On Friday, a three judge panel from the U.S. Court of Appeals for the Fifth Circuit granted a motion seeking an administrative stay of the SEC’s new climate disclosure rules filed by two fracking companies. Here are four things to know:

  1. The Fifth Circuit’s order is only one sentence – stating simply that the “motion for an administrative stay is granted” – in which the panel’s reasoning is not disclosed. The stay is temporary – but we don’t know how long it will last.
  2. There are several other federal courts of appeals in which lawsuits against the SEC’s rules have already been filed and more might be coming. According to this Reuters article, these federal lawsuits will be consolidated soon and a venue will be picked via a lottery.
  3. We all knew litigation against the SEC’s climate rulemaking would be filed soon after the rules were adopted. So a temporary stay is not much of a surprise.
  4. Given that other SEC rules have been adopted in the past – and survived (think conflict minerals) – it’s wise to continue to assume the SEC’s rules will survive a legal challenge until we learn otherwise given the breadth of the rulemaking and the resources and time necessary in order to comply with them once the phase-in compliance dates have arrived.
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Photo of Broc Romanek Broc Romanek

As a strategist for the firm’s Corporate & Securities practice, Broc Romanek has a deep understanding of the regulatory and environmental, social, and governance (ESG) marketplace. Prior to joining Perkins Coie, Broc served as editor at TheCorporateCounsel.net, CompensationStandards.com, and DealLawyers.com, where he oversaw…

As a strategist for the firm’s Corporate & Securities practice, Broc Romanek has a deep understanding of the regulatory and environmental, social, and governance (ESG) marketplace. Prior to joining Perkins Coie, Broc served as editor at TheCorporateCounsel.net, CompensationStandards.com, and DealLawyers.com, where he oversaw and managed coverage on issues related to ESG, corporate governance, executive pay, deals, and market trends and analysis.

In addition to his nearly two decades of working as a journalist and publisher, Broc served as assistant general counsel at a Fortune 50 company, worked in the Office of Chief Counsel of the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance, was a counselor to former SEC Commissioner Laura Unger, and worked in private practice. He also is the author, or co-author, of four legal treatises, and has authored several books focused on the legal industry.