GOP states chal­leng­ing ESG invest­ing rule tees up first post-Chevron test

A legal chal­lenge to a Biden admin­is­tra­tion rule allow­ing retire­ment plans to pri­or­i­tize envi­ron­men­tal, social, and cor­po­rate gov­er­nance poli­cies is set to be one of the first tests of how courts decide law­suits against fed­er­al reg­u­la­tions in the post-Chevron era.
The 5th U.S. Cir­cuit Court of Appeals in New Orleans on Tues­day will hear argu­ments in a law­suit brought by 25 Repub­li­can-led states that takes aim at a rule from the Depart­ment of Labor that lets 401(k) and oth­er retire­ment plans use ESG fac­tors as a “tiebreak­er” to help decide where to invest. The hear­ing comes just two weeks after the Supreme Court issued a rul­ing in Lop­er Bright Enter­pris­es v. Rai­mon­do, which held that courts no longer need to defer to the exper­tise of fed­er­al agen­cies auto­mat­i­cal­ly.

Vis­i­tors walk past the New York Stock Exchange, Fri­day, Sept. 23, 2022, in New York. (AP Photo/Mary Altaffer)

Last year, U.S. Dis­trict Judge Matthew Kac­s­maryk in Amar­il­lo, Texas, declined to block the rule, cit­ing a legal pr …