A legal challenge to a Biden administration rule allowing retirement plans to prioritize environmental, social, and corporate governance policies is set to be one of the first tests of how courts decide lawsuits against federal regulations in the post-Chevron era.
The 5th U.S. Circuit Court of Appeals in New Orleans on Tuesday will hear arguments in a lawsuit brought by 25 Republican-led states that takes aim at a rule from the Department of Labor that lets 401(k) and other retirement plans use ESG factors as a “tiebreaker” to help decide where to invest. The hearing comes just two weeks after the Supreme Court issued a ruling in Loper Bright Enterprises v. Raimondo, which held that courts no longer need to defer to the expertise of federal agencies automatically.
