It should junk its proposed disclosure rule, which is clearly unconstitutional as per West Virginia v. EPA.
The Supreme Court’s June decision in West Virginia v. Environmental Protection Agency was a shot across the bow of the administrative state. The decision implicates many executive and independent agencies’ rulemakings, but perhaps none more so than the Securities and Exchange Commission’s proposed climate-disclosure rule. The proposal would convert the federal securities regulator into a greenhouse-gas enforcer looking over the shoulders of exchange-listed companies’ directors. Much like the EPA regulation the justices struck down, the new SEC proposal would exceed the authority Congress granted to the agency. If the SEC were wise, it would rethink its rule, lest it face a similar fate in court and see its rulemaking effort thrown into the regulatory waste bin.
Writing for a 6-3 majority in West Virginia, Chief Justice John Roberts invalidated the EPA’s Clean Power Plan under the “major questions” doctrine, which limits an agency’s power to act on issues of “economic and political significance” without clear authorization from Congress.
James R. Copland is a senior fellow and director of legal policy at the Manhattan Institute. He is the author of “The Unelected: How an Unaccountable Elite is Governing America.” Follow him on Twitter here.
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