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 Employment Retirement Income Security Act of 1974 (“ERISA”) to consider environmental, social, and governance factors.
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. 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. Accordingly, the 2022 Rule remains in effect.
