Green Building Law Update

Environmental Law and Sustainability for Business

Migratory Bird Treaty Act Does Not Prohibit Incidental Take – Again

By Stuart Kaplow on Posted in Codes and Regulations, Federal

In a sweeping return to a more literal and arguably originalist interpretation of one of the nation’s environmental laws, the U.S. Department of the Interior has once again reversed course on how the Migratory Bird Treaty Act is enforced. In the latest development, incidental take, the unintentional injury or death of migratory birds, is no longer prohibited under federal law.

This change marks the third administration in a row to take a markedly different position on this century old statute. And while the legal pendulum has swung before, the April 11, 2025, restoration of Solicitor’s Opinion M-37050 firmly reestablishes a literal reading of the MBTA, confining its prohibitions solely to intentional acts.

A Brief Legislative and Legal History

Enacted in 1918 to implement a 1916 treaty with Great Britain on behalf of Canada, the MBTA has since become the bedrock of environmental protection law in the United States. Section 703 of the Act is famously broad, making it a strict liability criminal offense to, among other things, “pursue, hunt, take, capture, kill ‘a covered migratory bird’ by any means or in any manner.” The Act now covers 1,093 species and more than 10 billion birds.

For decades, this language was read to prohibit both intentional and unintentional (incidental) killings of migratory birds. Beginning in the 1970s, the U.S. Fish and Wildlife Service began prosecuting even accidental takes, particularly where industrial activity caused bird deaths.

Notably, in 2013, FWS estimated that wind turbines alone accounted for between 140,000 and 500,000 bird deaths annually. This interpretation culminated in several high profile prosecutions, including against Duke Energy, for bird fatalities caused by wind energy operations.

However, such a broad enforcement scope has always posed a vexing policy question: Should a 1918 statute, written before 80 percent of houses had electricity or long before the dawn of wind energy, be stretched to cover every inadvertent avian casualty?

Executive Branch Reinterpretation – Again

Under the Trump administration, Principal Deputy Solicitor Daniel H. Jorjani issued M-37050 in December 2017. That legal opinion concluded that the MBTA’s criminal prohibitions apply only to purposeful actions directed at birds. This interpretation was promptly challenged and ultimately vacated in 2020 by Judge Valerie Caproni in Natural Resources Defense Council v. U.S. Department of the Interior, who memorably wrote, “It is not only a sin to kill a mockingbird, it is also a crime.”

Yet, that decision never received full appellate review. The Biden administration reversed the policy via M-37065, again criminalizing incidental take. But now, with the advent of a second Trump administration and Executive Order 14154, “Unleashing American Energy,” we’ve returned full circle.

On February 3, 2025, Secretary of the Interior Doug Burgum directed the Department to rescind burdensome agency actions, including M-37065. Then, on April 11, 2025, the Acting Solicitor issued a one page legal opinion restoring M-37050 and repealing M-37065, citing lack of proper judicial review and alignment with current executive direction. The opinion is now binding on all Department offices, except, notably, within the jurisdiction of the Southern District of New York, where Judge Caproni’s ruling still casts a long shadow.

Legal and Practical Implications

This latest shift reaffirms a fundamental principle of statutory interpretation: a law must be applied as written, not as adapted to modern concerns, unless Congress so directs. As Solicitor Jorjani’s original opinion reasoned, the MBTA does not, by its plain text, prohibit incidental take.

Moreover, this interpretation aligns with historical intent. In 1918, electricity was a luxury for just 20% of U.S. households, none of it generated by wind turbines, high tension wires, or solar arrays. Congress could not have contemplated applying the MBTA to the indirect, industrial-scale effects of modern infrastructure.

This rollback eliminates a significant compliance burden on energy producers, real estate developers, and landowners who would otherwise face potential criminal liability for bird deaths that occur despite good faith efforts to mitigate harm. And importantly, as a practical matter, it removes the legal underpinnings that had justified state and local government migratory bird restrictions like mandating bird friendly design standards for buildings.

Conclusion

Whether one views the MBTA’s strict protections as a moral imperative or a statutory overreach, the law as it stands, at least for now, does not prohibit incidental take. Unless and until Congress steps in to amend the statute, the scope of the MBTA will be governed by the plain language of its text and the intent of its drafters, not the ecological challenges of the 21st century.

We will, as always, continue to monitor legal developments around the MBTA and incidental take. For those operating in businesses that are potentially impacting migratory birds, now is a prudent time to reevaluate risk exposure under this latest legal interpretation.

For additional insights, see our previous blog posts, including “Revoking the Migratory Bird Treaty Act Incidental Take Rule, Once Again.”
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President Trump’s Bold Step to Rein in State Overreach in Climate Change

By Stuart Kaplow on Posted in Climate Change, Federal, GHG, greenhouse gas

On April 8, 2025, President Donald J. Trump issued a powerful and consequential Executive Order with the innocuous sounding title, “Protecting American Energy from State Overreach.” The impact of that Executive Order will be far broader than the title belies when it targets “burdensome and ideologically motivated ‘climate change’ or energy policies” .. of several states and local governments.

Whether or not you agree, this subject was core to the President’s reelection, as a response to what he describes as “an increasingly fragmented and ideologically driven energy landscape in which several states have taken regulatory liberties far beyond their constitutional or statutory authority, threatening not only the integrity of the federal system but also the future of American energy security.” One does not have to concur to appreciate that, as the President said he would, his Administration is taking action against a growing patchwork of state laws purporting to regulate energy, environment, and climate policy on a national and even international scale.

Executive Orders

As we noted in an earlier blog post, Anatomy of an Executive Order: Stopping the Wind, since George Washington issued the first Executive Order in 1789, more than 1,400 have been recorded. Every president has issued at least one Executive Order except William Henry Harrison, who served as president for 32 days.

Some important and at times controversial matters have been the subject of Executive Orders from Abraham Lincoln’s suspension of habeas corpus during the Civil War to Franklin Roosevelt’s internment of Japanese Americans during World War II and Dwight Eisenhower’s mobilization of troops to integrate the Little Rock, Arkansas high school.

What this Executive Order Does

President Trump signed this Executive Order last Tuesday, aimed at securing America’s energy dominance by removing unlawful and burdensome state and local government impediments to the nation’s energy production, reliability, and security.

• The Order directs the Attorney General to identify and take action against state laws and policies that burden the use of domestic energy resources and that are unconstitutional, preempted by federal law, or otherwise unenforceable.

• The Attorney General will prioritize taking action against laws and policies purporting to address “climate change” policies, or involving “environmental, social, and governance” initiatives, “environmental justice,” carbon or “greenhouse gas” emissions, and funds to collect carbon penalties or carbon taxes.

• The Attorney General will submit a report to the President detailing actions taken and additional recommendations to protect American energy pursuant to the Order in 60 days.

There is little debate that a single national energy policy is threatened when a patchwork of state and local governments seek to regulate energy beyond their constitutional or statutory authorities.

In knee jerk reactions, that have become common to everything the Trump Administration does, some have complained that this Executive Order is unconstitutional and usurps state rights, however such may be an instance of the pot calling the kettle Black when the action item is a report from the Attorney General describing preempted and other unconstitutional acts by state and local governments.

Why this Executive Order Matters

Several states have enacted, or are enacting, what the Administration describes as burdensome and ideologically motivated “climate change” or energy policies that threaten American energy dominance and our economic and national security. Maryland, for example, both enacted a building energy performance standards (BEPS) law seeking to ban the burning of all fossil fuel energy sources (banning natural gas and more) in buildings by 2040 and then enacted its Responding to Emergency Needs to Extreme Weather Act, a climate superfund study to seeking to “make polluters pay.”. New York enacted a “climate change” extortion law that seeks to retroactively impose billions in fines (erroneously labelled “compensatory payments”) on traditional energy producers for their purported past contributions to greenhouse gas emissions not only in New York but also anywhere in the United States and the world. Vermont similarly extorts energy producers for alleged past contributions to greenhouse gas emissions anywhere in the United States or the globe.

Other states have taken different approaches to dictate national energy policy. California, for example, punishes carbon use by adopting impossible caps on the amount of carbon businesses may use, all but forcing businesses to pay large sums to “trade” carbon credits to meet California’s radical requirements. These laws and policies also undermine Federalism by projecting the regulatory preferences of a few states into all states. Americans must be permitted to heat their homes, fuel their cars, and have peace of mind, free from policies that make energy more expensive, less reliable, and inevitably degrade quality of life.

These laws and policies in a minority of blue states try to dictate interstate and international disputes over air, water, and natural resources; unduly discriminate against out of state businesses; contravene the equality of states; retroactively impose arbitrary and excessive fines without legitimate justification; and most are preempted by federal law establishing an energy policy for the nation.

The Broad Scope of Laws at Issue

Critics are heard to say that a U.S. President cannot repeal state laws. But that is not the point.

The Trump administration has already successfully challenged a significant state climate program, New York’s congestion pricing.

A practical application of this Executive Order, widely talked about by legal commentators, will be the Attorney General challenging Maryland’s BEPS laws by entering her appearance supporting the plaintiffs in the pending federal court litigation against Maryland BEPS, promptly winding down Energy Star Portfolio Manager (the tool used to report in BEPS), cutting federal funding to Maryland in environmental matters; not to mention seeking the end of the Regional Greenhouse Gas Initiative (that Maryland and nine other states are members of).

A Constitutional, Legal and Economic Imperative

Whether you are a real estate developer, manufacturer, service provider, consumer, or a person who disagrees with the policies of the Trump Administration, this Executive Order delivers exactly what its title promises.

These state laws and policies are fundamentally irreconcilable with the Administration’s objective to unleash American energy at a time when energy demand is surging from technological advancements, including but not limited to data centers.

This Executive Order is the map and compass the federal government will use to prioritize taking actions against states and local governments purporting to address “climate change” policies, and “greenhouse gas” emissions, and the like. When the Attorney General issues her report before June 7, 2025, we will blog with specific recommendations about how you can best navigate and thrive in this environment.

View the Executive Order as published on the White House website here.

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Join us for the next in our “carbon based life form” webinar series, “New Environmental Laws from the 2025 Maryland Legislative Session” on Tuesday, May 6 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Mandatory GHG Disclosures in Maryland Real Estate Contracts

By Stuart Kaplow on Posted in Codes and Regulations, GHG, greenhouse gas, State

Maryland law now requires specified greenhouse gas emissions disclosures and exchange of performance data in a contract of sale for buildings subject to the state’s Building Energy Performance Standards.

Failure to comply with the regulation can have significant financial and legal consequences.

Maryland has quietly taken a dramatic regulatory leap, promulgating what is one of the most aggressive environmental disclosure requirements in any real estate market in the country, mandating greenhouse gas emissions disclosures in private business transactions for the sale of most large buildings.

BEPS

No doubt there are very large dollar costs for a building owner to comply with Maryland’s BEPS, which requirements include that a covered building be net zero greenhouse gas emissions before January 1, 2040; which is likely material information that a purchaser would need to make a sound investment decision.

A “covered building” subject to the regulation is generally a building 35,0000 square feet or more, subject to a very limited list of exemptions (.. historic buildings, schools, etc.), and including buildings from warehouses and office buildings to multi family rental and condominium buildings, and even houses of worship.

The Regulation

The current regulation in Maryland, which was effective beginning December 23, 2024, is:

.05 Disclosure of Covered Building Benchmarking and Performance Standards Information.
Before a buyer signs a contract for the purchase of a covered building, the building owner selling the covered building shall:
A. Disclose to the prospective buyer that the building is subject to requirements under this subtitle;
B. Transfer the following records to the prospective buyer:
(1) A copy of the complete benchmarking record from the benchmarking tool;
(2) Documentation of data verification;
(3) Documentation of any alternative compliance fee made to the Department; and
(4) Any other records relevant to maintain compliance under this subtitle; and
C. Provide to the prospective buyer the following information:
(1) Baseline performance; and
(2) Interim and final performance standards.

Note, this regulation is different and not the same as the originally proposed version. Those who may have sought to comply with the earlier draft need to use the December 23, 2024, promulgated final version.

This is not a boilerplate real estate addendum or checkbox-style disclosure. Rather, how and where this regulatory disclosure is made within a contract of sale may be a highly negotiated matter; this is unlikely to be the subject of a short form addendum, but rather the subject matter of representations and warranties as well as exhibits transferring data. Consider for a moment a scenario where a tenant provides the landlord owner of a building with data that turns out to be inaccurate, and that is what is disclosed to a prospective purchaser? While beyond the scope of this post, leases in Maryland must now include language for greenhouse gas emission data and related information to be exchanged by tenants and landlords such that building owners can make the required annual government filings, not to mention how costs will be apportioned for making capital improvements to satisfy the 2040 net zero mandate.

These requirements must be fully satisfied prior to contract execution, meaning they should appear not only in exhibits to a sale agreement. This is a significant shift from traditional due diligence practices and elevates environmental performance to a threshold legal concern.

But a key flaw here is that the only Maryland approved benchmarking tool is Energy Star Portfolio Manager, a program of the U.S. EPA that will all but certainly be shut down or sold this year.

Another fault is that an owner of a building must make annual disclosures to the state government reporting on the prior year’s greenhouse gas emissions even if it did not own the building in the prior year (.. like income taxes, with 2024 taxes being reported in a 2025 filing), so a purchaser will now need to obtain that data from a seller in addition to receiving a deed. Annual greenhouse gas emission reporting begins in 2025 for 2024 data!

Enforcement and Legal Exposure

Penalties for noncompliance with this regulation can reach as high as $25,000 a day when enforced by the state government. Such is not perceived by many as a likely risk, but the Maryland Department of the Environment has declined to respond to questions about enforcement.

The larger and greater risk is that a purchaser would learn of the failure to disclose in advance of closing, claiming such to be a material breach of the contract of sale, voiding the contemplated transaction, resulting in the purchaser pursuing a breach of contract claim for money damages, and more ..

Unresolved Questions

Troubling at this juncture is that most real estate industry professionals are not aware of this 2024 regulation. Such is likely because the rule does not exist in a statute, but only in a regulation promulgated by the Maryland Department of the Environment, and it may be the only required Maryland real estate contract disclosure expressed in a regulation; a place few could easily find?

This disclosure requirement, which only exists by regulation and is not authorized by any statute, is suggested by some as exceeding the authority granted to the Maryland Department of the Environment and as such is invalid.

As with most new laws, there is also some uncertainty arising from this new mandate. A common question we have seen is whether or not the sale of individual condominium units is subject to the regulation when in a covered building, given that, in addition to the unit, an undivided common interest in the building is also being conveyed? The Maryland Department of the Environment has declined to respond.

Broader Market Consequences

Beyond provisions mandated by building energy performance standards, matters of greenhouse gas emissions are becoming a fundamental part of real estate transactions in places like Maryland and in other Blue states that still have global warming agendas. In Maryland, prospective buyers and tenants now consider a building’s environmental performance and greenhouse gas emission credentials as essential criteria for their decisions (e.g., a buyer will consider its obligations to make future improvements to comply with greenhouse gas emission reductions mandated by law in out years, for example replacing natural gas equipment with all electric). As a result, representations and warranties are finding their way into real estate sales and lease documents, even when not mandated by law.

Note also, there are other required energy usage and energy efficiency audit disclosures in real estate contracts of sale required in some jurisdictions, including in Montgomery County, Maryland. Those requirements are generally more a consumer protection act related to utility bills, but are closely related to the subject matter discussed here.

The impact of greenhouse gas emission disclosures extends far beyond the real estate sector because the vast majority of U.S. businesses operate in leased space, not to mention that many people live in a multi family building that is a covered building in Maryland. As these new Maryland disclosures shape contracts and agreements across multiple business sectors that occupy space in a covered building, these regulations will impact supply chain decisions, investment choices, and collaboration strategies.

Mandatory greenhouse gas emission disclosures are a response to the new era of environmental consciousness, even at a time when the pendulum is swinging in the other direction. Real estate sector stakeholders are becoming more attuned to the environmental costs of their decisions, and these disclosures can play a pivotal role in promoting aligning business practices with climate goals, but the reality for most real estate purchasers is, this is a matter of significant dollar costs.

Final Thought

Maryland’s mandatory greenhouse gas emission disclosures are a paradigm shift in real estate transactions. Whether the BEPS law stands the test of legal scrutiny is unknown, but for now, this compliance obligation is real, enforceable, and financially consequential.

Whether you are a seller, purchaser, lender, broker, or attorney involved in Maryland real estate, the time to act is now. This is not a disclosure obligation that can be glossed over or added last minute. It is a material regulatory requirement, carrying substantial cost and risk.
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Join us for the next in our “carbon based life form” webinar series, “Mandatory GHG Disclosures in Maryland Real Estate Contracts” this Tuesday, April 8 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

NYC Building Electrification Ruling is Interesting But Not a Game Changer

By Stuart Kaplow on Posted in City, Climate Change, Codes and Regulations

On March 18, 2025, a federal judge in the Southern District of New York handed down a ruling in Association of Contracting Plumbers of the City of New York, Inc. et al. v. City of New York, dismissing a challenge to New York City’s Local Law 154 of 2021. This law, often dubbed the New York City Building Electrification Law, prohibits fossil fuel combustion in most new residential buildings, pushing the city toward an all electric future as part of its carbon neutrality goals. Industry groups and a plumbers’ union argued that the federal Energy Policy and Conservation Act (EPCA) preempted the law, claiming it encroached on federal authority over energy standards. Judge Ronnie Abrams disagreed, upholding the City’s authority and dismissing the case with prejudice. Her honor was likely wrong.

At first glance, this decision might seem like a landmark victory for state and local governments aiming to decarbonize buildings. However, while the ruling is certainly interesting and a win for New York City government, it doesn’t set any sweeping precedent for similar efforts nationwide. Instead, it highlights the specific limits of EPCA’s preemption clause and underscores that climate some focused building laws, like Local Law 154, can coexist with federal law when carefully tailored.

Let’s unpack why this ruling is more of a nuanced clarification than a transformative legal shift, particularly in the context of what sounds like last year’s and now passed bad idea of all electric buildings, in this instance targeting only new construction and not existing buildings.

What Local Law 154 Actually Does

Before diving into the ruling, it’s worth clarifying what Local Law 154 entails. Enacted in December 2021, the law prohibits the combustion of substances emitting 25 kilograms or more of carbon dioxide per million British thermal units in new residential buildings. This effectively bans fossil fuel powered appliances, like gas stoves, furnaces, and water heaters, in new construction, with phased implementation: buildings under seven stories must comply by January 1, 2024, and taller buildings by July 2, 2027. Importantly, the law applies only to new construction, leaving existing buildings untouched. It also includes exceptions for specific uses, such as commercial kitchens and hospitals, ensuring flexibility where electrification might be impractical.

The plaintiffs, representing plumbing and construction trades reliant on fossil fuel systems, argued that this ban “concerns” the “energy use” of EPCA regulated appliances by reducing their energy consumption to zero, thus conflicting with federal authority. The City countered that the law regulates fuel types at the building level, not appliance performance, placing it outside EPCA’s scope.

The Court’s Reasoning: A Narrow Take on EPCA

Judge Abrams’ 16 page opinion is a masterclass in parsing legalese, interpreting EPCA, a 1975 statute designed to set uniform energy conservation standards for appliances like furnaces and ovens. EPCA preempts state and local regulations “concerning the energy efficiency, energy use, or water use” of these “covered products” when federal standards are in place (42 U.S.C. § 6297(c)). The plaintiffs leaned on this clause, pointing to a 2023 Ninth Circuit decision (California Restaurant Association v. City of Berkeley) that struck down Berkeley’s ban on natural gas piping in new buildings, arguing it effectively nullified the “energy use” of gas appliances.

Abrams rejected this broad reading. She defined “energy use” under EPCA as a fixed, pre-market metric, the amount of energy an appliance consumes under standardized test conditions, not its real world operation. Local Law 154, she reasoned, doesn’t touch this metric. It doesn’t dictate how efficient an appliance must be or how much energy it can use as manufactured. Instead, it restricts the type of fuel available to appliances in new buildings, a regulatory choice that operates downstream of EPCA’s focus on appliance design and performance. This distinction was dispositive: the law “does not draw any distinction between products based on their energy efficiency or energy use as manufactured,” but rather “regulates, indirectly, the type of fuel that a covered product may consume in certain settings.”

The key holding here is likely that Local Law 154 is not preempted by EPCA because Local Law 154 neither “concerns” nor “relates to” the “energy use” of covered applianc under EPCA.

The judge also contrasted Local Law 154 with Berkeley’s ordinance. While Berkeley banned gas piping outright, New York City’s law sets an emissions threshold that indirectly discourages fossil fuels without prohibiting infrastructure. This subtlety helped Abrams sidestep the Ninth Circuit’s logic, which tied preemption to end user ability to operate appliances. She further noted that EPCA’s purpose, ensuring uniform national standards to ease manufacturer burdens, isn’t thwarted by Local Law 154, which imposes no new design requirements and aligns with traditional municipal authority over building codes.

It’s a brainy, nuanced take that will keep law professors buzzing.

Why This Isn’t a Broad Precedent

The ruling’s intrigue lies in its surgical dissection of EPCA, but it cannot in any meaningful way reshape the legal landscape for state and local electrification efforts. Here’s why:

1. Case Specific Context: The decision is tethered to Local Law 154’s unique structure, an emissions based restriction on fuel combustion, not a direct appliance or infrastructure ban. Other jurisdictions with different approaches (e.g., Berkeley style gas bans) might still face EPCA challenges, as will BEPS laws across the country that are a different animal altogether. Abrams explicitly disagreed with the Ninth Circuit’s interpretation, setting up a potential circuit split ( and dream of a U.S. Supreme Court ruling some day, but this ruling binds only the Southern District of New York unless affirmed by the Second Circuit on appeal.

2. Limited Scope New Construction Only: Local Law 154 applies solely to new buildings, a small fraction of the housing stock (about 0.2% annually in New York State, per some estimates). This narrow focus reduces its relevance to broader electrification efforts targeting existing buildings, where retrofitting fossil fuel systems poses bigger legal and practical hurdles. EPCA’s preemption might loom larger in challenges to laws mandating appliance replacements in older structures, an issue this case doesn’t address.

3. Municipal Authority Isn’t Novel: The decision reaffirms what many already assumed: states and localities can regulate building codes and fuel use under their traditional powers, as long as they don’t set appliance efficiency standards. Abrams pointed to existing city codes, like bans on kerosene heaters or unvented furnaces, as evidence that such regulations predate and survive EPCA. This isn’t a new legal frontier; it’s a validation of established practice.

4. No Universal Blueprint: While the ruling bolsters confidence in emissions based approaches, it doesn’t guarantee success for all climate focused building codes. Jurisdictions must still craft laws that avoid directly regulating EPCA covered appliances’ “energy use” or “efficiency” as defined. By way of example, Building Energy Performance Standards, including the one in Maryland, will trip over federal preemption, because across the country, BEPS mimic Berkeley’s direct pipeline ban rather than New York’s indirect fuel restriction.

Clarifying EPCA’s Limits

The real value of this ruling lies in its clarification of EPCA’s boundaries. It confirms that the statute’s preemption is narrow, targeting regulations that interfere with appliance performance standards, not broader building level policies. Local Law 154 sidesteps this by focusing on fuel combustion, a choice tied to climate and air quality goals, rather than dictating how appliances function.

That said, the ruling doesn’t resolve many uncertainties. The plaintiffs plan to appeal to the Second Circuit, and the higher court may, and some suggest, likely will adopt a different view. Meanwhile, the Ninth Circuit’s Berkeley decision still chills gas bans in western states, creating a patchwork of legal realities. For now, though, Abrams’ opinion suggests that EPCA isn’t the insurmountable barrier some suggested, especially for new residential construction only mandates like New York’s.

The Bigger Picture

For climate hawks, the ruling is a win. NYC’s electrification push lives to fight another day. But it’s not a golden ticket for every state or city looking to regulate energy.

The ruling is a compelling read and a small victory for local climate policy, but it’s not the Rosetta Stone for decoding EPCA’s role in the electrification revolution. It’s a single data point, not a floodgate. As Blue states and cities keep pushing climate based building regulation, expect more courtroom showdowns to truly map the federal state turf war over climate action. For now, NYC’s new construction ban stands, but the pendulum has already swung away from global warming regulation. The bigger fight is far from over.
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Join us for the next in our “carbon based life form” webinar series, “Mandatory GHG Disclosures in Maryland Real Estate Contracts” on Tuesday, April 8 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Greenpeace Ordered to Pay $667M in Legal Blow to Environmental Activism

By Stuart Kaplow on Posted in Energy, Environmental, Legal Developments

In a landmark decision with profound implications for environmental activism and corporate accountability, a North Dakota jury has rendered a verdict requiring Greenpeace to pay over $660 million in damages to Energy Transfer, the company behind the Dakota Access Pipeline. This outcome stems from Greenpeace’s involvement in the 2016 protests against the pipeline’s construction, which garnered international attention.

This was Greenpeace taking direct action, no different from their first acts to stop nuclear weapon tests in the Aleutian islands in 1971 and the organization’s best known acts to save the whales over subsequent decades.

After this jury verdict, it may be Greenpeace that needs saving.

Background of the Case

The Dakota Access Pipeline, a 1,172 mile conduit designed to transport crude oil from North Dakota to Illinois, became a focal point of contention due to alleged environmental and indigenous rights concerns. The Standing Rock Sioux Tribe, whose reservation lies near the pipeline’s route, argued that the project threatened their primary water source and sacred sites. The ensuing protests attracted thousands, including environmental groups like Greenpeace, leading to a series of confrontations with law enforcement.

Energy Transfer cites the protests as the reason for a five month delay in the pipeline’s completion, forcing it to miss a January 1, 2017, online production date that cost them lost profits and shareholder value.

Energy Transfer’s Legal Action

In response to the bad acts, Energy Transfer initiated legal proceedings, case no. 30-2019-CV-00180 (North Dakota state trial court), against Greenpeace, alleging defamation, disruption, and property damage. The company contended that Greenpeace orchestrated and funded activities, from training protestors to buying the locks used by protestors to chain themselves to equipment, that resulted in significant economic harm and reputational damage. Notably, this was not Energy Transfer’s first legal action against Greenpeace; a prior federal RICO lawsuit seeking $300 million was dismissed, prompting the company to pursue these claims in North Dakota state court.

This state court action arises from Greenpeace’s “unlawful and violent scheme to cause financial harm to Energy Transfer, physical harm to its employees and infrastructure, and to disrupt and prevent Energy Transfer’s construction of the Dakota Access Pipeline” .. and “Defendants’ unlawful acts include violent attacks on Energy Transfer employees and property, soliciting money for and providing funding to support these illegal attacks, inciting protests to disrupt construction, and a vast, malicious publicity campaign against Energy Transfer. All the while, Defendants utilized the anti DAPL platform to raise tens of millions of dollars in donations from the public under the guise of concern over Indigenous peoples’ rights.”

The complaint details Greenpeace’s inappropriate targeting of Energy Transfer’s business relations, including attempts to get the project lenders to withdraw funding, “Greenpeace .. continued to disseminate misrepresentations to the banks throughout 2017. In reliance on these misrepresentations, banks terminated their relationships with Energy Transfer.”

In response to the statement in the trial’s closing argument trial that protestors threw “human feces, water bottles full of urine, burning logs” at law enforcement and security, in addition to pouring sand in gas tanks and slitting tires on police vehicles, Greenpeace’s lawyer appeared to only respond that the organization did not expressly order any act of vandalism.

The Jury’s Verdict

At the close of the three week trial, the nine person jury sitting in Morton County found Greenpeace liable on multiple counts, including trespass to land and chattel, aiding and abetting trespass, conversion, defamation, tortious interference, and civil conspiracy. The damages, totaling approximately $667 million, are apportioned among Greenpeace entities as follows: Greenpeace USA is responsible for nearly $404 million, while Greenpeace Fund Inc. and Greenpeace International are each liable for approximately $131 million.

Greenpeace’s Response and SLAPP Allegations

Greenpeace has announced its intention to appeal the verdict, spinning the lawsuit as a Strategic Lawsuit Against Public Participation (SLAPP). More than 30 states have enacted anti-SLAPP laws prohibiting legal actions intended to censor, intimidate, and silence critics, but North Dakota is not among them. So, Greenpeace will have no defense there.

Sushma Raman, interim executive director of Greenpeace Inc., emphasized the organization’s resolve, stating, “This is the end of a chapter, but not the end of our fight. Energy Transfer knows we don’t have $660 million. They want our silence, not our money.”

Implications for Free Speech and Environmental Advocacy

The verdict has caused some civil liberties advocates to wrongly describe the jury verdict as a potential threat to free speech and the right to protest. Critics argue that such substantial financial penalties could deter non-profit organizations and individuals from engaging in lawful protest activities, thereby undermining democratic principles.

But this is not a First Amendment case; there is no government restricting speech and that is what the First Amendment protects; not private acts. Rather this is a business that was under attack fighting back in the courts against trespass to land and chattel, conversion, defamation, tortious interference, civil conspiracy, and more.

This is not about free speech. There is no constitutional right to trespass, defame and destroy. Read the Energy Transfer’s complaint in the legal proceedings link above to see what harm was actually done.

Conclusion

The jury’s decision in favor of Energy Transfer marks a pivotal moment in the intersection of environmental activism and corporate interests. As Greenpeace prepares to appeal, the case underscores the delicate balance between holding organizations accountable for their actions and peaceful protest (.. it has nothing to do with constitutional rights to free expression). Whether or not the Netherlands based Greenpeace survives in the U.S., the outcome of this legal battle will likely influence future strategies of both advocacy groups and corporations, shaping the landscape of activism in the United States, environmental activism, and more, .. from Tesla to Israel.

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Join us for the next in our “carbon based life form” webinar series, “Mandatory GHG Disclosures in Maryland Real Estate Contracts” on Tuesday, April 8 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

The Most Consequential Day of Environmental Deregulation in American History

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Federal

EPA Administrator, Lee Zeldin, announced last Thursday, “Yesterday was the most consequential day of deregulation in American history. Alongside President Trump, we announced that the Environmental Protection Agency will take 31 actions to advance his day-one executive orders and power the Great American Comeback.”

I am not sure there is much more to say in this blog post.

Okay, the announcement continues, “We are driving a dagger straight into the heart of the climate change religion to drive down cost of living for American families, unleash American energy, bring auto jobs back to the U.S. and more ..”

Likely most important among the actions announced is the reconsideration of the endangerment finding, when in 2009 without any legislation from Congress, the Obama EPA declared greenhouse gases are a pollutant it can regulate under the Clean Air Act, providing justification for federal, state, and local global warming regulation that many believe is far from protecting Americans from anything environmental; and, that is the action the popular media has focused on.

The whole list of actions announced by Lee Zeldin is worthy of your perusal:

UNLEASHING AMERICAN ENERGY
• Reconsideration of regulations on power plants (Clean Power Plan 2.0)
• Reconsideration of regulations throttling the oil and gas industry (OOOO b/c)
• Reconsideration of Mercury and Air Toxics Standards that improperly targeted coal fired power plants (MATS)
• Reconsideration of mandatory Greenhouse Gas Reporting Program that imposed significant costs on the American energy supply (GHG Reporting Program)
• Reconsideration of limitations, guidelines and standards (ELG) for the Steam Electric Power Generating Industry to ensure low cost electricity while protecting water resources (Steam Electric ELG)
• Reconsideration of wastewater regulations for oil and gas development to help unleash American energy (Oil and Gas ELG)
• Reconsideration of Biden Harris Administration Risk Management Program rule that made America’s oil and natural gas refineries and chemical facilities less safe (Risk Management Program Rule)

LOWERING THE COST OF LIVING FOR AMERICAN FAMILIES
• Reconsideration of light-duty, medium duty, and heavy duty vehicle regulations that provided the foundation for the Biden Harris electric vehicle mandate (Car GHG Rules)
• Reconsideration of the 2009 Endangerment Finding and regulations and actions that rely on that Finding (Endangerment Finding)
• Reconsideration of technology transition rule that forces companies to use certain technologies that increased costs on food at grocery stores and semiconductor manufacturing (Technology Transition Rule)
• Reconsideration of Particulate Matter National Ambient Air Quality Standards that shut down opportunities for American manufacturing and small businesses (PM 2.5 NAAQS)
• Reconsideration of multiple National Emission Standards for Hazardous Air Pollutants for American energy and manufacturing sectors (NESHAPs)
• Restructuring the Regional Haze Program that threatened the supply of affordable energy for American families (Regional Haze)
• Overhauling Biden Harris Administration’s “Social Cost of Carbon”
• Redirecting enforcement resources to EPA’s core mission to relieve the economy of unnecessary bureaucratic burdens that drive up costs for American consumers (Enforcement Discretion)
• Terminating Biden’s Environmental Justice and DEI arms of the agency (EJ/DEI)

ADVANCING COOPERATIVE FEDERALISM
• Ending so called “Good Neighbor Plan” which the Biden Harris Administration used to expand federal rules to more states and sectors beyond the program’s traditional focus and led to the rejection of nearly all State Implementation Plans
• Working with states and tribes to resolve massive backlog with State Implementation Plans and Tribal Implementation Plans that the Biden Harris Administration refused to resolve (SIPs/TIPs)
• Reconsideration of exceptional events rulemaking to work with states to prioritize the allowance of prescribed fires within State and Tribal Implementation Plans (Exceptional Events)
• Reconstituting Science Advisory Board and Clean Air Scientific Advisory Committee (SAB/CASAC)
• Prioritizing coal ash program to expedite state permit reviews and update coal ash regulations (CCR Rule)
• Utilizing enforcement discretion to further North Carolina’s recovery from Hurricane Helene

And there is much more that did not make the announced list including the quietly suggested plan to sell Energy Star and whispers about tactics to dismantle the electric vehicle mandates. All of this fits within the public statements from the White House that through a combination of workforce and spending costs the EPA budget will see a more than 65% reduction next year.

Activists have already claimed that these changes signal a retreat from environmental protection. But we are certain, nothing could be further from the truth. The EPA’s core mission of safeguarding human health and the environment remains. What will be gone are the non Congressionally authorized frolics and detours, as the agency gets back to protecting the environment.

As this blog is being written, it has only been 57 days since the Trump administration took office, and beginning with the Executive Orders signed on day one, there has been much change in environmental matters and the pace of pursuing opportunities in that change is only accelerating.

We are environmental attorneys and entrepreneurs, not partisans. We prioritize innovation in environmental change for those who chase being the fastest adapters and quickest disrupters and we will continue to blog about that here.
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Join us for the next in our ‘carbon based life form’ webinar series, “Ask an Environmental Lawyer Anything” this Tuesday, March 18 from 9 – 9:30 am. The webinar is complimentary, but you must register.

States Challenge Validity of New York’s Climate Change Superfund Act

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, GHG

The recent enactment of the Climate Change Superfund Act in New York has set the stage for a significant legal battle over the scope of state authority to impose financial responsibility for purported climate related damages. The outcome of this litigation could have far reaching effects, influencing not only New York but the entire energy sector, worldwide.

The breadth and scope of this matter is clear from the first averment in the lawsuit:

“The State of New York believes it can seize control over the makeup of America’s energy industry. In an unprecedented effort, New York has set out to impose tens of billions of dollars of liability on traditional energy producers disfavored by certain New York politicians. These energy producers needn’t operate in New York before becoming a target. And New York consumers won’t bear the brunt of these crushing new costs once they’re imposed. Rather, New York intends to wring funds from producers and consumers in other States to subsidize certain New-York-based ‘infrastructure’ projects, such as a new sewer system in New York City.”

Signed into law by Governor Kathy Hochul on December 26, 2024, the Act seeks to hold major fossil fuel companies chargeable for their contributions to greenhouse gas emissions, establishing a retroactive and strict liability scheme reminiscent of the federal Comprehensive Environmental Response, Compensation, and Liability Act (the Superfund law). However, the Act’s implementation has been met with immediate legal opposition, with a coalition of state attorneys general and industry groups challenging its constitutionality.

Background of the Climate Change Superfund Act

The Act aims to generate $3 billion annually over 25 years, totaling $75 billion, to fund infrastructure projects related to climate change adaptation and mitigation. Funding would be derived from assessments levied against fossil fuel companies deemed responsible for more than one billion tons of greenhouse gas emissions between 2000 and 2018.

While this case was pending, on February 28, 2025, Governor Hochul signed Senate Bill 824, an amendment expanding the liability period to include emissions through 2024, thereby increasing potential financial exposure for targeted entities.

To appreciate what is at risk, Aramco of Saudi Arabia, alone, could be charged with the largest annual assessment of any company under the Act, $640 million a year, for emitting 31,269 million tons of greenhouse gas emission from 2000 to 2023. It is not conceivable that the Saudi royal family will ever pay those sums to the state of New York.

Legal Challenge: Federal and State Law Claims

On February 6, 2025, opponents of the Act, including 22 state attorneys general and industry representatives, filed suit in the District Court for the Northern District of New York, arguing, “.. unfortunately for New York, the U.S. Constitution has something to say about the State’s retroactive and extraterritorial shakedown.”

Among the claims in the Complaint are that the Act unlawfully burdens out of state (.. and international) entities and violates multiple constitutional provisions:

Federal Constitutional Claims

1. Equal Protection Clause (14th Amendment): The lawsuit contends that the Act disproportionately imposes liability on out of state fossil fuel companies while benefiting New York residents, creating an unconstitutional disparity.

2. Commerce Clause: Plaintiffs argue that the Act discriminates against out of state businesses by targeting fossil fuel producers regardless of their presence in New York, thereby improperly regulating interstate commerce.

3. Preemption by the Clean Air Act: The federal Clean Air Act establishes a comprehensive regulatory framework for air emissions. The lawsuit asserts that the New York law intrudes into this federal domain, violating the Supremacy Clause.

4. Due Process Clause (5th and 14th Amendments): The Act retroactively imposes liability on companies that engaged in lawful activities at the time, without affording sufficient procedural due process protections.

5. Excessive Fines Clause (8th Amendment): Plaintiffs argue that the Act levies through strict liability exorbitant financial penalties against a select group of companies, constituting unconstitutional excessive fines.

New York State Constitutional Claims

1. Takings Clause (Article 1, Section 7): By compelling fossil fuel companies to pay assessments for public infrastructure projects without just compensation, the Act allegedly violates New York’s Takings Clause.

2. Due Process (Article 1, Section 6): The state based claim parallels the federal argument, asserting that the Act allows for arbitrary enforcement without sufficient procedural due process safeguards.

Implications of the Lawsuit

This lawsuit raises critical questions about the balance of state and federal authority in environmental and energy public policy, as well as the extent to which states can impose financial responsibility on specific industries for historic greenhouse gas emissions. The outcome of this litigation could have far reaching effects, influencing not only New York’s climate initiatives but also American national energy policy.

The litigation reflects the broader pushback against progressive states attempting to set national energy policy. Opponents argue that New York is overstepping its authority, effectively dictating climate policy beyond its borders by targeting out of state fossil fuel companies. The challenge to the Act underscores tensions between the few state governments that prioritize aggressive climate action in a society that relies heavily on traditional energy industries. The outcome of this case could determine whether individual states have the power to impose significant financial penalties on corporations for historical emissions or if such authority remains primarily within the federal government’s purview, if at all.

Given that Vermont enacted substantially the same law in May 2024, also currently facing legal challenges, the decisions in these cases may establish significant precedents regarding state level climate liability.

A Highway to Nowhere

Neither the Act nor this litigation take into account that EPA Administrator Lee Zeldin has reportedly in recent days recommended to the White House that his agency should rescind the finding that greenhouse gas emissions endanger human health and the environment. A reversal of the 16 year old endangerment finding would have broad implications for the underpinnings of these disputes and differences that one can hardly fathom.

The Road Ahead

In response to the February 28, 2025, amendment to the Act, another lawsuit was promptly filed in the Southern District of New York by a coalition including the U.S. Chamber of Commerce, the Business Council of New York State, the American Petroleum Institute, and the National Mining Association. This legal battle is likely to continue evolving, with high stakes implications for both national energy public policy and corporate liability.

“The Climate Change Superfund Act is an ugly example of the chaos that can result when States overreach.” We will continue to monitor developments and provide further insights into the legal and policy ramifications of the New York Climate Change Superfund Act.
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Join us for the next in our ‘carbon based life form’ webinar series, “Ask an Environmental Lawyer Anything” on Tuesday, March 18 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

House Votes to Protect the Gas Water Heater in Your House

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Federal

On the day after Christmas, in its last days, the Biden administration published a final rule that was effectively a ban on most fossil fueled residential hot water heaters. Last Thursday, the U.S. House of Representatives passed a resolution nullifying the rule.

House Joint Resolution 20 passed 221-198. No Republicans opposed the disapproval, and 11 Democrats voted for the House action.

Implications for Homeowners

Just days before the vote President Trump issued a statement of administration policy that explained he, “strongly supports passage of H.J. Res. 20, a joint resolution to disapprove the rule submitted by the Department of Energy (DOE) relating to Energy Conservation Program: Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters.” .. “This rule’s impact on the water heater market could set a dangerous precedent for further restrictions on natural gas appliances, making it harder for American homeowners to maintain affordable living standards. The rule promotes more expensive condensing gas water heaters and creates hurdles for remodeling and replacement projects.”

Pendent to the issuance of that statement and consistent with the Presidential Memorandum of January 20, 2025, temporarily postponing all pending rules, DOE announced that it is postponing the effective date of these standards until March 2, 2025.

Broader Legislative and Regulatory Context

The House action is part of the broader Trump administration and Republican Congress efforts to dismantle the “green New Deal” including what are seen as environmental policies overreaching into people’s lives wrongly justified in the name of apocalyptic global warming. In this instance, the federal government was not coming for your gas stove, but it certainly was coming for your non-condensing natural gas powered hot water heater, which comprises approximately 40% of the market.

In a perverse only in Washington DC turnabout, the loudest opponents to this repeal are not Democrats, but manufacturers of ‘electric’ hot water heaters, who are not subject to this rule.

In the name of a climate emergency, the Biden administration issued regulations to force households to implement its agenda: Last year, the executive branch introduced a final rule imposing stricter energy standards for residential clothes washing machines; Finalized a rule, set to go into effect in 2025, to transition to more advanced refrigeration and cooling technologies that don’t use hydrofluorocarbons; Only after facing pushback, issued its final regulations, which will impact 3% of gas stove models, rather than the initially proposed 50%; Doubled efficiency standards for light bulbs, requiring manufacturers to raise the levels for common light bulbs from 45 lumens per watt to more than 120 lumens per watt, such that only LED bulbs will be able to comply with the standards, not compact fluorescent bulbs; and, Amended the energy conservation standards for ceiling fans, putting into effect far stricter energy standards that forced small and medium size manufacturers out of the market.

The Role of the Congressional Review Act

This resolution was introduced under the Congressional Review Act, a tool Congress can use to overturn certain federal agency actions. If a CRA joint resolution of disapproval is approved by both houses of Congress and signed by the President, the rule at issue cannot go into effect or continue in effect.

While over 400 joint resolutions of disapproval for more than 250 rules have been introduced since the CRA’s enactment, the method has only successfully been used to overturn a handful of rules. It was utilized in the 117th Congress to repeal three rules promulgated by the Trump administration, similarly. During the 118th Congress, when over 200 joint resolutions of disapproval were introduced, the most to date during a given Congress, no rules were successfully overturned. Today in the 119th Congress, there are more than 30 CRA joint resolutions already pending and there will be more.

Next Steps

The office of Senator Cruz, who cross filed Senate Joint Resolution 4 for gas fired instantaneous water heaters, announced on Thursday they had gathered the required number of signatures to bring the resolution to the Senate floor, and a vote will likely come within the next two weeks.

If the Senate passes the resolution and it receives presidential assent, and both are expected to happen before the end of March 2025, the rule on gas fired instantaneous water heaters will be nullified, preserving current consumer options and averting drastically increased costs associated with the purported transition to electric models responding to the U.S. public’s number one concern of lower cost of living.

This Congressional development highlights the significant shift in political views on apocalyptic climate change as well as skepticism of Executive branch regulatory efforts.

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EPA Moves to Overturn California’s Motor Vehicle Emission Standards

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations

On February 14, 2025, newly appointed U.S. Environmental Protection Agency Administrator Lee Zeldin announced in the Oval Office, alongside President Donald Trump, that the EPA would transmit to Congress requests to repeal of the Biden Administration’s electric vehicle mandates that granted waivers to California. These waivers enabled California to enforce air emission standards stricter than federal regulations for cars and trucks, effectively requiring new passenger car sales for model year 2026 to be 35% zero emission and eliminating the sale of gasoline vehicles by 2035.

The transmission of the requests to repeal these waivers granted to California marks a significant step in what could be a major nationwide regulatory rollback under the new administration; that is, this will impact the motor vehicles sold in all 50 states.

The Electric Vehicle Mandate

The EPA rules in question granted California waivers to preempt federal laws, encompassing the Advanced Clean Cars II, Advanced Clean Trucks, and Omnibus NOx rules. The totality of these three agency waivers not only targeted passenger vehicles but also commercial trucks, increasing vehicle costs and potentially affecting the broader economy through higher transportation costs.

Critics argue that such policies lead to increased costs for goods transported by truck and an overall higher cost of living for American families. The California standards have unintended consequences including halting the sale of many recreational vehicles including motorhomes.

President Trump campaigned against what he labeled the “electric vehicle mandate,” and the repeal became the subject of one of his administration’s day one executive orders. The transmission of the request to repeal these waivers to Congress is expected to have been only the first step in a broader effort to step back from greenhouse gas emissions regulations nationwide.

The Waiver Process Under the Clean Air Act

The 1970s amendments to the Clean Air Act grant California the ability to seek waivers from federal preemption, allowing the state to impose its own stricter air pollution emissions standards in response to 1970s smog. However, the EPA must approve the waiver request and did so in the final month of the Biden administration despite that smog is no longer a significant issue in California and for that matter, greenhouse gases are not a major contributor to smog formation.

Under Section 177 of the CAA, other states can adopt California’s emission standards if they are identical to those granted a waiver. Currently, 11 states, including Maryland and Washington, D.C., have adopted California’s vehicle emissions rules, accounting for nearly 30% of all cars sold in the United States, but affecting the marketplace nationwide with what critics term the Californication of the U.S. market (for example, without the repeal you will not be able to buy a motorhome in Maryland).

Related but different, the U.S. Department of Transportation has halted new funds to the National Electric Vehicle Infrastructure program and is seeking to claw back money from the states for EV chargers, again a target of Candidate Trump.

Separately but also significantly, Transportation is moving to undo fuel economy rules adopted by the Biden administration.

Congressional Review Act: A Path to Repeal

The Congressional Review Act, enacted in 1996, allows Congress to overturn federal agency rules. Agencies must report rulemaking activities to Congress, which then has a specified deadline to review and potentially nullify them. If a joint resolution of disapproval is introduced, passed by Congress, and signed by the President, the rule is retroactively negated as if it never existed.

One of the key provisions of the CRA is that if a rule is repealed, an agency cannot issue a substantially similar rule in the future unless explicitly authorized by Congress. This provision could prevent future administrations from reinstating California’s stricter emissions standards; such could be dramatic.

Despite its potential power, the CRA has historically been used sparingly, overturning only 20 rules since its enactment. However, given not only the new administration’s priorities but also the pendulum swing in sentiment for greenhouse gas regulation, most agree there is a strong likelihood of the successful challenge to California’s waivers.

No Judicial Review but Supreme Court Involvement

The issue of California’s emissions waivers has already sparked legal battles. The U.S. Supreme Court recently denied the federal government’s request to delay litigation brought by oil and gas companies seeking to overturn the EPA waiver on the Advanced Clean Cars rule, which applies to model years through 2025.

Opponents have already suggested a gray area exists regarding whether this waiver granted under the Clean Air Act constitutes a “rule” (versus a waiver) that can be overturned via the CRA. But significantly and dispositively the CRA bars judicial review of resolutions. Not to mention a Congressional resolution is quicker than administratively reversing the rule.

What Happens Next?

All Biden administration rules published in the Federal Register after August 15, 2024, are eligible for congressional review and potential repeal under the CRA. Given that Congress has 60 working days to act on an agency rule, the deadline extends into early May 2025. There were 49 repeal resolutions pending, 14 of which target EPA rules. And as of last Wednesday, three additional resolutions specifically seek to revoke California’s federal car and truck standards waivers.

When Congress overturns these vehicle emission waivers the impact will be far greater than only motor vehicles sold in the future in California and even in the 11 other states that have coopted these regulations. This move by Congress would mark a significant course correction in U.S. environmental and energy policy and will profoundly impact the nation.

We have already been working with businesses who are the fastest adapters to assist them with innovative solutions to the opportunities presented, not just in California but even in places like Maryland, where at the same time as these announced federal changes, the Governor is this week pursuing legislation to ration electricity for residences and businesses to have enough electricity in the grid for all electric buildings and electric vehicles.

There will likely be much media attention on this subject in the coming days, however, there is little doubt California will not be permitted to pull the nation around by the nose, and the waiver to exceed Congressionally approved national environmental standards will be quashed

SEC Climate Disclosure Rule: A Dramatic Reversal Under Trump

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Federal

After this was posted, on March 27, 2025, the U.S. Securities and Exchange Commission voted to end its defense of the rules requiring disclosure of climate related risks and greenhouse gas emissions. SEC staff sent a letter to the court stating that the Commission withdraws its defense of the rules and that Commission counsel are no longer authorized to advance the arguments in the brief the Commission had filed.

The U.S. Securities and Exchange Commission has taken a major step toward reversing course on The Enhancement and Standardization of Climate-Related Disclosures for Investors rule (the “Greenhouse Gas Rule”) currently pending in the courts.

The Greenhouse Gas Rule adopted by the SEC on March 6, 2024, is currently being challenged in litigation consolidated in the Eighth Circuit, and the Commission previously stayed the effective date pending completion of that litigation.

In a move that was anticipated and maybe only surprising by its timing before a new Trump SEC Chair had been confirmed by the Senate, on February 11, 2025, SEC Acting Chair Mark Uyeda issued a statement saying the Greenhouse Gas Rule “.. is deeply flawed and could inflict significant harm on the capital markets and our economy.” He then “.. directed the Commission staff to notify the Court of the changed circumstances and request that the Court not schedule the case for argument to provide time for the Commission to deliberate and determine the appropriate next steps in these cases.” While this policy reversal was expected of a Trump Administration, it is nonetheless a dramatic change from what had been the signature policy of Gary Gensler in the Biden SEC.

It has been suggested that withdrawing its defense of the Greenhouse Gas Rule will allow the courts to promptly rule in favor of the plaintiffs which will not require the SEC to go through formal rulemaking to rescind the Rule, something that could take two years.

In his statement, the Acting Chair made clear that both he and fellow Republican Commissioner Hester Peirce had voted against the Greenhouse Gas Rule’s adoption. She argued at the time that “only a mandate from Congress should put us in the business of facilitating the disclosure of information not clearly related to financial returns.” And he had argued the Commission was “without statutory authority or expertise” to address climate change issues.

His public statement goes on to describe that “the Commission’s briefs previously submitted in the cases consolidated in the Eighth Circuit do not reflect my views. The briefs defend the Commission’s adoption of the Rule, but I continue to question the statutory authority of the Commission to adopt the Rule, ..” with the recent change in the composition of the Commission, now the majority view. However, that view is not unanimous, and Democratic SEC Commissioner Caroline Crenshaw released a statement criticizing the directive to the staff as unilateral and “without the input of the full Commission.”

But beyond those views, there is no doubt the January 20, 2025, Presidential Executive Order regarding a Regulatory Freeze that will prevail on the conduct of the litigation.

For how this ends, President Trump’s nominee to chair the SEC, Paul S. Atkins has publicly opposed the Greenhouse Gas Rule and you can read his views in his letter jointly penned with other former SEC Commissioners. Lest there be any question about his perspective, the Greenhouse Gas Rule “.. represents an unprecedented and unjustified effort beyond financial materiality and engages the Commission in matters beyond its statutory remit.”

Loath to let the law intrude, we must note that after the Supreme Court ruling in West Virginia v. EPA, many legal scholars agree that the Greenhouse Gas Rule would not withstand “major question doctrine” and would be struck down by the U.S. Supreme Court.

We would be remiss if we did not note that the SEC Longstanding Disclosure Related to Climate Change Remains and we continue to do that work annually for public companies and their counsel.

While climate change disclosure is no longer the cause de célèbres, it should be lost on no organization, including all who do business in California, even if located elsewhere, that there is pending a judicial challenge to the Delay in Corporate Greenhouse Gas Reporting in California that has Implications for All of Us. And despite that in the most burdensome state net zero greenhouse gas reduction law in the country, Citizens and Businesses Join Suing Maryland to Halt BEPS, in the face of longstanding U.S. national energy policy, with additional legislation now pending the Maryland Governor Proposes to Ration Electricity to reduce greenhouse gas emissions.

Even under the Trump Administration businesses must remain vigilant of evolving climate change policies. We will continue reporting changing environmental policy in future blog posts and you may always reach out to Stuart Kaplow.

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