Oklahoma judge halts energy discrimination law, finds it could harm state retiree investments

OKLAHOMA CITY – An Oklahoma County judge has put on hold a law that bans the state from doing business with banks deemed hostile to fossil fuel energy companies.

Former Oklahoma Public Employees Association President Don Keenan filed suit last year alleging the Oklahoma Energy Discrimination Elimination Act of 2022, House Bill 2034, was unconstitutional because it forced state pension systems to drop certain fund managers at a cost to retirees.

Oklahoma County District Court Judge Sheila D. Stinson on Tuesday issued a temporary injunction barring enforcement.

The law became effective Nov. 1, 2022.

The law directs the Oklahoma state treasurer to compile a list of financial companies that boycott energy companies. State Treasurer Todd Russ is the defendant.

“The court finds a substantial likelihood that this stated purpose of countering a ‘political agenda’ is contrary to the retirement system’s constitutionally stated purpose,” the order said. “An attempt by the Treasurer or Board to divest or transfer funds for any purpose other than the benefit of the members or beneficiaries is contrary to and a violation of” the Oklahoma Constitution.

The court ruled that the law contained five separate sections that contained conflicting or vague language as to its exceptions and exemptions.

“As to irreparable harm, the Court finds that divesture or transfer of assets and investments has the potential to affect the financial soundness of investment accounts,” the order said. 

If the OPERS Board reconsiders its decision and follows the Treasurer’s interpretation, the system’s assets could decrease or increase in value and potentially substantially alter the stability of the investment funds prior to a final determination by the Court, the ruling said.

The order said the plaintiff had established a threat of irreparable harm if the act were to be enforced.