Last fall, a coalition of eleven Republication attorneys-general filed an antitrust complaint against three major asset managers, alleging that the asset managers' adherence to climate-friendly principles--which discourage the use of coal--constituted antitrust violations when considered in tandem with their investments in coal companies, as the companies allegedly used their influence to reduce coal output, thus driving up the price of coal and increasing their profits. This lawsuit later received the support of the Trump Administration's DOJ (Antitrust Division) and FTC.
On Friday, August 1, a judge in federal district court in Texas rejected the asset managers' request to dismiss the complaint, holding that the “Plaintiffs have [] plausibly stated claims under the [antitrust laws].” Specifically, the court ruled that the Republican Attorneys-General “identified enough circumstantial evidence to suggest that Defendants agreed to collectively pressure coal companies to reduce the output of coal in the relevant markets,” as well as evidence of “parallel conduct,” including participation in “climate initiatives” and a “shared moral imperative to combat climate change.” In other words, a federal judge has determined that the complaint here alleges conduct that, if proven, would constitute an antitrust violation, thus lending credence to this aggressive interpretation of the antitrust laws.
While this development is certainly noteworthy, reflecting an endorsement of the legal theories at issue, it should be emphasized that this remains an early stage of the case, and that the attorneys-general must still prove their claims in order to hold the asset managers liable. However, these attorneys-general may now pursue discovery into the asset managers' operations, a time-consuming, expensive, and intrusive process--and one that may reveal information beneficial to the prosecutors, increasing pressure on the asset managers. This case is far from over, but the state AGs have scored a significant early victory.