Oil company Exxon Mobil sued the state of California on Friday over its new green energy laws that the company says violate the First Amendment.
The lawsuit targets Lauren Sanchez, the chair of the California Air Resources Board; Steven Cliff, executive officer of the California Air Resources Board; Matthew Botill, division chief of the industrial strategies division of the California Air Resources Board; Sydney Vergis, assistant division chief of the industrial strategies division of the California Air Resources Board; and California Attorney General Rob Bonta.
The 30-page lawsuit filed in the Eastern District of California says that two bills signed into law by California Gov. Gavin Newsom - Senate Bill 253 and SB 261 violate the First Amendment.
Starting on Jan. 1, 2026, SB 261 will require "any company with annual revenues exceeding $500 million that does any business in California to 'make available to the public, on its own internet website,' a 'climate-related financial risk report' detailing both its 'climate-related financial risk, in accordance with the recommended framework and disclosure contained in the Final Report of Recommendations of the published by the Taks Force on Climate-related Financial Disclosures,' and its "measures adopted to reduce and adapt to [that] climate-related financial risk."
The laws force Exxon Mobil to adopt the speech of the state of California, the lawsuit says.
"The statutes compel ExxonMobil to trumpet California's preferred message even though ExxonMobil believes the speech is misleading and misguided," the lawsuit said. "But the Constitution does not permit a State to use speech mandates to turn private parties into "instrument[s] for fostering public adherence to an ideological point of view [they] fin[d] unacceptable."
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The state of California has argued that these laws will protect Californian investors and consumers, provide reliable information, and will potentially encourage companies doing business in California to reduce emissions.
The lawsuit claims that the two laws violate the First Amendment.
"But under any level of scrutiny, no legitimate State interest justifies these speech mandates. The legislative history for SB 253 pays lip service to information California consumers, Senate Judiciary Committee, SB 253, but the statute's reporting regime requires ExxonMobil to estimate and "recalculate" historical emissions under the GHG Protocal for any business activity, anywhere on the planet - including lithium production in Arkansas, jet-fuel production in Louisiana, and ceusw oil production in Guyana - regardless of whether an ounce of those products makes its wway to California consumers."
The law would require 10,000 companies with an annual revenue over $500 million to report on its worldwide climate risk, the lawsuit said.
Exxon Mobil is suing California over state laws the company says violate its First Amendment rights by forcing it "to serve as a mouthpiece" for ideas it disagrees with, including that large companies are uniquely responsible for climate change. https://t.co/Ep1kA52VyO pic.twitter.com/Vuy12Jlcl8
— Law360 (@Law360) October 28, 2025
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