Court Keeps Iowa and Nebraska Claims in Coal Lawsuit Against BlackRock and State Street
Key Facts
A federal judge in Texas kept claims by Iowa and Nebraska on behalf of indirect electricity buyers in an antitrust lawsuit accusing BlackRock and State Street of pressuring coal producers to cut output. The decision is limited to the claims it allowed to proceed and does not establish that the companies violated the law. The judge, by contrast, dismissed coal buyers’ claims for damages under federal law, as well as indirect buyers’ claims brought by other states or based on federal law. The judge also dismissed the antitrust penalty under Iowa law. The lawsuit alleges that reduced coal output led to higher electricity prices, but those allegations have not yet been resolved.
The case began in late November 2024, when the states alleged that asset managers used their market influence and membership in climate groups to pressure coal producers to reduce output. The dispute centers on whether holding stakes in competing companies while also advocating on production harmed competition and electricity buyers. The scope of the ruling reflects a distinction between states’ claims under their own laws on behalf of indirect electricity buyers and federal or other claims that the decision did not allow to proceed. This narrowed the groups covered by the dispute, while Iowa and Nebraska’s allegations concerning indirect buyers remain. Those allegations remain the subject of litigation and are not a final judicial finding on the companies’ liability.
The Justice Department and the Federal Trade Commission entered the debate on May 22, 2025, by filing a joint statement of interest concerning the use of common stock ownership to press for lower coal output. The agencies said that safe harbors tied to passive investment do not cover using common stock holdings in competing companies to encourage market-wide production cuts. In the same statement, the assistant attorney general for antitrust said, "American consumers are harmed when institutional asset managers use their stakes in competing companies to coordinate production cuts." The agencies presented their position in the context of the states’ allegations; their statement was not a ruling that those allegations had been proven. Bloomberg Law reported in September 2026 that the Justice Department was considering joining the case, with no final decision made at the time.
The ruling followed a settlement with Vanguard that ended part of the multistate lawsuit. On February 26, 2026, Iowa’s attorney general said the company had agreed to enable investors to vote their shares and to pay 29.5 million dollars to the states. The attorney general presented the agreement as a step to protect American energy and reduce consumer costs. After the settlement, she said the states would keep their focus on BlackRock and State Street. She said, "We will now turn our attention to BlackRock and State Street, and continue fighting for truly competitive markets."
BlackRock rejected the allegations, saying the case seeks to rewrite antitrust law and rests on an "unreasonable" theory. The company also described the lawsuit as "without basis and without merit." State Street referred to an earlier statement that described the lawsuit as "without basis and without merit." The responses address the states’ allegations that investment influence was used to affect coal production decisions. The dispute over those allegations remains open as part of the case continues in court.
The trial is currently scheduled to take place in Texas in January 2028, according to Bloomberg Law. Until then, Iowa and Nebraska’s claims concerning indirect electricity buyers will remain central to the part of the case the ruling allowed to proceed. The decision dismissed federal damages claims by coal buyers and indirect buyers’ claims brought by other states or under federal law. In EL7 data, BlackRock shares closed at 1147.54 dollars on October 30, 2026. State Street shares closed at 169.77 dollars on the same day.