Texas and other Republican-led states allege in federal court in Texas that BlackRock and State Street used coal-company stakes to coordinate output cuts in violation of antitrust law. Vanguard settled for $29.5M in February 2026. On October 30, 2026, the court dismissed the Clayton Act damages claims and the indirect-purchaser claims of every state except Iowa and Nebraska.
Latest development Oct 30, 2026
On October 30, 2026, Judge Jeremy D. Kernodle ruled on BlackRock and State Street’s motion for judgment on the pleadings. He dismissed the Clayton Act damages claims and the indirect-purchaser claims of states other than Iowa and Nebraska. Iowa and Nebraska may continue to pursue indirect-purchaser antitrust claims under their state laws on behalf of electricity consumers.
Why it matters
The case tests the “common ownership” antitrust theory: whether asset managers holding stakes across competing companies can violate antitrust law through coordinated climate engagement. The outcome could affect how BlackRock, State Street, and other passive investors vote and engage with portfolio companies across the economy.
Background
In November 2024, Texas and 10 other Republican-led states filed an antitrust suit in the U.S. District Court for the Eastern District of Texas. The suit named BlackRock, Inc., State Street Corporation, and The Vanguard Group, Inc. as defendants. According to the states, the three firms are the largest shareholders in most major publicly traded U.S. coal producers. The states allege that the firms used those combined stakes to pressure coal companies into coordinated output reductions. They allege that the firms also used their membership in climate initiatives such as the Net Zero Asset Managers alliance and Climate Action 100+ for that purpose.
The states claim violations of the Sherman Act, the Clayton Act, and state antitrust and consumer-protection laws. They contend that the resulting supply constraints drove up electricity prices for consumers. In January 2025, 13 states filed an amended complaint expanding the antitrust and consumer-protection allegations. The asset managers moved to dismiss. They argued that they acted as passive, fiduciary investors, that the states pleaded no plausible agreement among them, and that antitrust law does not reach mere common ownership.
In May 2025, the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ) filed a joint statement of interest. The filing backed the states’ theory that common ownership combined with coordinated engagement can violate the antitrust laws. On August 1, 2025, Judge Jeremy D. Kernodle largely denied the motions to dismiss, allowing the core antitrust conspiracy claims to proceed but dismissing a handful of counts. The states filed a second amended complaint in January 2026, which the asset managers answered. On February 25, 2026, Vanguard settled, agreeing to pay $29.5M, expand an “investor choice” program, and withdraw its U.S. businesses from groups that set climate-related investment or emissions targets.
On February 26, 2026, the court dismissed all claims against Vanguard with prejudice. On March 16, 2026, BlackRock and State Street, the remaining defendants, filed a joint motion for judgment on the pleadings, which the states opposed on April 13, 2026. On September 18, 2026, Bloomberg and other outlets reported that the DOJ is weighing whether to join the states’ suit as a party, which would escalate federal involvement. On October 30, 2026, ruling on that motion, the court dismissed the Clayton Act damages claims and the indirect-purchaser claims of states other than Iowa and Nebraska. Iowa and Nebraska may continue to pursue indirect-purchaser antitrust claims under their state laws on behalf of electricity consumers.
Timeline 12 events
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JudgmentJudge trims claims on motion for judgment on the pleadings
Judge Jeremy Kernodle dismissed Clayton Act damages claims and indirect-purchaser claims by states other than Iowa and Nebraska. He allowed Iowa and Nebraska to continue pursuing indirect-purchaser claims under their own antitrust statutes on behalf of electricity consumers.
Blackrock, State Street must face trimmed US state antitrust claims in coal suitBlackRock, State Street to Face Purchaser Claims in Collusion SuitBlackRock, State Street Get State AG Coal Suit TrimmedANTITRUST—E.D. Tex.: ESG coal antitrust suit trimmed, but Iowa and Nebraska consumer claims survive
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OtherDOJ reportedly weighs joining states’ lawsuit
Bloomberg reported that senior Justice Department officials have discussed formally joining the states’ suit against BlackRock and State Street, which would escalate federal involvement.
DOJ Weighs Joining Texas BlackRock, State Street Antitrust Case
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FilingStates oppose motion for judgment on the pleadings
The plaintiff states filed their response opposing the defendants’ joint motion, according to the district court docket.
State of Texas/Ken Paxton Aty General v. BlackRock, Inc., 6:24-cv-00437 – CourtListener.comTexas v. BlackRock, Inc. - The Climate Litigation Database
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OrderBlackRock and State Street move for judgment on the pleadings
The remaining defendants filed a joint motion for judgment on the pleadings against the states’ second amended complaint.
State of Texas/Ken Paxton Aty General v. BlackRock, Inc. docket
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OrderCourt dismisses all claims against Vanguard
Judge Kernodle dismissed all pending claims against Vanguard with prejudice under the settlement, leaving BlackRock and State Street as defendants.
State of Texas/Ken Paxton Aty General v. BlackRock, Inc. docket
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SettlementVanguard settles for $29.5M
Vanguard agreed to pay $29.5M, expand its investor-choice program, and withdraw from climate-target-setting investor coalitions to resolve the states’ claims.
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FilingStates file second amended complaint
The attorneys general filed a second amended complaint, which the asset managers subsequently answered.
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HearingCourt holds status conference
A transcript of the conference was later filed on the docket.
State of Texas/Ken Paxton Aty General v. BlackRock, Inc. docket
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OrderCourt denies most of asset managers’ motions to dismiss
Judge Kernodle allowed the core Sherman Act and Clayton Act conspiracy claims to proceed while dismissing a small number of counts.
BlackRock, Vanguard, State Street bid to dismiss coal antitrust case fails
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OrderFTC and DOJ file statement of interest backing states
The Federal Trade Commission and the Department of Justice Antitrust Division filed a joint statement of interest arguing the asset managers misapply antitrust law in their defense.
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FilingStates file amended complaint
Thirteen states filed a 110-page amended complaint expanding the antitrust and consumer-protection allegations against the three asset managers.
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FilingTexas leads coalition of states in filing antitrust suit
Texas and 10 other states sued BlackRock, State Street, and Vanguard in the U.S. District Court for the Eastern District of Texas, alleging a conspiracy to restrict coal output.
Attorney General Ken Paxton Sues BlackRock, State Street, and Vanguard
Experimental AI forecast
How it is madeHow will the states’ claims against BlackRock and State Street stand in the district court on December 31, 2028?
- BlackRock and State Street both settle33%
- Still pending on December 31, 202828%
- Court rules for BlackRock, State Street17%
- Split outcome between the two defendants14%
- States win judgment8%
- Resolves by
- Dec 31, 2028in 26 months
- Record confidence
- Low
A settlement by both BlackRock and State Street is the most likely single outcome, at 33%, by December 31, 2028. Vanguard’s $29.5 million settlement shows a workable template, and federal pressure keeps rising. The case may still be pending, at 28%, because the record shows no trial date.
How it resolves. Resolves on the district court docket in No. 6:24-cv-00437-JDK as of December 31, 2028. “Both settle” if claims against both BlackRock and State Street are dismissed under settlements. “Court rules for BlackRock and State Street” if the court enters judgment for both, by summary judgment, verdict, or dismissal of all remaining claims. “States win judgment” if the court enters judgment for the states against at least one defendant and claims against the other are also finally resolved. “Split outcome” if both defendants are out of the case by different routes, such as one settling and one winning judgment. “Still pending” if any claim against either defendant remains unresolved in the district court. Later appeals do not affect resolution.
Reasoning
Starting point. Civil antitrust conspiracy cases in federal court that survive dismissal and proceed into discovery: Most private and government antitrust cases that survive dismissal end in settlement, often 70% or more eventually. Few reach trial, and summary judgment for defendants is common among the rest.
The previous question about the motion for judgment on the pleadings has resolved, so this is a new question and the numbers are not compared. Antitrust cases that survive dismissal usually settle, and the base rate favors settlement over a decision on the merits. Vanguard’s February 2026 settlement shows terms the states will accept, mainly conduct changes and a modest payment. The October 30, 2026, ruling cut the Clayton Act damages claims and most indirect-purchaser claims. That lowers the defendants’ damages exposure and the cost of a deal. Reports that the DOJ may join the case add pressure to settle. Against that, BlackRock and State Street face precedent risk on common ownership and may prefer to test the theory at summary judgment. The record shows no scheduling order or trial date, which keeps the still-pending outcome high. A split outcome, with one defendant settling and the other litigating, is a real alternative. A judgment for the states is a long shot given how rarely such cases reach trial and how novel the theory is.
Vanguard settlement offers a template for conduct-based deals · Narrowed damages exposure after October 30, 2026 ruling · Possible DOJ intervention increases pressure on defendants · Precedent risk on common-ownership theory may deter settlement · No scheduling order or trial date in the record
Previous forecast: missed “How will the court resolve BlackRock and State Street’s March 16, 2026, motion for judgment on the pleadings by June 30, 2027?” (Sep 26, 2026). On October 30, 2026, Judge Kernodle partly granted the motion. He dismissed the Clayton Act damages claims and most states’ indirect-purchaser claims but did not dismiss the remaining federal antitrust claims, so the antitrust core survives. It put “Court trims claims, antitrust core survives” at 17%. Track record
Generated automatically by Claude Opus 5.5 on Nov 7, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made