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The U.S. Chamber of Commerce couldn’t convince a federal judge to temporarily block the Labor Department’s fiduciary rule while an appeals court hears a legal challenge to the regulation ( Chamber of Commerce v. Hugler , 2017 BL 87076, N.D. Tex., No. 3:16-cv-01476-M, 3/20/17 ).
Denying the Chamber’s request for an emergency injunction, the judge said on March 20 that the organization’s arguments against the rule already were rejected as unpersuasive. Further, indications from the DOL and the White House about the rule’s future suggest that an injunction is unnecessary, the judge said.
The fiduciary rule, which was promulgated by the Obama administration in an attempt to reduce the allegedly conflicted investment advice given to retirement savers, was scheduled to become applicable on April 10. President Donald Trump’s Labor Department proposed extending the deadline to June 9 in response to a presidential memorandum ordering a re-evaluation of the rule. On March 10—the same day the Chamber requested an emergency injunction in this case—the DOL issued a field assistance bulletin promising not to enforce the fiduciary rule during any “gap” period that may arise in the course of re-evaluating the rule.
In refusing to issue an injunction, Chief Judge Barbara M.G. Lynn of the U.S. District Court for the Northern District of Texas pointed out that most of the challenged aspects of the fiduciary rule aren’t scheduled to go into effect until 2018, which Lynn said undercuts the Chamber’s argument that an emergency injunction is necessary.
Further, granting an injunction would interfere with the department’s “statutory authority, its expertise, and its policy-making role,” Lynn said.
Multiple industry groups and companies have filed lawsuits challenging the fiduciary rule from a variety of angles. Every federal judge to have ruled on these cases has upheld the rule in its entirety, handing losses to the Chamber and ACLI, Market Synergy Group and the National Association for Fixed Annuities. Another case is pending before a federal judge in Minnesota.
Gibson Dunn & Crutcher LLP represents the Chamber. Wilmer Cutler Pickering Hale & Dorr LLP and Thompson Coe Cousins & Irons LLP represent the American Council of Life Insurers, which also requested an emergency injunction in this case. The Department of Justice is defending the DOL rule.
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Text of the decision is at http://www.bloomberglaw.com/public/document/Chamber_of_Commerce_of_US_v_Hugler_No_316cv1476M_Consolidated_wit.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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