DOL asks court to pause its appeal of fiduciary rule stay

The Trump administration Department of Labor wants a time out from ongoing lawsuits to decide how to deal with the controversial Retirement Security Rule, its latest fiduciary rule.

The DOL filed a motion Tuesday to pause its appeals from stays granted in a pair of Texas lawsuits. Finalized a year ago by the Biden administration, the RSR is the Labor Department’s latest attempt at imposing a wide-ranging fiduciary duty.

With Donald Trump winning the White House, along with the court victories already won by industry opponent, the RSR is most certainly going to disappear for good.

For now, DOL officials say they “are still in the process of onboarding and familiarizing themselves with all of the issues presented by pending litigation,” reads the request for abeyance filed in the U.S. Court of Appeals for the Fifth Circuit.

“To allow new DOL officials sufficient time to become familiar with the issues in these cases and determine how they wish to proceed, the government respectfully moves to place these consolidated appeals in abeyance, with status reports due at 60-day intervals.”

In its motion, the government notes that none of the plaintiffs oppose the motion to pause the cases.

The two cases against the RSR are: The Federation of Americans for Consumer Choice filed its lawsuit May 2 in the Eastern District of Texas, which was heard by Judge Jeremy Kernodle. The group of trade associations followed with its lawsuit in the Northern District of Texas.

Both cases have been stayed.

The DOL's efforts to apply a fiduciary standard to most all sales of retirement products goes back 15 years.

In a 2018 decision, the Fifth Circuit ruled that the 2016 fiduciary rule put forth by the Obama administration strayed too far from the common-law definition of the term fiduciary, which hinges on the existence of a relationship of “trust and confidence” with the client. The court concluded that agents who merely sell products to their clients do not have this relationship.

Hearing delayed

In related news, a Senate Committee on Health, Education, Labor, and Pensions hearing on Trump's nomination of Lori Chavez-DeRemer to head the Department of Labor was pushed back a week to Feb. 19. A winter storm was blamed for the delay.

Chavez-DeRemer, former congresswoman from Oregan has an interesting history with the issue. As member of the House Committee on Education and the Workforce, she was the only Republican to vote against a Congressional Review Act resolution to strike down the fiduciary rule.

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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]. Follow him on Twitter @INNJohnH.