Red States Seek Quick Win in Lawsuit Challenging ESG 401(k) Rule

Red states suing over the Biden administration’s new regulation allowing socially conscious retirement investing asked for a quick victory, arguing that the records produced by the Labor Department confirm that the rule is invalid.

The states accuse the DOL of contradicting itself, saying that the challenged rule is at odds with the department’s prior conclusions that strict regulations are necessary to protect investors from “shortcomings” in the market for environmental, social, and corporate governance investments. Without offering evidence to rebut this earlier finding, the department’s new rule “weakened or eliminated those protections” and expressly allowed investment decisions based on these ...