BlackRock, Vanguard, and State Street have urged a Texas court to dismiss the antitrust lawsuit accusing them of conspiring to reduce coal production, arguing that the case is based on “half-baked and untested” legal theories.
In a filing, the asset managers contended that the allegations require an unprecedented reinterpretation of antitrust law, which would ultimately harm both coal companies and individual investors. “To find that Plaintiffs have stated an antitrust claim on these alleged facts requires contorting the law,” they told the judge, calling the case an “adventurous attempt to rewrite antitrust law.”
The lawsuit, led by the Texas state government and joined by 10 other Republican-led states, claims that the firms violated antitrust laws through their involvement in climate initiatives that allegedly curtailed coal production and raised energy prices. However, the asset managers argued that the complaint provides no evidence of them instructing coal companies to cut output.
BlackRock, Vanguard, and State Street collectively manage over $26 trillion in assets and exert significant influence over corporate governance in the U.S. through their proxy voting power. While their roles in shaping executive pay, board elections, and environmental, social, and governance (ESG) policies have drawn both praise and scrutiny, they have increasingly faced political backlash, particularly from conservative lawmakers in energy-producing states.
The lawsuit forms part of a broader campaign by U.S. conservatives against major financial firms’ ESG policies, alleging that their participation in industry net-zero initiatives constitutes collusion. In their response, the asset managers defended their investment strategies, describing them as “commonplace” practices essential to providing low-cost index funds that millions of Americans rely on for retirement savings.
The case, Texas et al v. BlackRock Inc et al, is being heard in the U.S. District Court for the Eastern District of Texas, case number 24-00437.
