Waiting On An Opinion

By John Hilton

I’ve suggested from the beginning that perhaps Judge Randolph D. Moss might not want to issue a quick decision in the National Association for Fixed Annuities vs. Department of Labor lawsuit.

Why? Because there were three other lawsuits to stop the DOL fiduciary rule in three other federal courts nationwide. A fourth lawsuit has since been filed in U.S. District Court of Minnesota.

Moss presided over the initial hearing of the lawsuits on Aug. 25. I recall a very warm day as I rode the Washington Metro 15 stops to Judiciary Square just a few blocks from the U.S. Capitol.

It seems so long ago that we sat shoulder-to-shoulder through a three-hour hearing. Because it was.

Since then, Mother Theresa was canonized, we endured three debates between Hillary Clinton and Donald Trump, and the Cubs made the World Series.

And 68 days have passed.

I’ve talked to several people, some connected with the case and some not. One person in particular said he expected a relatively quick decision, as least by the end of September.

Yet we wait. Moss covered a lot of ground for sure. As I reported at the time, he opened the hearing “with 90 minutes of tough questioning.”

Still, I also reported that Moss spent plenty of time informing NAFA attorney Philip D. Bartz just where he stood on certain key issues. Take their exchange over whether the DOL can create a private right of action. This is a key point in three of the lawsuits. And Moss did not seem conflicted about it:

Like other lawsuits, NAFA also argues that ERISA authors never intended to allow regulators to create a new private right of action. Only Congress has that power, the lawsuit stated, citing the Alexander vs. Sandoval as case precedent.

"Congress never intended the department to speak so broadly," Bartz said.

Again, Moss had a different interpretation of the law.

"I read Sandoval differently," he told Bartz.

This was similar to several other exchanges. The judge actually was surprisingly knowledgeable on the financial services industry and the nuances related to the regulation.

So why no ruling?

My theory, which has admittedly been poo pooed by everyone from INN colleagues to the best ERISA lawyers, is Moss is hesitant to rule until all the relevant cases have been heard.

The third and final of the original lawsuits will be heard Nov. 17 in a Dallas federal court. The second case was heard Sept. 21 in a U.S. District Court in Kansas. All three make similar claims that the DOL acted “arbitrary and capricious” and overstepped its authority with the fiduciary rule.

The Minnesota case – Thrivent Financial vs. Department of Labor – takes a different route in challenging the DOL’s class-action provision.

I have been assured there is no judicial protocol on this, but it has always felt counterproductive for Moss to rule until all the similar cases have been heard.

Seems a ruling prior to that hearing could possibly influence the judge in the case.

If not that, then Moss is being extra careful to get his ruling right. An appeal is all but certain no matter how he rules.

So we wait.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].