On September 21, 2023, a Texas federal court dismissed an action commenced by more than two dozen Republican state attorneys general challenging a 2022 Department of Labor (DOL) Rule that addressed consideration of ESG factors by retirement plan fiduciaries in their decision-making. As we previously reported, Plaintiffs had alleged that the Rule violated the Administrative Procedure Act because it is arbitrary and capricious and “runs afoul” of ERISA.
The DOL Rule provided that fiduciaries’ investment decisions “must be based on factors that the fiduciary reasonably determines are relevant to a risk and return analysis.” But the Rule also clarified that risk and return factors “may include” ESG factors depending on individual facts and circumstances. On summary judgment, the Court found that the Rule did not violate ERISA’s mandate that a fiduciary must discharge his or her…
