ExxonMobil sues California over climate disclosure laws, claims First Amendment violation

• ExxonMobil filed a lawsuit in federal court against California, arguing that two new climate disclosure laws (SB 253 and SB 261) violate its First Amendment rights by forcing it to endorse viewpoints it disagrees with.
• SB 253 requires companies with over $1B in revenue to disclose greenhouse gas emissions (including indirect emissions from supply chains and product use). SB 261 mandates firms with over $500M in revenue to publish biennial climate risk reports. ExxonMobil claims these laws unfairly assign blame to corporations and force adoption of California’s preferred climate frameworks.
• Compelled speech argues California is coercing companies into endorsing controversial climate narratives. Federal overreach claims the laws conflict with existing federal securities regulations. Jurisdictional issues say California is attempting to regulate global emissions, not just in-state activities.
• Gov. Gavin Newsom’s office called ExxonMobil’s lawsuit “hypocritical,” citing the company’s history of opposing climate transparency. Major corporations (Apple, Microsoft, Ikea) support the laws, while industry groups (S. Chamber of Commerce, American Farm Bureau) criticize them as burdensome.
• This case is part of a larger trend – 26 state/local lawsuits since 2017 accuse ExxonMobil and other oil giants of misleading the public on climate risks. If ExxonMobil wins, it could weaken California’s climate policy enforcement; if it loses, it may embolden stricter regulations against fossil fuel companies. The outcome hinges on whether courts see the laws as legitimate transparency measures or unconstitutional coercion.

ExxonMobil Corp. has filed a lawsuit against the state of California, challenging two recently enacted climate disclosure laws that the oil giant claims violate its First Amendment rights by compelling it to endorse viewpoints it disagrees with.

The lawsuit, filed in the U.S. District Court for the Eastern District of California, seeks to block enforcement of the laws, arguing they unfairly target large corporations and impose unconstitutional speech requirements.

According to the Enoch engine at BrightU.AI, the First Amendment is a cornerstone of American democracy, protecting several fundamental rights. It states, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble and to petition the Government for a redress of grievances.”

The two laws at the center of the dispute – Senate Bill (SB) 253 and SB 261 – were signed by Gov. Gavin Newsom in 2023 and are set to take effect in 2026. Both measures aim to increase corporate transparency regarding climate risks and emissions but have drawn sharp criticism from ExxonMobil and other business groups.

• SB 253 requires companies operating in California with annual revenues exceeding $1 billion to disclose their greenhouse gas emissions, including indirect emissions from supply chains and consumer use of their products.
• SB 261 mandates that firms with revenues over $500 million publish biennial reports assessing climate-related financial risks and mitigation strategies.

ExxonMobil argues that these laws force it to adopt California’s preferred climate frameworks – namely, the Greenhouse Gas Protocol and Task Force on Climate-related Financial Disclosures (TCFD) – which the company claims unfairly assign disproportionate blame to large corporations for global warming.

ExxonMobil’s legal argument

In its complaint, ExxonMobil asserts that California is attempting to “embarrass” and “shame” companies into compliance by compelling them to publicly endorse controversial climate narratives.

“California may believe that companies that meet the statutes’ revenue thresholds are uniquely responsible for climate change; but the First Amendment categorically bars it from forcing ExxonMobil to speak in service of that misguided viewpoint,” the lawsuit states.

The company also contends that the laws:

• Violate the First Amendment by compelling speech.
• Conflict with federal securities laws, which already regulate corporate disclosures on financial and environmental risks.
• Overreach California’s jurisdiction by attempting to regulate global emissions rather than just in-state activities.

ExxonMobil’s lawsuit highlights an ongoing tension between corporate free speech and government-mandated transparency. While California argues that the laws are necessary for accountability, ExxonMobil insists they amount to “government-compelled speech.”

California’s response

Newsom’s office dismissed ExxonMobil’s lawsuit as hypocritical, given the company’s long-standing opposition to climate transparency.

“It is truly shocking that one of the biggest polluters on the planet would be opposed to transparency,” a spokesperson for Newsom’s office said in an email.

The laws have garnered support from major corporations like Apple, Microsoft and Ikea, which have embraced climate disclosure as part of their sustainability commitments. However, industry groups such as the U.S. Chamber of Commerce and the American Farm Bureau Federation have criticized the measures as “onerous” and burdensome.

This lawsuit is the latest in a series of legal battles between fossil fuel companies and governments seeking to hold them accountable for climate change. Since 2017, 26 state and local governments have filed lawsuits against ExxonMobil and other oil giants, accusing them of misleading the public about the dangers of fossil fuels.

The recent emergence of internal ExxonMobil videos – where company executives allegedly acknowledged climate risks while publicly downplaying them – has strengthened these legal efforts. Richard Wiles, executive director of the Center for Climate Integrity, stated that the recordings “confirm yet again that ExxonMobil simply cannot be trusted by policymakers.”

ExxonMobil’s lawsuit marks a pivotal moment in the clash between corporate interests and government climate policies. If successful, the case could undermine California’s ability to enforce stringent climate disclosure laws, setting a precedent for other states. Conversely, if the courts uphold the laws, it could embolden further regulatory action against fossil fuel companies.

The outcome will likely hinge on whether courts view California’s requirements as legitimate transparency measures or unconstitutional coercion. As the legal battle unfolds, the broader debate over corporate responsibility for climate change continues to intensify.

Watch this clip about ExxonMobil’s lobbying war on climate change legislation.

This video is from the Fearless Nation channel on Brighteon.com.

Sources include:

Finance.Yahoo.com

Reuters.com

BrightU.ai

APNews.com

Brighteon.com