NLPC and Oil & Gas Workers Association v. Securities and Exchange Commission

The Story

Imagine working in an industry that powers the nation, where every day, your efforts contribute to lighting up homes, running factories, and keeping cars on the road. But instead of receiving appreciation, this industry is under attack from Washington bureaucrats who just want it to look bad – and are using the securities law to try to do so. This is the world of former roughneck Matt Coday and the members of the Oil and Gas Workers Association (OGWA) that he leads, a community deeply rooted in the energy sector, providing essential services that drive the American economy.

In March 2024, the U.S. Securities and Exchange Commission (SEC) issued a new rule requiring all companies registered with the SEC to report extensively on climate-related activities. This includes detailing their greenhouse gas emissions, the effects of severe weather events, and their overall impact on the climate. At first glance, these requirements might seem like a step towards transparency. However, for the OGWA and the industries they represent, this rule represents a significant overstep by the SEC into territories better left to elected officials and, by extension, the American public.

The rule, unprecedented in its breadth, mandates disclosures that stretch far beyond traditional financial reporting, imposing speculative and qualitative environmental information into the mix. For Coday and his colleagues, this is not just an administrative headache; it’s a threat to the livelihoods of the hundreds of thousands of workers in the oil and gas sector. The implications are far-reaching, potentially altering how companies are perceived and invested in, based on a framework that the SEC has never before enforced and one that Congress has never authorized them to regulate.

OGWA, joined by the National Legal and Policy Center, and represented by the Pelican Institute and the Liberty Justice Center, has taken a bold stand by filing a lawsuit against the SEC. The legal challenge is clear: the SEC’s rule oversteps its authority, diving headfirst into climate regulation without explicit Congressional consent. This not only violates the principle that significant policy decisions should have clear legislative backing, but it also imposes an arbitrary and capricious burden on industries at the forefront of American energy production.

Moreover, the lawsuit contends that the rule forces companies to engage in compelled speech that don’t reflect their views, infringing upon First Amendment rights. It’s a rule that seems to favor an ideological agenda over the financial interests of investors and the operational realities of companies.

This case is more than a legal dispute; it’s about defending the backbone of America’s energy sector against regulatory overreach. By challenging the SEC’s climate disclosure rule, Coday and the OGWA are not just fighting for the oil and gas industry. They’re advocating for a broader principle: that significant policy change should be the result of democratic processes, not unilateral regulatory decisions. As this legal battle unfolds, it stands as a testament to the resolve of American workers and industries to safeguard their future and ensure that regulatory mandates do not stifle the nation’s energy independence and economic vitality.