ExxonMobil has filed suit in federal court challenging two California laws that would require the oil giant to report the greenhouse emissions resulting from the use of its products globally.
The 30-page complaint, filed Friday in the U.S. District Court for the Eastern District of California, argues that the laws violate the company’s free speech rights by requiring it to “trumpet California’s preferred message even though ExxonMobil believes the speech is misleading and misguided.”
senate Bill 253, the 2023 legislation known as the Climate Corporate Data Accountability Act, requires the California Air Resources Board to adopt regulations by this year to mandate public and private companies with more then $1 billion in annual revenue to begin publicly disclosing their emissions across three “scopes.”
Scope 1 emissions are defined as direct greenhouse gas emissions from a company and its branches. Scope 2 includes indirect emissions, such as electricity bought by the company. Scope 3 are emissions from the company’s supply chain, including waste, water usage, business travel and employee commutes, which account for about 75% of a company’s greenhouse emissions for many industries. Reporting begins in 2026 on scopes 1 and 2 and in 2027 on scope 3.
The attorney general’s office and Exxon did not respond to requests for comment Saturday. Tara Gallegos, a spokesperson for Gov. Gavin Newsom, said the laws have been upheld in court “and we continue to have confidence in them.”
“Truly shocking that one of the biggest polluters on the planet would be opposed to clarity,” Gallegos said.
In 2024, the U.S.Chamber of Commerce, California Chamber of Commerce, American Farm Bureau Federation and other groups also sued the state over the same laws. While a judge denied a preliminary injunction from the business groups, the case is proceeding. A trial date is expected in Oct. 2026.
In his 41-page decision, U.S. District Judge Otis Wright II wrote that while the laws do regulate commercial speech,the chamber failed to show they unlawfully restrict 1st Amendment speech.
“Plaintiffs argue they will be irreparably harmed by SBs 253 and 261 because the laws compel speech in violation of the First Amendment,” the George W. Bush appointee w
ExxonMobil Sues California Over Climate Disclosure Laws
Los Angeles, CA – ExxonMobil has filed a lawsuit challenging two California laws requiring increased climate-related disclosures from large corporations, alleging the regulations are unconstitutional and burdensome. The lawsuit, filed in the U.S. District Court for the Central District of California, targets Senate Bills 253 and 261, which were signed into law in September 2023.
The first law, SB 253, mandates that companies with annual revenue exceeding $1 billion disclose their greenhouse gas emissions, including Scope 3 emissions – those generated by a company’s suppliers and customers. Critics argue this is a notably challenging requirement, as calculating Scope 3 emissions can be complex and rely on estimations. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BUS§ionNum=17585
According to ExxonMobil, the law would force the company “to engage in granular conjecture about unknowable future developments and to publicly disseminate that speculation on its website.” The lawsuit names California Attorney general rob Bonta, Air Resources Board chair Lauren Sanchez, executive officer Steven S. Cliff, and two officials in the board’s Industrial Strategies Division as defendants.
Michael Gerrard, a legal expert at Columbia University’s Sabin Center for Climate Change Law, stated the suit is consistent with Exxon’s history of resisting climate change regulations. “These laws do not require Exxon to make any changes in the way it produces, transports, refines or sells oil. They are just about information that Exxon doesn’t wont to provide to the public,” Gerrard explained. He added that if Exxon believes the information requested would be misleading, it has the opportunity to explain its reasoning.https://www.law.columbia.edu/news/press-releases/exxonmobil-sues-california-over-climate-disclosure-laws
The second bill, SB 261, requires corporations with revenue over $500 million to publicly disclose climate-related financial risks and their strategies for reducing and adapting to those risks. This includes detailing potential threats to facilities from rising sea levels or shifts in consumer demand for electric vehicles. The law is expected to impact over 2,600 companies operating in California. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=8190
Supporters of the legislation argue that these disclosure requirements are crucial for transparency and accountability, discouraging corporate “greenwashing” – the practice of misleading the public about a company’s environmental efforts.Senator Scott Wiener (D-San Francisco), the author of SB 253, stated that the laws are necessary to achieve the deep emissions cuts required to mitigate the worst effects of climate change.
This is a developing story and will be updated as more information becomes available.