Twenty-five states, an energy company and its subsidiary, an oil and gas trade group, and an individual plaintiff filed a lawsuit in the federal district court for the Northern District of Texas challenging a rule adopted by the U.S. Department of  Labor in 2022 that amended the Investment Duties regulation governs private-sector employee benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA), replacing two rules promulgated by the Trump administration in late 2020. The plaintiffs alleged that the 2022 rule “undermines key protections for retirement savings of 152 million workers … in the name of promoting environmental, social, and governance (‘ESG’) factors in investing, including the Biden Administration’s stated desire to address climate change.” The plaintiffs asserted that the 2022 rule contravened ERISA’s “clear command that fiduciaries act with the sole motive of promoting the financial interests of plan participants and their beneficiaries” by authorizing fiduciaries to select investments “based on collateral benefits other than investment returns” and allowing the exercise of proxy rights to “promote non-pecuniary benefits or goals unrelated to [the] financial interests of the plan participants and beneficiaries.” The plaintiffs also contended that the major questions doctrine precluded the Labor Department from authorizing or mandating ERISA fiduciaries to consider nonpecuniary factors such as climate change. In addition, the plaintiffs asserted that the 2022 rule was an arbitrary and capricious exercise of administrative power.

Challenge to the U.S. Department of Labor's amendment of the Investment Duties regulation governing private-sector benefit plans.

Utah v. Micone

<p>This entry was provided by the Sabin Center for Climate Change Law. Please see the terms of use for citation and licensing of third party data.</p>

Lawsuit Said Department of Labor’s Investment Duties Rule Unlawfully Allowed Fiduciaries to Consider Nonpecuniary Factors Including Climate Change

Filed

United States of America

Texas

The Climate Litigation Database

Find climate change litigation data and indicators for {text}.

{text} litigation

Sabin Center for Climate Change Law provides Climate Litigation Database, a comprehensive database of US and Global climate change caselaw

Quickly and easily search through the complete text of thousands of climate change law and policy documents from every country.

Search the Climate Litigation Database

An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Using laws and the legal system more broadly to protect vulnerable entities

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

People with different national or cultural traditions from the dominant population

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

This sector involves the wholesale and retail selling of goods.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Lawsuit Said Department of Labor’s Investment Duties Rule Unlawfully Allowed Fiduciaries to Consider Nonpecuniary Factors Including Climate Change

Policy instrument

Impacted group

Just transition

Fossil fuel

Economic sector

Finance