DOJ Sues California Over Landmark Climate Disclosure Laws

DOJ Sues California Over Landmark Climate Disclosure Laws

The Justice Department sued California on September 22, 2026, arguing that two state statutes requiring large companies to disclose greenhouse gas emissions and climate-related financial risks are preempted by federal law.

The complaint, filed in the U.S. District Court for the Central District of California, targets SB 253 and SB 261 — the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act. SB 253 requires companies doing business in California with more than $1 billion in annual revenue to report Scope 1, 2, and 3 emissions, while SB 261 covers entities with over $500 million in revenue and demands biennial climate risk reports. The DOJ argues the laws conflict with the federal Clean Air Act's regulatory scheme and exceed state authority over interstate commerce.

"California has no authority to impose its own national climate regime," the department said in its announcement, contending that the statutes seek to regulate emissions and disclosure practices far beyond the state's borders.

California Attorney General Rob Bonta has defended the laws as valid exercises of the state's police power and consumer protection authority. The case lands amid a broader pushback against state-level climate rules, following the SEC's 2024 adoption of its own scaled-back climate disclosure rule and subsequent litigation over that rule.

What to watch: whether the court grants a preliminary injunction before SB 253's reporting deadlines take effect, and whether other states with similar disclosure mandates — including Washington and Illinois — face copycat challenges. The outcome could reshape how far states can go in regulating corporate climate accountability.

Primary sources: DOJ Office of Public Affairs, California SB 253 text