Various states, corporations, trade associations, and individuals sued the US Department of Labor (DOL), asserting that DOL's rules allowing retirement plan managers to consider "factors that are not material to financial performance" violate federal law.
District Court employed
Chevron
Deference
The district (trial level) court determined that DOL was within its
discretion to allow plan managers to consider "environmental,
social, or governance" (ESG) factors when deciding between two
investments that "equally serve the financial interests of the
plan." In upholding DOL's rules, the district court held
that DOL's interpretation of the relevant federal statute was
entitled to Chevron deference.
Intervening End of
ChevronDeference
Those challenging DOL's rules appealed. While the appeal was
pending, the US Supreme Court ended Chevron deference; the
5th Circuit did not make a substantive ruling but sent the case
back to the district court with instructions that it reconsider
without applying Chevron deference.
Judicial Humility
The 5th Circuit could have decided the case; as the opinion noted,
the parties seemed to have expected the death of Chevron.
DOL "presciently disclaimed reliance on Chevron in
its briefing," and both sides argued that the statute
supported their position without any notion of deference.
"Judicial humility" and "the appellate process" encourage the 5th Circuit to send most cases back to the district court to consider intervening Supreme Court decisions; it did so in this case.
To see the opinion 23-11097-CV0.pdf (uscourts.gov)
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