SEC’s decision to withdraw defense leads to victory for free speech.

The Liberty Justice Center recently achieved a significant victory in the case of National Legal and Policy Center v. Securities and Exchange Commission, as the SEC made the decision to no longer support the contentious rules regarding climate change that were being challenged. This development is a momentous win for free speech and a blow against government overreach. The Liberty Justice Center, along with its partners, contended that the rules were in violation of the First Amendment and went beyond the SEC’s jurisdiction.

In a communication submitted to the U.S. Court of Appeals for the Eighth Circuit, the SEC declared that it was retracting its support for the rules and would not be proceeding with oral arguments. The letter was signed by SEC counsel and acknowledged that a majority of the current Commissioners were against the rules, leading to the Commission deciding to abandon its position in the litigation.

Back in March 2024, the Liberty Justice Center and the Pelican Institute teamed up to challenge the SEC’s rules on behalf of the National Legal and Policy Center and the Oil and Gas Workers Association. These rules imposed extensive new disclosure mandates on corporations, drawing criticism for requiring companies to disclose information on climate change that was deemed to be irrelevant to the SEC’s core responsibilities of overseeing securities and safeguarding investors.

The lawsuit contended that the rules were in contravention of the First Amendment by compelling companies to speak out on the issue and that the rules went beyond the SEC’s authority, as they were not established by Congress.

In February 2025, the Acting Chairman of the SEC released a statement recognizing that a majority of the current Commissioners were against the rules. Consequently, the Commission opted to retract its defense of the rules, effectively conceding the case.

Jacob Huebert, President of the Liberty Justice Center, expressed, “These illegitimate rules should never have been put into effect. They are designed to coerce companies to promote a specific ideological agenda, rather than fulfill the SEC’s mandate of regulating securities and safeguarding investors. The SEC made the right choice in withdrawing its support for these baseless rules.”

Sarah Harbison, General Counsel with Pelican Institute, remarked, “The SEC attempted to mandate that companies take specific stances that aligned with the government’s ideological leanings, rather than their business objectives. This is not just poor policy – it’s unconstitutional. We take pride in having defended the First Amendment in this case.”