Eighth Circuit Keeps SEC Climate Disclosure Rule on Hold Until Agency Acts

Key Takeaways

• Court Order: The Eighth Circuit extended its hold on petitions challenging the SEC’s climate disclosure rule, leaving the matter in abeyance until the SEC either reconsiders the rule or resumes defending it.
• Shift in Burden: The ruling puts responsibility on the SEC to decide whether to rescind, revise, or continue defending its rules through litigation.
• Regulatory Background: The SEC’s March 2024 climate disclosure rules faced swift backlash from 25 states and industry groups, while 18 states plus the District of Columbia intervened in support.
• Current Status: The rules remain stayed, and the court emphasized that abeyance will not materially prejudice the petitioners.

Deep Dive

The legal fight over the SEC’s climate disclosure rule remains in limbo after the U.S. Court of Appeals for the Eighth Circuit issued an order on September 12 continuing its hold on petitions for review. The court made clear that it is now up to the Securities and Exchange Commission to determine the fate of the rules, either through notice-and-comment rulemaking or by renewing its defense in ongoing litigation (Iowa v. SEC).

“It is the agency’s responsibility to determine whether its Final Rules will be rescinded, repealed, modified, or defended in litigation,” the court wrote in its per curiam order.

The SEC adopted its final climate disclosure rules in March 2024 by a 3-2 vote, requiring public companies to provide extensive information on greenhouse gas emissions, governance, climate-related risks, and financial impacts. The adoption sparked immediate opposition from 25 states, energy companies, and other challengers, who argued the agency exceeded its authority. Their lawsuits were consolidated in the Eighth Circuit.

At the same time, 18 states and the District of Columbia stepped in to support the SEC’s position.

Initially, the SEC defended the rules, but the agency’s stance shifted following the January 2025 change in administration. In July, the SEC notified the court that it did not intend to revisit or reconsider the rules, instead asking the court to move forward and decide the case.

In April, the Eighth Circuit granted a motion to hold the petitions in abeyance while awaiting the SEC’s next steps. With the September 12 order, the court extended that pause, stating that judicial economy favored waiting for the SEC to take definitive action.

The court also stressed that since the rules are already stayed, further delay would not harm petitioners like Liberty Energy, Inc. and Nomad Proppant Services, LLC, who are represented by Jonathan Andrew Berry of Boyden Gray PLLC. The SEC’s counsel in the matter is Megan Barbero.

The ball is now firmly in the SEC’s court. If the agency decides to reopen the rule through notice-and-comment rulemaking, it could lead to revisions addressing the concerns of opponents. Alternatively, if the SEC chooses to renew its defense, the litigation could proceed, with the Eighth Circuit ultimately ruling on the rule’s legality.

For now, the fate of the climate disclosure rule remains uncertain, a reflection of both legal and political fault lines that continue to shape the ESG regulatory landscape.

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