air Act and the Commerce Clause because they operate as de facto regulations of greenhouse-gas emissions nationwide,” said Barrera. “The new laws apply to any company with a certain revenue threshold that does any business in California, even a de minimis amount. This will impact companies throughout the country, including those that are primarily based and operate outside the state. In fact, a major stated goal of passing the legislation was to regulate behavior globally, which the complaint directly highlights as a violation of ‘what cannot be done directly cannot be done indirectly.’”

The lawsuit seeks invalidation of both laws and reimbursement for attorneys’ fees related to bringing the action.

To read the complaint, click here.

About CalChamber
The California Chamber of Commerce (CalChamber) is the largest broad-based business advocate to government in California. Membership represents one-quarter of the private sector jobs in California and includes firms of all sizes and companies from every industry within the state. Leveraging our front-line knowledge of laws and regulations, we provide products and services to help businesses comply with both federal and state law. CalChamber, a not-for-profit organization with roots dating to 1890, promotes international trade and investment in order to stimulate California’s economy and create jobs. Please visit our website at