Pilot Files Amended Complaint over Retirement Plan’s ESG Policy Decisions
August 25, 2023 | Spence v. American Airlines Inc., No. 4:23-cv-00552 (N.D. Tex.).
A pilot filed an amended proposed class action complaint against American Airlines alleging that the defendant breached its fiduciary duties in violation of ERISA by managing its 401(k) plan for pilots with investment options that consider ESG policy goals. The plaintiff alleges that the majority of his plan portfolio is managed by a publicly traded investment management firm that has joined Climate Action 100+ and has advocated for ESG and sustainable investing. The plaintiff brings claims for breach of the duties of loyalty and prudence and to monitor fiduciaries, and seeks a declaratory judgment that American Airlines has violated ERISA, a permanent injunction, and attorneys’ fees and costs.
Consumers Voluntarily Dismiss Two Proposed Class Actions for Allegedly False Marketing of Consumer Goods’ Sustainability
August 14, 2023 | Dougherty v. Kohl’s Inc., No. 2:23-cv-00456 (E.D. Wisc.). June 22, 2023 | Charles v. Church & Dwight Co. Inc., No. 1:23-cv-02528 (E.D.N.Y.).
Plaintiff consumers voluntarily dismissed two separate proposed class actions advancing claims of unjust and deceptive practices, unjust enrichment, fraud, and breach of express warranty, among others, for alleged misrepresentations and “greenwashing” in marketing of certain consumer products. (1) On August 14, 2023, a consumer voluntarily dismissed a proposed class action filed against Kohl’s Inc. for alleged misrepresentations of bedsheets being made from environmentally friendly bamboo fibers; (2) on June 22, 2023, a consumer voluntarily dismissed with prejudice a proposed class action filed against manufacturing company Church & Dwight Co. Inc. alleging “greenwashing” and misrepresentation in marketing laundry detergent as environmentally friendly.
Consumer Files Consumer Fraud Proposed Class Action for Supermarket’s Labeling of Eggs
May 3, 2023 | Long v. The Kroger Co., No. 1:23-cv-01179 (C.D. Ill.).
A customer filed a proposed class action complaint against The Kroger Co. in the Central District of Illinois claiming that labeling of eggs as “farm fresh” and “Grade A” allegedly misled consumers to believe the eggs were from hens not confined in cages. The plaintiff brought claims under the Illinois Consumer Fraud and Deceptive Business Practices Act and state consumer fraud acts, as well as claims for breach of express warranty, implied warranty, negligent misrepresentation, fraud, and unjust enrichment. The plaintiff also contended that in allegedly misleading customers that its eggs are cage-free, Kroger reneged on its ESG and sustainability commitments to animal welfare.
Four States Petition for Review of New SEC Rule
February 22, 2023 | Texas v. Securities and Exchange Commission, No. 23-60079 (5th Cir.). February 24, 2023 | Press Release, Paxton Sues Biden Administration to Terminate Illegal SEC Rule That Will Hurt Financial Companies and Their Investors, Texas Office of the Attorney General.
Texas, Louisiana, Utah, and West Virginia filed a petition in the Fifth Circuit Court of Appeals petitioning the court to review and set aside the Securities and Exchange Commission’s Final Rule, Enhanced Reporting of Proxy Votes by Registered Management Investment Companies; Reporting of Executive Compensation Votes by Institutional Investment Managers. The Texas attorney general published a press release highlighting the petition and asserting that the SEC rule amends the proxy vote reporting form, Form N-PX, to expand the number of voting categories in order to further the political agenda of the Biden Administration. The press release also claimed that the new rule would increase compliance costs and pressure funds to take actions that run contrary to the best interests of their investors.
Class Action Alleges Banks Assisted FTX Despite Knowledge of Fund Misappropriation
February 22, 2023 | O’Keefe v. Sequoia Capital Operations LLC, et al., No. 1:23-cv-20700 (S.D. Fla.).
The plaintiffs filed a class action in the Southern District of Florida alleging that the defendants, which include banks, venture capital firms, accounting firms, and a California-based law firm, conspired with FTX to perpetrate fraud by, among other things, performing sham audits of FTX’s primary entities, certifying that efficient controls were in place, and providing non-routine, high-risk banking services to FTX and promoting FTX despite knowing that it was misappropriating funds. Lawsuit Challenges ERISA Rule Permitting ESG Investing
February 21, 2023 | Braun v. Walsh, No. 2:23-cv-00234 (E.D. Wis.).
Two 401-K plan participants filed a complaint in the Eastern District of Wisconsin challenging the U.S. Department of Labor’s final rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, and seeking a preliminary and permanent injunction. The complaint alleges that the new rule violates ERISA and exceeds the authority granted to the Secretary of Labor by permitting and encouraging plan administrators to consider ESG factors when making investments on behalf of plan beneficiaries.
Twenty-Six States Challenge Department of Labor ERISA Rule Allowing Consideration of ESG Factors in Investing
February 28, 2023 | State of Utah, et al. v. Walsh and United States Department of Labor, No. 2:23-cv-16-00016 (N.D. Tex.).
Twenty-six states along with five private plaintiffs, including a publicly traded energy company and a nonprofit trade association, filed a complaint in the Northern District of Texas challenging Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, the final rule promulgated by the Department of Labor published on December 1, 2022. The complaint alleges that the rule undermines protections for retirement savings by allowing consideration of ESG factors, oversteps the Department of Labor’s authority under ERISA, and is arbitrary and capricious.
Investors Sue For-Profit Humanitarian Organization Alleging Misrepresentations of Sustainability and Financial Health of Organization
January 17, 2023 | Bhatia, et al. v. Thome, et al., No. 23STCV00999 (Cal. Sup. Ct., Central District of L.A.)
Equity investors in a company called TBSL filed a complaint in the Superior Court of California alleging that the defendants convinced investors to invest in TBSL by fraudulently holding itself out as a for-profit humanitarian organization and assuring investors that TBSL was a sustainable business dedicated to serving humanitarian efforts to end child hunger.
Proposed Class Actions Filed Against Deutsche Bank and JP Morgan Chase & Co. over Alleged Connections to Jeffrey Epstein
November 24, 2022 |Doe v. Deutsche Bank, et al., No. 1:22-cv-10018 (S.D.N.Y. 2022) and Doe v. JP Morgan Chase & Co., No. 1:22-cv-10019 (S.D.N.Y. 2022).
Two proposed class actions were filed in the Southern District of New York against Deutsche Bank and JP Morgan Chase & Co. alleging that the defendants financially benefited from participating in Jeffrey Epstein’s sex trafficking operations. Specifically, the plaintiffs allege violations of federal sex trafficking statutes and the Racketeer Influenced and Corrupt Organizations Act (RICO).