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The U.S. Court of Appeals for the Ninth Circuit has issued an order temporarily enjoining enforcement of California's Senate Bill 261. SB 261 requires companies with annual gross revenues over $500 million to disclose climate-related financial risks and mitigation strategies. The injunction, granted on November 18, delays the law's January 1, 2026, compliance deadline while the court considers the merits of the case, with oral arguments scheduled for January 9, 2026.
The court declined to enjoin Senate Bill 253, which mandates greenhouse gas emissions reporting for companies with annual gross revenues above $1 billion. Both laws were enacted in 2023 as part of California's climate accountability package.
The bid to enjoin enforcement of SB 261 and SB 253 was led by the U.S. Chamber of Commerce and other industry groups, who argued that the bills' disclosure requirements violate First Amendment rights by compelling speech on a "highly contested" issue. Following the Ninth Circuit's order, the industry groups informed the U.S. Supreme Court that they were withdrawing their November 10 emergency application for the Court to block both SB 261 and SB 253, or to treat the application as a petition for a writ of certiorari before judgment.
While the injunction affects the immediate timeline for SB 261 compliance, legal experts advise organizations to continue preparations to avoid compressed compliance schedules following the January hearings. The California Attorney General's Office emphasized that the decision is "preliminary and of limited duration," expressing confidence in prevailing on the merits. Shook continues to monitor developments closely and recommends businesses maintain readiness for SB 261 compliance despite the temporary pause.
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