Texas Coal Lawsuit Against BlackRock Moves Forward

Texas’ Coal Lawsuit Against BlackRock, Vanguard, and State Street Presses On

The high-profile lawsuit brought by Texas against BlackRock, State Street, and Vanguard has entered a new phase. Nearly a year after Attorney General Ken Paxton filed the case alleging collusion to restrict coal production, the claims remain active and are moving forward in court.

Antitrust Theory Behind the Case

In November 2024, Texas and 12 other Republican-led states filed suit against BlackRock, Vanguard, and State Street, alleging that coordinated climate initiatives amounted to illegal collusion.

The complaint argues that such efforts inflated energy costs and targeted coal, a sector that remains central to U.S. power generation.

Announcing the case, Attorney General Ken Paxton stated:

“Texas will not tolerate the illegal weaponisation of the financial industry in service of a destructive, politicised ‘environmental’ agenda. BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices. Their conspiracy has harmed American energy production and hurt consumers. This is a stunning violation of State and federal law.”

The lawsuit specifically cites alliances such as Climate Action 100+, portraying them as agreements that discouraged investment in coal rather than simple policy discussions.

On August 1, 2025, Judge Jeremy Kernodle of the Eastern District of Texas issued a ruling that keeps the lawsuit very much alive. While he tossed out three of the 21 claims, he allowed the core antitrust arguments to proceed.

That means the states now get to dig deeper into emails, board minutes, and internal communications to see if the asset managers really did agree to restrict coal production.

How the Firms Responded

The defendants, unsurprisingly, see things differently. BlackRock has dismissed the case as legally unsound, calling it an attempt to “re-write antitrust law” based on what it described as an “absurd theory.” The firm has maintained that its investment decisions are guided by fiduciary duty, not politics.

Vanguard and State Street have echoed that stance, portraying the case as a politically motivated attack on standard investment practices.

In a statement responding to the lawsuit and subsequent filings, BlackRock argued:

“Forcing asset managers to divest from coal companies will harm their ability to access capital and is likely to lead to higher energy prices.”

A Rare Federal Signal

Adding weight to the states’ case, the FTC and the Justice Department’s Antitrust Division jointly filed a Statement of Interest, a move that drew national attention.

The agencies stressed that agreements among investors that effectively restrict output are not shielded from antitrust law, even when framed around climate or ESG initiatives.

While FTC Chair Lina Khan did not issue a direct public quote on this case, the joint filing underscored her agency’s willingness to test the limits of ESG coordination under competition law.

A ruling in favor of the states could redefine how Wall Street approaches ESG investing, with coordinated climate pledges potentially viewed through the lens of antitrust law.

The outcome may influence energy costs, the role of coal in U.S. markets, and the global framework for climate-focused investing.

With discovery underway and no settlement on the horizon, the lawsuit is poised to become a pivotal test of how far antitrust law can reach into financial and energy policy.

People Also Ask

When was the Texas coal lawsuit filed?
November 27, 2024.

Who are the defendants?
BlackRock, Vanguard, and State Street.

What laws are in play?
Mainly the Sherman Antitrust Act and Clayton Act, plus state statutes.

What stage is the lawsuit at now?
As of September 2025, most claims are moving forward after a federal judge denied dismissal.

Why is the lawsuit significant?
It could reshape ESG investing and alter how asset managers approach climate-focused strategies.