Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
The Department of Labor’s fiduciary rule violates the First Amendment by restricting the truthful, commercial speech of financial advisers, the Washington Legal Foundation told a federal appeals court ( Chamber of Commerce v. U.S. Dep’t of Labor , 5th Cir., No. 17-10238, amicus brief filed 5/9/17 ).
The nonprofit law firm is urging the U.S. Court of Appeals for the Fifth Circuit to revive a First Amendment challenge to the DOL’s fiduciary rule, an Obama-era regulation aimed at reducing the allegedly conflicted investment advice given to retirement savers. In February, a federal judge dismissed the First Amendment claims brought by the Chamber of Commerce and others, explaining that the groups waived this claim by failing to raise it during the DOL’s rulemaking process.
The fiduciary rule was scheduled to become applicable on April 10, but the DOL recently pushed that date back to June 9 in response to a memorandum from President Donald Trump ordering a re-evaluation of the rule. Multiple industry groups and companies have filed lawsuits challenging the fiduciary rule from a variety of angles. Every federal judge who has ruled on these cases upheld the rule in its entirety, handing losses to the Chamber and the American Council of Life Insurers, Market Synergy Group and the National Association for Fixed Annuities.
In its friend-of-the-court brief, Washington Legal Foundation said that the federal judge who heard the Chamber’s lawsuit misapplied the law with respect to waiver of claims. The judge’s “unduly harsh approach"—which found the First Amendment claim waived for litigation purposes because it wasn’t raised during the regulatory process—contravened U.S. Supreme Court precedent and “considerations of basic fairness,” the firm said.
Moreover, the fiduciary rule should be subject to heightened judicial scrutiny because it discriminates against speech based on the content and identity of the speaker, the firm said.
The May 9 brief was submitted by Cory L. Andrews and Mark S. Chenoweth of the Washington Legal Foundation.
Thrivent Financial for Lutherans, a fraternal benefit society that is mounting its own challenge to the fiduciary rule, also filed a brief on May 9. The brief takes aim at how the fiduciary rule makes it difficult for financial institutions to use class action waivers, which Thrivent says violates the Federal Arbitration Act.
To contact the reporter on this story: Jacklyn Wille in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
Text of Washington Legal Foundation's brief is at http://www.bloomberglaw.com/public/document/Chamber_of_Commerce_of_the_USA_et_al_v_US_Department_of_Labor_et_/5.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)