On Wednesday, the U.S. District Court for the Central District of California denied a motion for preliminary injunction seeking to halt enforcement of California’s SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Act) on First Amendment grounds. As this Fenwick alert notes:

With respect to SB 253, the district court found that plaintiffs did not show a likelihood of success on the merits based on California’s dual interests in providing investors with reliable information on which to make investment decisions and in reducing emissions (while acknowledging that California’s interest in providing reliable information to investors may not be justified to the extent the law compels disclosure form companies that have no California investors).

With respect to SB 261, the district court found that California made a sufficient showing as to benefits of investors’ desire for the specific disclosures required by SB 261 to achieve the legislature’s objective in reliable information that enables investors to make informed judgments about the impact of climate-related risks on their economic choices.

The district court also found that the plaintiffs had not shown irreparable harm (due to their failure to show how the climate laws violate the First Amendment) and that “the balance of equities favors denial of plaintiffs’ motion,” primarily because “enjoining SB 253 and 261 would delay the State from advancing the public interests for which it adopted the laws.”

So, for now, the litigation will continue as the deadlines for reporting under the climate laws draw closer.

SB 261 contemplates reporting as of January 1, 2026, while the California Air Resources Board (CARB) is still working on regulations that will establish when 2026 reports are due under SB 253.

– Dave Lynn