US Department of Justice considers joining Texas antitrust case against BlackRock and State Street
The DOJ's involvement in the landmark ESG antitrust lawsuit could reshape how the world's largest asset managers wield their influence over entire industries
The US Department of Justice has entered the legal fray surrounding one of the most significant antitrust cases targeting institutional investors in recent memory. The DOJ filed a statement of interest in State of Texas et al. v. BlackRock, Inc. et al., backing antitrust claims against BlackRock, State Street, and Vanguard over their alleged coordination to suppress coal production through ESG initiatives.
What Texas is actually alleging
The lawsuit was originally filed in November 2024 by Texas and 12 other states. The core allegation is straightforward, even if the mechanics are complex: BlackRock, State Street, and Vanguard collectively hold significant ownership stakes in competing US coal producers, firms that together account for nearly half of American coal output.
Rather than letting those coal companies compete freely, the states argue, these asset managers used their outsized influence to coordinate production cuts through ESG-related engagement. The complaint points to an 18-29% decline in coal production and 21-25% price increases between 2019 and 2022 as evidence of the alleged anti-competitive behavior.
The legal theory draws on both the Clayton Act and the Sherman Act, two pillars of federal antitrust law. The DOJ and FTC jointly filed their statement of interest on May 22, 2025, marking the first time federal regulators formally weighed in on common ownership issues in court.
The courtroom battle so far
Federal Judge Jeremy D. Kernodle denied most of the defendants’ motions to dismiss on August 1, 2025, allowing the antitrust claims to proceed to discovery and potentially trial.
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Vanguard settled on February 26, 2026, agreeing to proxy-voting reforms and paying $29.5 million. BlackRock and State Street remain as defendants in the ongoing litigation.
Why this matters beyond coal country
BlackRock, Vanguard, and State Street are often called the “Big Three” of passive investing. Together they are the largest shareholders in roughly 90% of S&P 500 companies. The defendants collectively hold stakes in firms contributing to nearly half of US coal output.
The DOJ’s decision to weigh in suggests that federal enforcers are taking the common ownership theory seriously for the first time. If the case produces a ruling that common ownership combined with active engagement can violate antitrust law, asset managers might need to fundamentally rethink how they engage with portfolio companies, particularly when they own stakes in direct competitors.
Vanguard’s $29.5 million settlement barely registers on its balance sheet. The real cost would come from precedent. A ruling that ESG-motivated engagement by common owners constitutes antitrust coordination would force a wholesale restructuring of how institutional investors interact with the companies they own.