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Dec. 12 — The AARP has long supported the Labor Department’s fiduciary rule, but the group’s latest court filing has a new twist: It specifically praises the way the rule protects a person’s right to bring litigation.
In a proposed amicus brief filed Dec. 9, the AARP and six other groups thoroughly defended how the fiduciary rule discourages investment advisers from forcing clients to sign contracts waiving the right to bring a class action. This provision is just “one among several steps” the federal government has taken to “curb companies’ efforts to shield themselves from class actions through the fine print,” the brief contends ( Thrivent Fin. for Lutherans v. Perez , D. Minn., No. 0:16-cv-03289-SRN-HB, proposed amicus brief filed 12/9/16 ).
The AARP has filed briefs in each of the pending lawsuits challenging the DOL’s fiduciary rule. Unlike the comprehensive briefs filed in Washington, D.C., Texas and Kansas, the AARP’s latest brief focuses specifically on the rule’s class action provision, which critics say violates the Federal Arbitration Act by disfavoring private arbitration as a means to resolve disputes.
The fiduciary rule, which purports to cut down on allegedly conflicted advice given to retirement savers by the financial industry, allows advisers to avoid some of the rule’s most stringent requirements if they refrain from requiring clients to sign class action waivers. Fraternal benefit society Thrivent Financial for Lutherans challenges the legality of this provision, which the society says will force it to lose its “fraternal character” by giving up its signature alternative dispute resolution program.
In defending the fiduciary rule’s class action provision, the AARP cited a recent study on forced arbitration by the Consumer Financial Protection Bureau. According to the AARP, the report found that class action waivers don’t channel claims to a “better, faster, cheaper system of dispute resolution.” Rather, they “suppress claims altogether” and “immunize companies from accountability,” the AARP alleged.
The fiduciary rule, which has survived two legalchallenges in the run-up to its April 2017 applicability date, faces an uncertain future under President-elect Donald Trump. While Trump hasn’t personally commented on the rule, it’s been singled out for repeal by Trump adviser Anthony Scaramucci. Trump’s recent pick for Labor Secretary, fast-food CEO Andrew Puzder, has also remained silent on the rule.
The AARP’s brief—which hasn’t yet been accepted by the court—was filed in the U.S. District Court for the District of Minnesota by Gupta Wessler PLLC and Teske Micko Katz Kitzer & Rochel PLLP. The groups signing onto the AARP brief include: AARP Foundation, the American Association for Justice, Americans for Financial Reform, Better Markets Inc., Consumer Federation of America and the Public Investors Arbitration Bar Association.
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Text of the proposed brief is at http://www.bloomberglaw.com/public/document/Thrivent_Financial_for_Lutherans_v_Perez_et_al_Docket_No_016cv032/1.
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