Issue - May 12, 2026

Good morning. It’s Tuesday, May 12, and this week’s ESG Litigation Weekly covers the U.S. Justice Department’s lawsuit challenging Minnesota’s climate deception case against oil companies, California’s proposed $12.75 million settlement with GM over allegations of driver data sales, the EU Deforestation Regulation simplification package, and more.

U.S. Justice Department Sues Minnesota Over Climate Deception Case
The U.S. Department of Justice (DOJ) filed a federal complaint against Minnesota and Attorney General Keith Ellison, seeking to block the state’s pending climate deception lawsuit against ExxonMobil, Koch Industries, the American Petroleum Institute, and related entities. Minnesota’s underlying case, filed in 2020, alleges consumer fraud, deceptive trade practices, failure to warn, fraud and misrepresentation, and false advertising. DOJ argues that Minnesota is attempting to regulate global greenhouse gas emissions and national energy policy through state law, and claims the Constitution and the Clean Air Act preempt those efforts.
🔗 Read more → DOJ (Press Release, Court Filing)

California Announces $12.75 Million Settlement with GM Over Driver Data Sales
California Attorney General Rob Bonta and local prosecutors announced a proposed settlement with General Motors (GM) and OnStar over allegations that GM collected and sold Californians’ driving behavior and location data without adequate notice or consent. The complaint says GM collected OnStar and Smart Driver data from 2016 to 2024 and began selling data to LexisNexis Risk Solutions and Verisk Analytics in 2020 for driver-rating products marketed to insurers. The settlement, subject to court approval, includes $12.75 million in civil penalties, data deletion requirements, privacy program obligations, and a five-year ban on selling driving data to consumer reporting agencies.
🔗 Read more → California Office of the Attorney General (Press Release, Court Filing)

NAACP Seeks Injunction Over xAI Data Center Power Plant
The NAACP and NAACP Mississippi State Conference asked a federal court in Mississippi for a preliminary injunction in their Clean Air Act citizen suit against xAI and MZX Tech. The groups allege the companies built and operated an unpermitted gas turbine power plant in Southaven, Mississippi, to power xAI’s Colossus 2 data center in Memphis. Their brief states that the site expanded from 27 to 33 turbines after a February 13, 2026 notice of intent to sue, without required permits, pollution controls, emissions monitoring, or community involvement. The motion asks the court to halt unpermitted operations pending compliance.
🔗 Read more → Earthjustice (Press Release, Court Filing)

EEOC Sues New York Times Over Alleged Race and Sex Discrimination
The U.S. Equal Employment Opportunity Commission (EEOC) sued The New York Times Company in federal court in New York, alleging that the publisher failed to promote a white male employee because of his race and/or sex. The EEOC claims the employee was passed over for a Deputy Real Estate Editor role despite relevant experience, and that the company’s diversity, equity, and inclusion, or DEI, leadership representation goals influenced the selection process. The complaint alleges violations of Title VII of the Civil Rights Act of 1964 and seeks injunctive relief, back pay, compensatory damages, punitive damages, and other relief.
🔗 Read more → EEOC (Press Release, Court Filing)

European Commission Publishes EUDR Simplification Package
The European Commission published a simplification package for the revised EU Deforestation Regulation (EUDR), including a report to the European Parliament and the Council, updated guidance and FAQs, information system updates, and a draft delegated act on product scope. The Commission says the measures are expected to reduce annual compliance costs by about 75% compared with initial compliance costs under the EUDR. The draft delegated act proposes adding products such as soluble coffee and certain palm oil derivatives, while excluding items such as leather, retreaded tires, samples, certain packing materials, used products, and waste. Public feedback on the draft act is open until June 1, 2026.
🔗 Read more → European Commission (Press Release, Report, Guidance, Draft Delegated Regulation and Public Feedback Participation)

European Commission Opens Feedback on Revised ESRS and Voluntary Reporting Standard
The European Commission launched a one-month public feedback period on draft revised European Sustainability Reporting Standards (ESRS) and a voluntary sustainability reporting standard for smaller companies. The revised ESRS would apply from the financial year 2027, with optional use for the financial year 2026, and aim to reduce mandatory datapoints by more than 60% and total datapoints by more than 70%. The voluntary standard would support companies outside mandatory Corporate Sustainability Reporting Directive (CSRD) reporting and set a “value chain cap” for information requests to companies with 1,000 employees or fewer. Feedback is open until June 3, 2026.
🔗 Read more → European Commission (Press Release, Draft Delegated Regulation and Public Feedback Participation: Revised ESRS, Voluntary Reporting Standard for Smaller Companies)

U.S. SEC Moves Toward Rescinding Climate Disclosure Rule
The U.S. Securities and Exchange Commission (SEC) is moving toward rescinding its 2024 climate-related disclosure rule, according to an Office of Information and Regulatory Affairs (OIRA) posting for a proposed rule titled “Rescission of Climate-Related Disclosure Rules.” The SEC is drafting regulations to undo the stayed rule, which would have required public companies to disclose certain climate-related risks, financial information, and greenhouse gas emissions. Reuters reported that an SEC spokesperson said the move would return the agency to its core mandate of investor-material corporate disclosures. The timing for final action remains uncertain, with the proposal still under OIRA review.
🔗 Read more → Reuters, OIRA

California Packaging EPR Regulations Take Effect
CalRecycle, California’s Department of Resources Recycling and Recovery, announced that permanent regulations under California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act, SB 54, were approved by the Office of Administrative Law and took effect on May 1, 2026. The law establishes an extended producer responsibility (EPR) program for packaging and single-use plastic food-service ware. CalRecycle’s producer guidance indicates covered producers have until June 1, 2026, to register with Circular Action Alliance, apply to comply independently, or seek a small producer exemption. The program targets a 25% reduction in single-use plastic, 65% recycling, and 100% recyclable or compostable covered materials by 2032.
🔗 Read more → CalRecycle (Plastic Pollution Prevention and Packaging Producer Responsibility Act, Producer Guidance)

European Parliament Draft Proposes Stricter SFDR Product Labeling Rules
A draft report from the European Parliament’s ECON Committee proposes amendments to the Commission’s Sustainable Finance Disclosure Regulation (SFDR) review, aimed at strengthening transparency around sustainability-related financial products. The rapporteur supports the proposed “transition,” “ESG basics,” and “sustainable” categories, but calls for additional safeguards. These include mandatory principal adverse impact indicators for categorized products, engagement strategy disclosures, and a disclaimer for products that mention sustainability factors but do not meet EU sustainable product standards. The draft also proposes a tougher ESG Basics test and raising the taxonomy-aligned safe harbor from 15% to 20%.
🔗 Read more → European Parliament Draft Report

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No7 Beauty Faces Class Action Over “Biodegradable” Wipes Claims
A proposed class action filed in the Southern District of New York alleges that Boots Retail USA, doing business as No7 Beauty, falsely marketed makeup remover and cleansing wipes as “biodegradable.” The plaintiffs claim consumers would reasonably understand the term to mean the wipes break down within a reasonably short period after household disposal, but allege landfill conditions do not allow that to occur. The complaint also challenges fine-print references to EN13432 and ASTM D5511-18 testing, arguing they do not adequately support the landfill biodegradability claim. The lawsuit brings New York consumer-protection and express-warranty claims.
🔗 Read more → Court Filing via ClassAction.org

Corporate Climate Defenses Are Becoming More Technical
A new Grantham Climate Litigation Guide from the London School of Economics and Political Science (LSE) and Imperial College London analyzes corporate defenses across 10 climate litigation case studies. The guide finds that as climate cases mature, corporate defendants are moving beyond broad arguments about legal duty, responsibility, and judicial competence toward more technical challenges involving climate science, causation, attribution, and market substitution. Courts have rejected some arguments that climate change is too diffuse for corporate liability, but scientific uncertainty and market substitution defenses have influenced outcomes in some cases. For ESG teams, the guide underscores why climate evidence and transition-plan documentation are becoming more relevant to litigation risk.
🔗 Read more → Grantham Climate Litigation Guide 2 “Corporate defences in climate litigation: a comparative analysis of arguments and court responses”

Catch up on previous editions → ESGLitigation.com

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