BlackRock, State Street, and Vanguard have battled an antitrust case in Texas since last year. Earlier this summer, BlackRock filed a Motion to Dismiss in the litigation. Despite the asset manager’s capitulation and withdrawal from the Net Zero Asset Managers (NZAM), the Texas court denied that motion last week. In his Order, the federal judge presiding over the case writes:
“Defendants argue that they are mere passive investors that cannot be liable under the Clayton Act based on their acquisition of stock… They further argue that Plaintiffs fail to allege any plausible agreement among Defendants to unlawfully harm competition in violation of the Sherman Act… And they argue that Plaintiffs fail to allege any plausible harm to competition, as necessary under both statutes… BlackRock also separately moves to dismiss the consumer protection claims, contending that the governing statutes exempt securities transactions and that Plaintiffs fail to state a claim in any event… As explained below, the Court largely denies Defendants’ motions. At this stage in the proceeding, the Court must assume that Plaintiffs’ allegations are true… And here, Plaintiffs have alleged that Defendants acquired significant amounts of stock in coal companies and then used their market power to pressure the companies to decrease coal production. Plaintiffs’ allegations, moreover, are not vague and conclusory but include dozens of specific examples of Defendants’ conduct supporting their theory.”
This ruling means that the litigation will continue into the discovery phase. During this time, evidence will be gathered and more facts will come to light. Legal scholars have been skeptical of the anti-ESG’s antitrust claims, but in today’s political environment possibilities that were once considered a long shot must be considered plausible. The next major milestone in the litigation is likely to be a motion to dismiss filed after discovery wraps. Should that motion be denied, the litigation will move forward to trial, or a hefty settlement.
I’ll be talking to our panel of experts about these developments in the Texas antitrust case next week at our “ESG Litigation Landscape 2025” webcast. Members can access the webinar live on August 12, at 2:00 p.m. EST, or watch the playback at their convince.
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