Texas has won a victory in its lawsuit against the Biden Administration’s Department of Labor rule that puts Environmental, Social, and Governance (“ESG”) investing ahead of the long-term financial security of retirees.
The lawsuit was filed to stop a rule that would allow retirement fund managers to ignore their fiduciary responsibility to do what’s in the best financial interests of their clients. The rule instead gives these managers legal cover to consider ESG factors when managing the retirement accounts of over 150 million Americans, even though these investments will very likely not lead to the best financial outcomes.
The Biden Administration had filed a motion to transfer, which, if granted, would have led to the lawsuit being heard in the U.S. District Court for the District of Columbia or another court outside of Texas. The U.S. District Court for the Northern District of Texas has now denied that motion and recognized that it is proper for the lawsuit—brought by Attorney General Paxton, a coalition of other states, and a plaintiff who resides in Amarillo—to be heard in Texas.
The lawsuit aims to ensure that the rule, which violates the Employee Retirement Income Security Act of 1974 (“ERISA”), is terminated. Attorney General Paxton also filed a motion for a preliminary injunction to stop the Biden Administration from enforcing the rule during the pendency of the case.
“This is an important victory in my ongoing fight to protect Texas from an unconstitutional Biden Administration rule that exposes retirees’ savings to politically-motivated ESG investing in violation of federal law,” said Texas Attorney General Paxton. “Biden’s lawyers attempted to ‘judge shop’ by requesting to change the venue of the trial to Washington, D.C. instead of the Texas court where the case has been filed. The judge denied the Biden Administration’s motion to transfer venue. I will continue to pursue justice relentlessly for the State of Texas against Joe Biden’s onslaught of illegal federal policy.”