Impact of Supreme Court Decision in West Virginia v. EPA on SEC Rulemakings

A recent blog post on the Harvard Law School Forum on Corporate Governance entitled, “West Virginia v. EPA Casts a Shadow Over SEC’s Proposed Climate-Related Disclosure Rule” discusses the impact the Supreme Court’s June 30 decision may have on the SEC’s current rule proposals. The article notes that the Supreme Court relied on “the ‘major questions doctrine,’ which provides that in certain ‘extraordinary cases,’ administrative agencies must have ‘clear congressional authorization’ to make decisions of vast ‘economic and political significance.’” Additionally, the Court broadly interpreted the plaintiff’s legal standing to sue an administrative agency which may have an impact on future questions of standing as “petitioners may be deemed to have standing to challenge proposed rules, or those that have been denounced or unenforced.” The authors note that the Court’s decision could interfere with the SEC’s proposed rule on climate-related disclosure, specifically that “the SEC is relying on ambiguous statutory text to claim a significant expansion of power in a subject matter in which it lacks expertise.” While the comment period for the climate-related disclosure rule for issuer has closed, it is too early to tell if the SEC will amend any portion of the rule as proposed.