Ed. Note: This article first appeared in BNA
The DOL is fighting back against the U.S. Chamber of Commerce’s bid to have the fiduciary rule paused by an appeals court ( Chamber of Commerce v. U.S. Dep’t of Labor , 5th Cir., No. 17-10238, response to emergency injunction motion filed 3/29/17 ).
The department has “broad authority to classify individuals as ‘fiduciaries’ and to regulate their conduct accordingly,” the DOL said in court papers filed March 29 with the U.S. Court of Appeals for the Fifth Circuit.
The Chamber’s claim that it will be harmed if the court doesn’t act to pause the fiduciary rule is implausible given the DOL’s recent actions placing the rule’s future in question, the department argued.
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 Trump’s Labor Department proposed extending the deadline to June 9 in response to a presidential memorandum ordering a re-evaluation of the rule, and the DOL issued a field assistance bulletin promising not to enforce the rule during any ensuing “gap” period.
Threefederaljudges have upheld the rule in the face of recent legal challenges.
In its filing with the Fifth Circuit, the DOL said that none of the Chamber’s arguments against the fiduciary rule were likely to succeed on appeal. Those arguments were correctly rejected by the district judge who heard the case, the DOL argued.
Further, “Every court to consider the legality of the fiduciary rule has upheld it,” the department contended.
Moreover, the DOL disputed the notion that the Chamber and other litigants would be significantly harmed if the rule were delayed only 60 days. On that point, the DOL said that a “meaningful delay” of portions of the rule beyond 60 days remains a “realistic possibility.”
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 is also seeking an injunction in this appeal, is represented by WilmerHale.
Posted by: The Trust Advisor