The federal district court for the Northern District of Texas denied the U.S. Department of Labor’s motion to transfer a lawsuit challenging the agency’s amendment of its Investment Duties regulation that governs private-sector employee benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA). The amendments reversed and modified certain changes made during the Trump administration, including by providing that ERISA plan fiduciaries may consider factors such as the economic effects of climate change and other environmental, social, or governance (ESG) factors on investments. The Department of Labor’s motion argued that the proper court for the suit was either the federal district court for the District of Columbia, a district where one of the plaintiffs resides, or, at a minimum, a division in the Northern District of Texas in which more than one district judge sits. The district court found that venue was proper in the Northern District of Texas because an individual plaintiff (added in an amended complaint after the motion for transfer was filed) lived in Amarillo, Texas, and because Texas—which was one of the 25 state plaintiffs—“resides everywhere in Texas.” The court further found that the Department of Labor fell “well short” of meeting its burden of demonstrating that convenience of the parties and witnesses and the interest of justice required transfer to the District of Columbia. The court also found that the Department of Labor’s arguments that the plaintiffs were engaged in “judge-shopping” presented an “unprecedented and unworkable” standard for motions to transfer.

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

Utah v. Micone

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Texas Federal Court Declined to Transfer Case Challenging Rules Allowing Benefit Plan Fiduciaries to Consider ESG Factors

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United States of America

Texas

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Texas Federal Court Declined to Transfer Case Challenging Rules Allowing Benefit Plan Fiduciaries to Consider ESG Factors

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