One year ago today, the first lawsuit was filed against the Department of Labor fiduciary rule.
The intervening 365 days has seen just about nothing go according to expectation on this issue. As a reporter tracking the story, it’s been great.
I’ve written stories on my phone while riding the District of Columbia metro during rush hour. And I’ve been foiled by the Central Time Zone in Dallas (when arriving way early to a hearing turned into arriving slightly late).
Even that turned into a strong experience as I got to sit in the front row next to Phyllis Borzi, assistant labor secretary under former President Barack Obama. She is considered the godmother of the fiduciary rule.
At that time, Donald J. Trump had just completed his miraculous Election Day upset. My lucky seating arrangement enabled me to question Borzi on whether she feared the rule would be unraveled.
She demurred and focused on gathering up her belongings. But the mood of the DOL team in the courtroom that mid-November day was decidedly gloomy.
After all, everyone considered the rule as dead as a day-old mayfly. The morning following the election, Democratic strategist Michael Lewan told me the fiduciary rule would go “very quickly.”
Except it didn’t. Surprisingly, a Republican president teamed with GOP control of Congress could not kill the rule – not yet anyway.
The reasons are numerous. Trump faltered out of the gate by nominating fast food CEO Andrew Puzder to be secretary of labor. Puzder’s baggage was so great, he ended up withdrawing in mid-February.
That became a major problem for the administration. Labor Secretary Alexander Acosta wasn’t confirmed and sworn in until April 28 -- in other words, much too late to direct the dismantling of the fiduciary rule.
A Mistake to Sue?
Back to the lawsuits. That initial Dallas lawsuit was filed June 1, 2016, by nine groups led by the U.S. Chamber of Commerce. It was quickly followed by a suit filed in District of Columbia federal court. Other challenges were filed in Kansas and Minnesota.
Optimism was high as plaintiffs hired several of the top labor lawyers in the country. Yet the government remains four for four in defending the DOL rule.
In hindsight, the court route can be seen as a mistake. I’ve written stories about how it established a record of court rulings in favor of the rule.
But I also talked to an analyst recently who said the lawsuits were an important step to establish how serious the industry is about fighting the rule. It helped rally opponents, and framed the arguments for the record, he added.
The fiduciary rule is slated to start taking effect next Friday. If you’re in any way resigned about that, just remember that very little has gone according to the script so far.
To recap: the rule was supposed to get kneecapped, then it was supposed to sail through, then it was supposed to get kneecapped. Now, as I look ahead to future stories, I can’t help think one thought:
I wonder what will happen tomorrow?
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@example.com.
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