Fiduciary Rule Won’t Be Blocked by Appeals Court

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

The Labor Department continued its undefeated streak in lawsuits challenging the fiduciary rule on April 5, when a federal appeals court refused to temporarily block the rule pending appeal ( Chamber of Commerce v. U.S. Dep’t of Labor , 5th Cir., No. 17-10238, order denying emergency motions 4/5/17 ).The U.S. Court of Appeals for the Fifth Circuit denied the U.S. Chamber of Commerce’s request for an emergency injunction blocking the Obama-era retirement advice rule. The court’s brief decision included no legal reasoning.

The 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.

The Chamber argued that the fiduciary rule is “contrary to law” and that a 60-day delay isn’t enough to save the financial industry from serious burdens and disruptions.

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. Another case is pending before a federal judge in Minnesota.

In addition to denying the injunction request, the Fifth Circuit also declined the Chamber’s request to expedite the appeal. Judges Edith Brown Clement, Edward C. Prado and Stephen A. Higginson issued the decision.

The DOL represents itself, along with the Department of Justice. The Chamber is represented by Gibson Dunn & Crutcher LLP. The American Council of Life Insurers, which also sought an injunction in this appeal, is represented by WilmerHale.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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