The SEC has stated that a ruling would help it determine the relevance of future rulemaking.
On July 23, 2025 the US Securities and Exchange Commission (SEC or Commission) submitted a status report ordered by the Eighth Circuit in April 2025 on the Commission’s plans with respect to the pending litigation challenging the SEC’s final climate disclosure rules (the Rules).
As a reminder, the SEC approved the Rules — which require companies to disclose certain climate-related information in registration statements and annual reports — during the Biden administration in March 2024. Various parties filed petitions for review across the country. For more information, see this Latham Client Alert.
The litigation was consolidated to the Eighth Circuit in State of Iowa et al. v. U.S. Securities and Exchange Commission et al. Following the change in presidential administrations, the SEC stayed and subsequently ended its defense of the Rules; however, several states remained in the litigation as intervenor-respondents.
The Eighth Circuit then held the litigation in abeyance, pending a status report from the SEC on: (1) whether the SEC intends to review or reconsider the Rules at issue in the case; (2) if taking no action, whether the SEC would adhere to the Rules if petitions for review are denied; and (3) if not, why the SEC will not review or reconsider the Rules at this time.
The SEC’s Response
In response to the Eighth Circuit’s first question, the SEC’s status report indicates that the Commission “does not intend to review or reconsider the Rules at this time.” It asked the Eighth Circuit to terminate the abeyance and resolve the merits of the challenge to the Rules, arguing that the case was not moot and that a live controversy over the validity of the Rules remained. The SEC noted that a majority of the current Commissioners “believes that the Commission lacked statutory authority for the Rules,” but acknowledged that “courts have the final say on statutory interpretation.”
The SEC declined to provide definitive answers to the Eighth Circuit’s second and third questions on how the Commission might respond to a decision upholding the Rules. It explained that “[i]f the Court were to uphold the Rules in whole or in part,” the SEC would then have the opportunity to decide whether to rescind or otherwise reconsider the proposed rules, informed by the Eighth Circuit’s analysis of the SEC’s authority.”
The SEC noted that “[g]iven the previously expressed views of a majority of the current Commissioners,” it is “possible” that the SEC would consider whether to “replace, rescind, or modify the Rules.” But the SEC declined to pre-judge its potential course of action.
Commissioner Crenshaw’s Statement
Commissioner Caroline Crenshaw issued a statement sharply criticizing the status report. She argued that it was “wholly unresponsive” as to the Commission’s likely course of action in the event the Eighth Circuit upheld the challenged Rules. She asserted that “[t]he Commission simply does not want to say what we all know to be true by now — it has no intention of allowing the [Rules] to go into effect.”
Commissioner Crenshaw reiterated her prior criticism of the Commission majority for refusing to defend the Rules. She argued that “the Administrative Procedure Act governs the process by which we make and repeal rules” and “[i]f this Commission wants to rescind, repeal or modify the Rules, which were promulgated by-the-book, then it must do the statutorily required work.”
What Comes Next?
It remains to be seen how the Eighth Circuit will respond to the SEC’s status report. Most likely, the court will terminate the abeyance and proceed with the litigation. The court is likely to resolve the validity of the Rules on the merits, though it may conclude that the Commission’s change of position renders the case moot or otherwise non-justiciable.
Alternatively, the court could seek further clarification of the Commission’s position. In the meantime, the Rules remain stayed by the Commission.
Latham & Watkins will continue to monitor and report on developments in this litigation.
