Issue - July 21, 2026

Good morning. It’s Tuesday, July 21, and this week’s ESG Litigation Weekly covers a conservation-group lawsuit challenging the repeal of the U.S. Endangered Species Act “harm” definitions, a preliminary injunction temporarily blocking California’s recyclability-labeling law, the European Commission’s proposed EU ETS revisions and new plan to accelerate electrification, and more.

Conservation Groups Challenge Repeal of ESA “Harm” Definitions
Nine conservation groups sued the U.S. Fish and Wildlife Service and National Marine Fisheries Service in federal court in Seattle, challenging their rescission of regulatory definitions that treated significant habitat modification or degradation that kills or injures protected wildlife as “harm” under the Endangered Species Act (ESA). The complaint alleges that the rescission conflicts with the ESA, a 1995 Supreme Court decision, and the Administrative Procedure Act. It also alleges that the agencies failed to conduct required environmental review. The plaintiffs seek to vacate the rule, reinstate the prior definitions, and prevent the agencies from implementing the rescission.
🔗 Read more → Earthjustice (Press Release, Court Filing)

Court Temporarily Blocks California Recyclability-Labeling Law
A federal district judge in California granted industry groups a preliminary injunction blocking enforcement of SB 343, which restricts recyclability claims and symbols on products and packaging. The court found that the plaintiffs were likely to succeed on claims that several statutory provisions are unconstitutionally vague and that the law’s broader restrictions on commercial speech violate the First Amendment. It also found insufficient evidence that the restrictions would materially improve recycling rates or reduce consumer confusion. The ruling prevents California Attorney General Rob Bonta and those acting with him from enforcing SB 343 while the litigation continues.
🔗 Read more → Court Order via CourtListener, CalRecycle (SB 343: Accurate Recycling Labels)

Judge Denies Immediate Relief in Meta AI Layoff Case
A federal judge denied a temporary restraining order sought by 26 current and former Meta employees who allege that AI-assisted systems contributed to their selection for a May workforce reduction and disproportionately affected workers who took protected leave or sought disability accommodations. The court found serious questions on the merits but held that the plaintiffs had not shown a likelihood of success on the current record. It generally found the alleged employment harms compensable, but indicated immigration conditions facing four visa-dependent plaintiffs likely constitute irreparable harm and may warrant relief. The judge ordered Meta to explain its selection process by July 23 and set an August 24 preliminary-injunction hearing. Meta says human business leaders, not AI, made the decisions using neutral criteria.
🔗 Read more → Court Order via Justia, Courthouse News Service (News Article)

D.C. Circuit Upholds EPA Extensions of Steel-Mill Air-Toxics Deadlines
A D.C. Circuit panel upheld the U.S. Environmental Protection Agency’s (EPA) decision to extend compliance deadlines until April 3, 2027, for several requirements under hazardous-air-pollutant standards covering integrated iron and steel facilities. Environmental groups argued that the extensions exceeded the Clean Air Act’s three-month limit on stays pending reconsideration and were inadequately justified. The court held that EPA acted under its separate authority to set practicable compliance dates and reasonably relied on specific technical problems affecting bleeder valves, bell leaks, furnace monitoring, slag processing, and beaching. It dismissed the fenceline-monitoring and interim-rule challenges as moot and otherwise denied the petitions.
🔗 Read more → Court Opinion via Justia

States Seek to Join Challenge to Federal Wind-Project Review Freeze
Eighteen states and the District of Columbia moved to intervene in a federal lawsuit challenging the U.S. Department of Defense’s alleged freeze on reviews of land-based wind projects. The proposed complaint alleges that, since August 2025, the department has stopped advancing national security reviews and mitigation agreements needed for Federal Aviation Administration determinations. The states claim the freeze is arbitrary, exceeds statutory authority, and unlawfully withholds or delays required agency action under the Administrative Procedure Act. They seek to vacate the policy, compel the department to resume reviews, and prevent continued implementation of the freeze.
🔗 Read more → Washington Attorney General (Press Release, Motion to Intervene, Proposed Complaint-in-Intervention)

EU Commission Proposes ETS Review and Electrification Plan
The European Commission proposed revisions to the EU Emissions Trading System (ETS) alongside an action plan to accelerate electrification across industry, transport, and buildings. The ETS proposal would make annual allowance reductions more gradual after 2030, introduce limited use of high-quality international carbon credits, continue free allocation beyond 2030, and extend the Carbon Border Adjustment Mechanism (CBAM)-related phaseout of free allowances to 2038. It would also integrate permanent carbon removals and extend ETS coverage to waste incineration. Separately, the Commission will assess an indicative 46% electrification target for 2040 and pursue measures to reduce electricity costs, support electric technologies, and accelerate grid connections.
🔗 Read more → European Commission (Press Release with Links to the Legislative Proposals, Factsheet on EU ETS, Factsheet on EU Electrification Action Plan)

EU Commission Adopts EUDR Delegated Act with Revised Scope
The European Commission adopted a Delegated Act revising products covered by the EU Deforestation Regulation (EUDR) and an Implementing Act governing its due diligence information system. The scope revision removes cattle hides, skins, and leather, retreaded tires, soybeans for sowing, articles of vulcanized rubber, conveyor and transmission belts, and aircraft and motor-vehicle seats. It adds soluble coffee, selected palm oil derivatives, and frozen cattle tongues, with newly covered products becoming subject to the EUDR from December 30, 2027. The Delegated Act remains subject to European Parliament and Council scrutiny. The system rules introduce simplified declarations for micro and small primary operators and updated specifications for automated submissions.
🔗 Read more → European Commission (Press Release, Delegated Act, Implementing Act, Guidance)

New York Pauses Certain State Permits for Large Data Centers
New York Governor Kathy Hochul issued an executive order temporarily pausing certain state environmental permits for new or expanded data centers capable of consuming at least 50 megawatts. The Department of Environmental Conservation must hold incomplete discretionary permit applications in abeyance while the Department of Public Service develops a statewide generic environmental impact statement covering energy demand, water use, air quality, noise, and impacts on disadvantaged communities. The order also directs development of a community investment framework and consideration of a fund that could require data centers to contribute toward grid upgrades and clean energy supply.
🔗 Read more → New York Governor (Press Release, Executive Order), Empire State Development (Community Investment Framework Outline)

Trump Grants Two-Year HON Rule Exemptions to Chemical Facilities
President Donald Trump issued a proclamation granting 20 chemical manufacturing facilities operated by 17 companies two-year exemptions from specified requirements of EPA’s 2024 Hazardous Organic NESHAP (HON) Rule that were promulgated under Section 112 of the Clean Air Act, extending the applicable compliance deadlines by two years. The proclamation states that the required technology is not commercially available at sufficient scale and that the exemptions serve national security interests. During the extended periods, the facilities will remain subject to the emission and compliance requirements in effect before the HON Rule. Listed operators include INEOS, Occidental Chemical, Westlake, Eastman, Hexion, Methanex, and Shintech.
🔗 Read more → White House (Proclamation, Annex I)

EU Opens Infringement Cases Over Building Energy Rules
The European Commission sent letters of formal notice to all 27 EU Member States, opening infringement procedures over their failure to fully transpose the recast Energy Performance of Buildings Directive into national law by the May 29, 2026 deadline. The directive introduces requirements covering minimum energy performance for non-residential buildings, residential renovation trajectories, solar energy, sustainable mobility infrastructure, renovation advice, and financing. It supports the EU objective of a fully decarbonized building stock by 2050. Member States have two months to respond, complete transposition, and notify the Commission. Unsatisfactory responses may lead to reasoned opinions, the next stage of the infringement process.
🔗 Read more → European Commission (Press Release, Energy Performance of Buildings Directive (EU) 2024/1275)

The best person for your next role might not live near your office—or even in the same country.

More companies are realizing they don't need to open entities everywhere just to access global talent. Instead, they're using EOR to hire internationally faster, stay compliant, and avoid building local infrastructure before they're ready.

Oyster's EOR helps companies hire, pay, and support employees in 180+ countries while Oyster handles payroll, compliance, taxes, and local employment requirements.

See how it works

Conference Paper Examines Greenwashing Risks in AI Companies’ Environmental Claims
A conference paper comparing the environmental policies and reported impacts of Microsoft, OpenAI, Amazon, Google, and Meta argues that all five engage, to varying degrees, in environmental “press release ethics.” The author uses a literature review and comparative policy analysis to assess claims concerning mineral sourcing, energy use, water consumption, and pollution. She identifies what she describes as recurring gaps between public sustainability commitments and reported operational impacts, including rising emissions, expanding data-center resource use, reliance on renewable-energy accounting, and selective presentation of recycling initiatives. These conclusions reflect the author’s analysis and are not regulatory or judicial determinations.
🔗 Read more → IASEAI Conference Proceedings (Conference Paper)

Climate Attribution Science Advances, but Confidence Varies by Hazard
A new National Academies report finds that methods for assessing climate change’s influence on individual extreme weather events have advanced substantially since 2016. Confidence is highest for extreme heat and cold and large-scale heavy rainfall, but remains lower for events driven by small-scale processes or limited observational records, including severe thunderstorms and tornadoes. The emerging field of impact attribution may also help quantify climate-related health and economic losses. The report calls for a common framework with recommended best practices, higher-resolution models, multi-method studies, periodic peer review, and stronger data coverage, particularly in the Global South.
🔗 Read more → National Academies of Sciences, Engineering, and Medicine (News Release, Report)

Catch up on previous editions → ESGLitigation.com

Enjoyed this issue? Please share it with your colleagues.
Have feedback or collaboration ideas? Contact us at [email protected]