BlackRock Inc. has lost a bid in a Texas federal court to throw out a lawsuit filed by Texas, Oklahoma and several other states over its environmental influence on coal producing companies that it had made investments.
U.S.District Judge Jeremy D. Kernodle recently ruled after BlackRock, Inc, State Street Corporation and Vanguard Greoup, Inc., three of the largest investors in the world, had been accused by Texas Attorney General Ken Paxton of acquiring “substantial stockholdings in every significant publicly held coal producer in the United States” and agreed to use their holdings to influence these companies and artificially depress the output of coal.” Paxton’s lawsuit accused them of doing so in the name of “environmental stewardship” and “concern for the climate.”
Oklahoma joined the lawsuit in January 2025 along with Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, Louisiana, West Virginia. Wyoming later filed a complaint as well.
Paxton contended “Defendants have reaped the rewards of
higher returns, higher fees, and higher profits, while American consumers have paid the price in higher utility bills and higher costs.” He accused the firms of violating state and federal lantitrust laws.
Paxton further claimed BlackRock had separately violated state consumer protection laws by advertising certain funds as not following an “ESG investsment strategy” while using the funds to pursue an ESG agenda through engagements and proxy voting.
The defendants attempted to have all of the claims dismissed. They also argued there was no violation of the Sherman Anti-Trust Act, but Judge Kernodle disagreed. “Defendants’ arguments that Plaintiffs failed to allege a conspiracy are unpersuasive.”
He further determined, “Plaintiffs may ultimately be unable to prove that Defendants entered into an agreement to pressure the Coal Companies that led to anticompetitive effects in the
relevant coal markets. But at this stage, Plaintiffs’ Section 1 claim is plausibly alleged. Accordingly, Defendants’ motion to dismiss is DENIED as to Count II.”
BlackRock’s effort to have count III dismissed was also denied. The claims by Oklahoma and the other states that BlackRock and other firms violated state anti-trust laws stood up as Judge Kernodle dismissed the investment companies efforts to have them thrown out.
