AUSTIN – A federal judge has ruled an antitrust lawsuit against three top asset managers, including BlackRock, over their ESG policies can continue.
In his August 1 ruling, U.S. District Judge Jeremy Kernodle dismissed only three of the 21 counts in the lawsuit filed last year by Texas Attorney General Ken Paxton and 12 other Republican AGs who claimed BlackRock, State Street and Vanguard used climate activism to violate antitrust laws by reducing coal production and increasing energy prices.
The companies said they will continue to fight the claims they violated federal antitrust laws by joining Climate Action 100+, which is an initiative to combat climate change, and by using shareholder advocacy to further environmental, social and governance goals.
Kernodle, who was appointed by President Donald Trump, dismissed claims that the companies violated Louisiana and Nebraska consumer protection laws. But he said the rest of the claims warrant further examination.
“Plaintiffs have identified enough circumstantial evidence to suggest that defendants agreed to collectively pressure coal companies to reduce the output of coal in the relevant markets and disclose future output information,” Kernodle wrote in his 61-page order.
Paxton
Paxton called the ruling “a major victory.”
“BlackRock, State Street, and Vanguard — three of the most powerful financial corporations in the world — created an investment cartel to illegally control national energy markets and squeeze more money out of hardworking Americans,” Paxton said in an August 1 statement. “Today’s victory represents a major step in holding them accountable.
“I will continue fighting to protect Texas and defend America’s energy independence from this unlawful conspiracy.”
Paxton led the other AGs in suing the asset managers last year for using their combined influence over the coal market to “weaponize their shares to pressure the coal companies to accommodate ‘green energy’ goals by halving coal output by 2030.”
“The deliberate and artificial supply reduction increased prices and enabled the investment companies to produce extraordinary revenue gains by increasing the cost of electricity for American households,” Paxton’s office said. “Their conspiracy violated multiple state and federal laws forbidding anticompetitive schemes and deceptive trade practices.”
In May, the Trump administration filed a joint Department of Justice and Federal Trade Commission statement of interest to support Paxton’s efforts to hold the asset managers accountable.
The companies deny wrongdoing, previously saying the claims were Top of Form“based on half-baked and untested theories.”
Other states that joined Paxton in the lawsuit are Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia and Wyoming.
U.S. District Court for the Eastern District of Texas, Tyler Division, case number 6:24-cv-00437
