On Thursday, the Department of Justice and the U.S. Federal Trade Commission filed a statement of interest supporting a complaint which alleges BlackRock, Vanguard and State Street conspired to suppress the coal market.

In November 2024, 13 state attorneys general, led by Texas Attorney General Ken Paxton, filed a complaint, Texas et. al. v. BlackRock Inc., State Street Corp., and The Vanguard Group, against the three asset managers, alleging they conspired to suppress coal production in the United States and drive up the price of the commodity.

According to the complaint, the three asset managers used their holdings in U.S. coal companies to pressure those companies to adopt environmental, social and governance targets. The complaint highlights these managers’ membership of organizations like Climate Action 100+ and the Net Zero Asset Managers Initiative, which both called for achieving net-zero investment portfolios.

The complaint also alleges that the managers achieved “supra-competitive” profits by decreasing coal output and increasing prices. It also alleges the asset managers violated the Clayton Act, which prohibits the acquisition of minority stakes in companies to lessen competition. 

“The President has declared a national energy emergency, and we need competition in coal production now more than ever to help fuel American energy dominance,” said U.S. Assistant Attorney General Abigail A. Slater in a statement, referencing President Donald Trump’s Executive Order 14156, which declared a national energy emergency, and Executive Order 14261, which called for an increase in domestic energy production, including coal.

“As the Supreme Court has held, ‘social justifications’ for anticompetitive conduct ‘do not make it any less unlawful,’” Slater continued in the statement. “We will not hesitate to stand up against powerful financial firms that use Americans’ retirement savings to harm competition under the guise of ESG.”

BlackRock and State Street were signatories of Climate Action 100+ but later withdrew, while Vanguard was never a signatory. All three firms were, at one point, signatories of the Net Zero Asset Manager Initiative, which paused operations in January, following BlackRock’s exit from the organization.

The three asset managers are the largest shareholders in all nine publicly listed U.S. coal companies, which comprise half of U.S. coal output, according to the statement of interest. The three managers are accused of engaging with the management of these companies to lower their carbon emissions by restricting coal production. 

In a statement, BlackRock denied the allegations: “The DOJ and FTC’s support for this baseless case undermines the Trump administration’s goal of American energy independence,” BlackRock stated. “As we made clear in our earlier motion to dismiss, this case is trying to re-write antitrust law and is based on an absurd theory that coal companies conspired with their shareholders to reduce coal production.”

State Street called the lawsuit “baseless”: “State Street Global Advisors acts in the long-term financial interests of investors with a focus on enhancing shareholder value,” State Street stated. “As long-term capital providers, we have a mutual interest in the long-term success of our portfolio companies. This lawsuit is baseless, and we look forward to presenting the facts through the legal process. Additional filings do not change our assessment.”

Vanguard responded that it acted lawfully: “Though we have concerns with many of the legal interpretations promoted by the agencies, Vanguard appreciates their explicit acknowledgement that the antitrust laws allow these three things: ‘passive fund investing,’ ‘shareholder advocacy for better corporate governance’ and ‘active investing that doesn’t harm competition,’ a Vanguard spokesperson said. “The facts show Vanguard has stayed well within this construct.”

The Investment Company Institute, which represents regulated investment fund companies, stated Thursday that the federal intervention in the case could harm, rather than help, investment in coal companies.

“Fund investments are invaluable in providing capital formation for American coal, oil, and gas companies,” the ICI stated. “Billions upon billions of dollars are invested by asset managers today on behalf of their clients to make the U.S. energy industry the best in the world both … like President Trump wants. The case the federal government is now weighing in on seeks to attack minority investors for decisions they believe are in the best interest of fund shareholders. The relief suggested by the plaintiffs would devastate funds, investors, and the energy industry itself. “