The Major Questions Doctrine Raises Major Questions for the SEC’s Proposed Climate Rule

Securities Enforcement Defense attorneys Scott Mascianica, Jessica Magee and Danny Athenour co-authored an article for The Texas Lawbook discussing the U.S. Supreme Court's opinion in West Virginia v. Environmental Protection Agency and its implications for the U.S. Securities and Exchange Commission's (SEC) proposed rule governing environmental and climate change disclosures. In West Virginia, the Supreme Court struck down the Environmental Protection Agency's (EPA) "Clean Power Plan Rule." The Court, in analyzing the statutory grant under which the EPA claimed authority, concluded that the rule exceeded the EPA's power, as it presented a "major question" of economic and national importance that required a clearer statement from Congress to confer such authority.

But beyond the EPA, the decision has major implications for the SEC, which is actively working on a proposed rule aimed at imposing disclosure requirements on U.S. public companies and foreign private issuers relating to climate change and climate-related risks. This article applies insights from the Supreme Court's decision in West Virginia to the SEC's proposed rule and offers a path forward both for would-be challengers who want to do away with the rule altogether and an SEC that is focused on enacting a rule that can stand the test of time.

READ: The Major Questions Doctrine Raises Major Questions for the SEC’s Proposed Climate Rule (Subscription required)