Federal Judge Greenlights Multistate Antitrust Lawsuit Against BlackRock, Vanguard, and State Street
Syndicated investigative reporter,
Michael Mick Webster
Tyler, Texas — A federal judge in the Eastern District of Texas Federal Judge Greenlights Multistate Antitrust Lawsuit Against BlackRock, Vanguard, and State Street automaticallydenied motions to dismiss in a high-profile case accusing BlackRock, Vanguard, and State Street of coordinating to suppress U.S. coal output—allegedly driving up energy prices—through climate-aligned investor initiatives. The ruling allows core antitrust claims by Texas and a coalition of Republican-led states to move forward into discovery. Reuters
What the case is about
Filed on Nov. 27, 2024 (Docket 6:24-cv-00437), Texas et al. v. BlackRock, Inc. et al. claims the asset managers used their sizable stakes in competing coal producers and participation in initiatives such as Climate Action 100+ and the Net Zero Asset Managers initiative to “pressure coal companies to reduce output,” allegedly harming competition and consumers in violation of the Sherman Act and Section 7 of the Clayton Act. The complaint highlights the firms’ combined ownership across major coal companies and utilities as part of its common-ownership theory. Harvard Law Forum on Governance
The ruling
U.S. District Judge Jeremy Kernodle dismissed only a small subset of counts (including certain state consumer-protection claims) but let the core antitrust theories proceed. Reuters reports the court found the states pled “dozens of specific examples” sufficient—at the pleading stage—to plausibly allege agreement and coordinated pressure tied to climate commitments. The decision keeps discovery on track and significantly raises the stakes for the asset-management industry. Reuters
Federal antitrust enforcers weigh in
In May 2025, the DOJ and FTC filed a Statement of Interest in the case—marking their first formal filing on the antitrust implications of common shareholdings—arguing that “passive” investment safe harbors do not protect coordinated investor actions that encourage industry-wide output reductions. The filing also ties the issue to the administration’s declared national energy emergency. Department of Justice
How the firms respond
All three firms deny wrongdoing. As covered by ESG Today and Reuters:
- Vanguard called the ruling “disappointing” and promised a vigorous defense.
- State Street said the case is baseless and risks investors and markets.
- BlackRock argued the theory is “absurd” and that forced divestment would harm coal companies’ access to capital and raise energy prices—ironically the opposite of what the states claim they did. ESG TodayReuters
Why it matters
- Antitrust & finance precedent: The case tests whether coordinated shareholder stewardship across competitors can be treated like a traditional output cartel under antitrust law—potentially reshaping ESG collaboration, proxy engagement, and even index-fund governance. Department of Justice
- Energy markets: Plaintiffs allege pressure to halve coal output by 2030, framing energy-price impacts as consumer harm. The merits will turn on whether discovery shows actual collusion and market effects rather than parallel, publicly stated climate policies. Texas Attorney General
- Broader enforcement posture: The DOJ/FTC stance signals expanded scrutiny of common ownership and investor networks when they touch on competitor output or strategic alignment. Department of Justice
What’s next
With the dismissal bid largely denied, the states can pursue document production and depositions, and the court will evaluate the evidence on agreement, market definition, and competitive effects. A loss for the defendants could restrict multi-manager climate coalitions or force governance firewalls; a win could reaffirm investor engagement as protected shareholder advocacy. Texas Scorecard
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