A group of plaintiffs led by the U.S. Chamber of Commerce are appealing a Texas decision upholding the Department of Labor fiduciary rule.
Judge Barbara M.G. Lynn awarded a summary judgment to the DOL on Feb. 8, the third court to side to the government on the controversial rule.
"We remain confident in the merits and strength of our case and stand by our assertion that the Department of Labor exceeded its authority," the plaintiffs, which include the Insured Retirement Institute, the American Council of Life Insurers and the Financial Services Institute, said in a joint statement.
“This is a misguided rule that will harm retirement savers and financial services firms that provide needed assistance and options to their clients, including modest savers and small business employees,” the statement read. “Further the ‘private right of action’ mechanism creates unwarranted litigation risk for financial advisors, who will face the threat of meritless class action lawsuits challenging their every move.”
The case will now move to the U.S. Court of Appeals for the Fifth Circuit. Eugene Scalia, son of the late Supreme Court Justice Antonin Scalia, is lead attorney for the nine plaintiffs.
Congress "gave the DOL broad discretion to use its expertise and to weigh policy concerns when deciding how best to protect retirement investors," wrote Judge Lynn in an 81-page ruling from the Northern District of Texas.
Two days after Lynn’s ruling, the DOL filed a notice with the Office of Management and Budget to delay implementation of its fiduciary rule. The OMB continues to hold meetings on that request.
Earlier lawsuits opposing the DOL rule were unsuccessful in Washington, D.C. and Kansas federal courts. Appeals by plaintiffs in both cases were also unsuccessful.
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]
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