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The Labor Department Feb. 15 asked a federal judge in Minnesota to stay Thrivent Financial for Lutherans’ challenge to the fiduciary rule ( Thrivent Financial for Lutherans v. Hugler , D. Minn., No. 0:16-cv-03289, letter to request stay 2/15/17 ).
The DOL request comes one week after a federal judge in Texas denied a similar request and issued an 81-page opinion upholding the rule. That same week, the DOL moved to delay the rule’s applicability after President Donald Trump ordered the department to review the regulation, which aims to protect retirement investors from conflicted advice.
Thrivent’s challenge stands out from other cases brought by industry groups because the company doesn’t oppose the whole rule—it just opposes those parts that limit the use of alternative dispute resolution methods, including arbitration. The DOL and Thrivent had filed motions for summary judgment and an oral argument hearing is scheduled for March 3.
Thrivent’s lawsuit concerns one condition of an administrative exemption that isn’t scheduled to become applicable until January 2018, the DOL said in its request. “In light of the potential for change to the rulemaking, there is good cause” to stay proceedings pending the outcome of the department’s review, the DOL said.
In its request, the DOL argued that as part of the department’s review process, Thrivent “may be afforded another opportunity to seek an administrative change to the provision to which it objects.” The department went further and said that it “could act to revise or rescind the challenged provision.”
Thrivent intends to oppose the DOL’s request, a company spokesman told Bloomberg BNA Feb. 16.
If Judge Susan R. Nelson of the U.S. District Court for the District of Minnesota denies the DOL’s request and rules on the parties’ pending motions, she will be the fourth federal judge to rule on the Obama-era fiduciary rule. So far, judges in federal courts in Texas, Washington, D.C. and Kansas have upheld the rule. In December 2016, the U.S. Court of Appeals for the D.C. Circuit refused to block the rule from being enforced.
Cozen O’Connor and Greene Espel PLLP represent Thrivent. The Civil Division of the U.S. Department of Justice represents the DOL.
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