SALT LAKE CITY, UTAH – Attorney General Sean D. Reyes announced that his office would be appealing a U.S. District Court’s September ruling in Utah v. Su, which involves a challenge to a U.S. Department of Labor rule that would negatively affect the retirement accounts of millions of Americans. The federal government’s rule would allow 401(k) managers to direct their clients’ money to ESG (environmental, social, governance) investments, contrary to the requirements of the Employee Retirement Income Security Act of 1974 (ERISA).
The State of Utah is joined by 25 states in the appeal to the U.S. Court of Appeals for the Fifth Circuit – all of which were on the original lawsuit at the District Court level.
General Reyes issued the following statement:
Our coalition was deeply disappointed in the court’s ruling. Contrary to ERISA, the rule clearly exceeds DOL’s authority. The facts and legal arguments are still in our favor, and we look forward to our appeal prevailing in the Fifth Circuit.
Permitting asset managers to direct retirement funds from hard-working Americans into ESG investments puts trillions of dollars at risk in exchange for a radical climate agenda. Our citizens deserve real fiduciaries who manage funds to maximize value, not gamble with them for political gain. We are prepared to fight all the way to the Supreme Court to defend the hard-earned savings of our constituents.
The new rule from the Department of Labor, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholding Rights,” took effect on January 30, 2023. Two-thirds of the U.S. population’s retirement savings accounts are believed to have been affected by this new regulation, totaling $12 trillion in assets. In its complaint, the coalition explained that the rule exceeds the Department’s statutory authority in violation of ERISA and the Administrative Procedure Act (APA) and is arbitrary, capricious, and irreconcilable with ERISA’s language.
Joining Utah on this appeal to the Fifth Circuit are the States of Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Ohio, South Carolina, North Dakota, Tennessee, Texas, Virginia, West Virginia, and Wyoming.