The Liberty Justice Center is celebrating a significant victory in National Legal and Policy Center v. Securities and Exchange Commission as the SEC has announced it will no longer defend the controversial rules on climate change challenged in the case. This decision marks a major win for free speech and against government overreach, as the Liberty Justice Center and its allies argued that the rules violated the First Amendment and exceeded the SEC’s authority.
In a letter submitted to the U.S. Court of Appeals for the Eighth Circuit, the SEC stated that it has withdrawn its defense of the rules and will not proceed with oral arguments. The letter, signed by SEC counsel, acknowledged that a majority of the current Commissioners opposed the rules and that the Commission has decided to yield its litigation position.
In March 2024, the Liberty Justice Center joined with the Pelican Institute to file a legal challenge on behalf of the National Legal and Policy Center and the Oil and Gas Workers Association challenging the SEC’s rules, which imposed sweeping new disclosure requirements on corporations. The rules were widely criticized for forcing corporations to make disclosures related to climate change that are unrelated to the SEC’s purpose of regulating securities and protecting investors.
The lawsuit argued that the rules violated the First Amendment by forcing companies to speak on this issue and that the rules exceeded the SEC’s authority because they were not authorized by Congress.
In February 2025, the SEC’s Acting Chairman issued a statement acknowledging that a majority of the current Commissioners opposed the rules. This led to the Commission’s decision to withdraw its defense of the rules and effectively concede the case.
“These illegal rules never should have been adopted. They’re about forcing companies to support an ideological agenda, not regulating securities and protecting investors,” said Jacob Huebert, President of the Liberty Justice Center. “The SEC is right to drop its defense of these indefensible rules.”
“The SEC tried to force companies to speak in ways that aligned with the government’s ideological agenda, not their business mission. That’s not just bad policy – it’s unconstitutional,” said Sarah Harbison, General Counsel with Pelican Institute. “We’re proud to have stood up for the First Amendment.”