SAN FRANCISCO, California — The U.S. Court of Appeals for the Ninth Circuit issued its long-awaited written opinion on Monday, November 9, in the business challenge to California's two climate disclosure laws, and the ruling cuts the package in two. Companies' own emissions reporting survives and comes due immediately; the parts of the laws that reach into supply chains and into companies' judgments about climate risk do not, the court said, likely survive the First Amendment.

The case is Chamber of Commerce v. Sanchez, No. 25-5327. It challenges Senate Bill 253, the Climate Corporate Data Accountability Act, and Senate Bill 261, the state's climate-related financial risk law — both adopted in October 2023 as California's Climate Accountability Package and both fought by the U.S. Chamber of Commerce, the California Chamber of Commerce and other business groups ever since.

Source: Foley & Lardner alert (Nov. 9)

What the two laws require, in plain terms

SB 253 requires covered companies to report their greenhouse gas emissions every year in three buckets. Scope 1 is the company's own direct emissions — its furnaces, its fleet, its facilities. Scope 2 is the emissions from the energy it buys — electricity, steam, heating and cooling. Scope 3 is everything else in its value chain: suppliers, contractors, deliveries, business travel and customers' use of its products. Reporting of Scope 1 and 2 was set to begin in November 2026, covering 2025 emissions, with Scope 3 to follow in 2027.

SB 261 is different: it does not ask for numbers but for judgment. Covered companies must prepare a report every two years describing the financial risks climate change poses to them and what they are doing about those risks. It is that demand for a company's own assessment — its opinions, in written form, on a contested subject — that sits at the centre of the First Amendment fight.

The ruling: numbers in, judgments out — for now

On Scope 1 and 2, the court left the law standing. Those disclosures are not enjoined and remain in place, Foley & Lardner's analysis of the opinion states, and the deadline for reporting entities to file them is tomorrow, November 10, 2026. Bloomberg Tax's account of the ruling agrees: the Ninth Circuit allowed the state's emissions reporting to proceed for companies' direct and purchased-energy emissions.

Source: Bloomberg Tax (Nov. 9)

On Scope 3, the court went the other way. It held the supply-chain disclosure provisions “likely unconstitutional” under the First Amendment, reversed the district court's denial of a preliminary injunction for those disclosures, and the district court is now expected to enter that injunction. The district court will also have to decide whether the Scope 3 provisions can be severed from the rest of SB 253 — the statute contains an express severability provision, which is why the Scope 1 and 2 core can continue even if Scope 3 falls.

On SB 261, the court likewise held the disclosure requirements likely unconstitutional and reversed the denial of a preliminary injunction, so SB 261 is also expected to be enjoined. In practice this maintains the status quo: the Ninth Circuit had already enjoined enforcement of SB 261 on November 18, 2025, while it considered the case, so the risk-report law has never actually taken effect.

What the winners said — and what the ruling does not decide

The California Chamber of Commerce, a plaintiff-side business group in the case, welcomed the opinion. “The appeals court has made it clear that both of these laws are clear examples of legislative overreach,” its president and CEO, Jennifer Barrera, said in a statement on Monday. “SB 253 relied, in part, on a failed scheme to assess emissions possibly linked to a company's supply chain, while SB 261 included what the judges described as a mandate for businesses to make ‘subjective ideological assessments’ of their climate related financial risks.” She added: “In both instances, California lawmakers failed to recognize that even when addressing the issue of climate change, the ends don't justify the means.”

Source: CalChamber statement (Nov. 9)

Monday's opinion is a preliminary-injunction ruling, not the final word on either law. It decides what happens while the case continues: Scope 1 and 2 reporting proceeds, Scope 3 and SB 261 wait. The merits fight — whether the provisions are actually unconstitutional, not just likely so — continues in the lower court, and either side can still take the case higher.

Why this reaches Punjabi trucking and California business readers

SB 253 is aimed at very large companies — U.S. entities with more than $1 billion in annual revenue that do business in California, a group that includes the biggest trucking, logistics, food and retail firms operating on Interstate 5, Highway 99 and the port corridors. Those companies' Scope 1 reports are due Tuesday whether or not they are based in California. The fight over Scope 3 was, in large part, a fight about everyone else: supply-chain reporting would have pushed data demands down onto the smaller carriers, owner-operators and suppliers — including Punjabi-owned trucking firms across the Central Valley — that serve the big companies, even though the law never named them directly. That reach is now the part of the law expected to be blocked.

In short: California's climate reporting regime starts for real on Tuesday — but narrower than Sacramento wrote it. The emissions a company makes itself, it must now report; what its whole supply chain emits, and what it thinks about climate risk, a federal appeals court says the state likely cannot make it say.