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A conservative-backed lawsuit challenging three New York City employee pension funds over their decision to sell billions of dollars in fossil fuel investments has been thrown out by a state court judge.
The ruling, which was made public on Wednesday, held that the city employees who sued, and the advocacy group that backed them, could not challenge the divestment decision because they had not suffered any direct harm.
The case, filed in 2022, is part of a flurry of litigation about socially conscious investing.
While liberal lawyers have sought to force pension funds to take action to stop climate change, the New York case was one of the first to try to stop or reverse such actions. It has been closely watched, in part because it was brought by a legal team headed by Eugene Scalia, a leading conservative attorney and son of late US Supreme Court justice Antonin Scalia.
The New York City pension funds, which cover most municipal employees as well as teachers and school administrators, announced in late 2021 that they had sold more than $3bn of shares in publicly traded fossil fuel companies.
Because Wayne Wong and the other plaintiffs were entitled to fixed monthly benefits, their claims to have been hurt by the divestment because it would make it harder for the funds to meet their obligations were “speculative”, Justice Andrea Masley found.
“Plaintiffs here have not, and will not, suffer any monetary losses based upon defendants’ investment decisions,” she wrote.
New York City Comptroller Brad Lander, who serves as trustee and investment adviser of the funds, called the decision “a big win for common sense responsible investing, for New York City’s municipal workers and retirees, and for the future of our City and our planet”.
Lawyers for the employees and the interest group that backed the lawsuit, Americans for Fair Treatment, said in a statement that they were “reviewing the court’s decision and evaluating potential next steps”.
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