Securities Regulation Daily Wrap Up, ESG NEWS—8th Cir.: Great Plains-Midwestern showdown over climate regulation looming, (Mar 21, 2024)
The Eighth Circuit won the random draw held by the Judicial Panel on Multidistrict Litigation to designate a U.S. Court of Appeal to hear the challenge to the SEC’s climate regulation.
Late today it was announced that the U.S. Court of Appeals for the Eighth Circuit had been randomly drawn by the clerk of the Judicial Panel on Multidistrict Litigation to hear the nine petitions for review seeking to challenge the SEC’s recently adopted climate risk disclosure regulation. The MDL panel issued a brief order formally consolidating the nine petitions and designating the Eighth Circuit as the federal appeals court where the record in the case is to be filed. The federal appeals courts that were in the drawing to hear the climate regulation challenge were the Second, Fifth, Sixth, Eighth, Eleventh, and D.C. Circuits (IN RE: Securities and Exchange Commission, The Enhancement and Standardization of Climate-Related Disclosures for Investors, Issued on March 6, 2024, March 21, 2024).
Going forward, one of the first questions that will be answered is whether the Eighth Circuit will modify, revoke, or extend the stay of the SEC’s regulation that was imposed by the Fifth Circuit before the MDL panel process even formally began. Beyond that, those following the case can expect a fuller set of arguments from the challengers and the SEC.
Thus far, the petitioners’ substantive arguments have focused on the Supreme Court’s major questions doctrine and whether the SEC is seeking to displace EPA regulations that mandate similar GHG emissions disclosures. Also expect the petitioners to argue that the SEC’s regulation ran afoul of the Administrative Procedure Act and that at least portions of the regulation violate the First Amendment. This much has been previewed in the filings made by Liberty Energy and the SEC regarding the stay that was eventually issued by the Fifth Circuit (See, Liberty Energy’s request for stay and SEC’s opposition). The public has yet to see the formal arguments that may be made by the two groups challenging the regulation because it did not go far enough.
The MDL panel becomes involved under 28 U.S.C. §2112 in selecting the federal appeals court to hear a petition for review of an agency order or rule when petitions for review of that rule are filed in multiple federal appeals courts within 10 days of the issuance of the rule. The agency, in this instance the SEC, must then notify the MDL that such a situation exists, and that it will trigger a random drawing by the MDL panel by which it will designate one federal appeals court to hear the consolidated petitions for review.
Specifically, MDL Rule 25.5(a) states: “Upon filing a notice of multicircuit petitions for review, the Clerk of the Panel shall randomly select a circuit court of appeals from a drum containing an entry for each circuit wherein a constituent petition for review is pending. Multiple petitions for review pending in a single circuit shall be allotted only a single entry in the drum.”
The case is No. MCP No. 180.
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