BlackRock, Vanguard and State Street Seek Dismissal of Texas Antitrust Lawsuit

BlackRock, Vanguard and State Street have requested that a Texas court dismiss a lawsuit accusing them of conspiring to curtail coal production, arguing that the claims are legally unfounded. According to Reuters, the asset management giants characterized the allegations as “half-baked and untested” legal theories, urging the court to reject what they called an “adventurous attempt to rewrite antitrust law.”

The lawsuit, spearheaded by Texas and backed by ten other Republican-led states, asserts that the firms’ involvement in climate-focused industry groups equates to collusion that has contributed to reduced coal production and higher energy costs.

However, the companies countered that the complaint fails to provide any instance of them explicitly instructing a coal company to limit its output. Per Reuters, they emphasized that their investment strategies are standard industry practices that help facilitate cost-effective retirement savings for millions of Americans.

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The firms, which collectively manage over $26 trillion in assets, wield significant influence in corporate governance, including executive compensation, board elections, and environmental, social, and governance (ESG) policies. While this influence has drawn scrutiny from various political factions, conservative politicians from energy-producing states have been particularly vocal in their criticism, accusing the firms of using their market power to push climate policies that undermine the coal industry.

According to Reuters, BlackRock, Vanguard and State Street defended their actions as routine for index fund management, stating that such practices are essential for delivering low-cost investment options.

Source: Reuters