AMARILLO - A trial court recently denied the Department of Labor’s motion to transfer a “ESG Rule” lawsuit brought by more than two dozen attorneys general out of the Northern District of Texas, Amarillo Division.
The suit, Utah v. Walsh, was filed earlier this year and asserts claims under the Administrative Procedure Act against the DOL regarding the “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” (2022 rule).
According to the suit, the 2022 rule replaces two prior rulemakings and 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 DOL filed a motion to transfer on March 7 under Section 1404, asserting the case belongs in D.C. or a venue where the plaintiffs are located.
The state of Texas is a plaintiff in the case. The plaintiffs argued that Texas resides in every place within its borders.
The defendants also filed a reply in support of their motion on March 14, arguing that the court should transfer the case “in the interests of justice and preventing Plaintiffs’ gamesmanship from undermining public confidence in the judicial system,” court records show.
U.S. District Judge Matthew Kacsmaryk is the only judge for the Amarillo Division and is currently presiding over the case.
On March 28, Judge Kacsmaryk denied the DOL’s motion, finding that the “Defendants propose an unprecedented and unworkable standard for motions to transfer that would tum Section 1404 analysis on its head.”
According to Attorney General Ken Paxton, 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.
“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 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.”