Federal Judge Upholds ERISA ESG Rules

On September 21, 2023, a federal court in the Northern District of Texas (the “Court”) dismissed a challenge to the Department of Labor’s 2022 Investment Duties Rule (the “Rule”) allowing fiduciaries plans under the Employee Retirement Income Security Act of 1974 (“ERISA”) to consider environmental, social, and governance factors.[1]

Twenty-six states and other interested parties argued that the Rule is invalid and violates the Administrative Procedure Act because it is arbitrary and capricious and runs afoul of ERISA.[2] After reviewing competing motions for summary judgement, the Court determined that the Rule is a reasonable interpretation of ERISA and is not arbitrary and capricious.[3] Accordingly, the 2022 Rule remains in effect.

For additional information on the Rule, please see Legal Alert: DOL Opens ESG Door: What Does It Mean for Plan Fiduciaries? from our ERISA team. If you have any questions about your fiduciary obligations, please free to contact us.


By the Investment Management and Broker-Dealer Team at Kilpatrick Townsend & Stockton

This content is provided by Kilpatrick Townsend & Stockton LLP for informational purposes only and is not intended to advertise our firm’s services, to solicit clients, or to provide legal advice.  Viewers should not rely on the posted materials as advice about specific legal problems.  Such advice can be rendered only by competent counsel familiar with the particular facts and circumstances involved.  Posting and viewing of the materials on our website or in printed form is not intended to constitute the rendering of legal advice or to create an attorney-client relationship with the viewer.  If Kilpatrick Townsend & Stockton LLP does not already represent you, and you send us an e-mail, your e-mail will not create an attorney-client relationship and will not be treated as privileged or confidential.

Attorney Advertising – Kilpatrick Townsend & Stockton LLP, 1100 Peachtree Street NE, Suite 2800, Atlanta, GA 30309 | 404-815-6500.

For more information, please refer to our Terms of Use and Privacy Policy.

[1] Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights. 87 C.F.R. 73822 (Dec. 1, 2022), available at: https://www.govinfo.gov/content/pkg/FR-2022-12-01/pdf/2022-25783.pdf.

[2] Utah v. Walsh, 2:23-CV-016-Z (N.D. Tex. Sept. 21, 2023), available at https://aboutblaw.com/baCI (“Utah v. Walsh”).

[3] Utah v. Walsh.

Knowledge assets are defined in the study as confidential information critical to the development, performance and marketing of a company’s core business, other than personal information that would trigger notice requirements under law. For example,
The new study shows dramatic increases in threats and awareness of threats to these “crown jewels,” as well as dramatic improvements in addressing those threats by the highest performing organizations. Awareness of the risk to knowledge assets increased as more respondents acknowledged that their