As expected, plaintiffs in a Texas lawsuit challenging the Department of Labor's investment advice rule filed a new brief Thursday reminding the court that the Biden administration is walking away from a similar lawsuit in Florida.
Judge Virginia M. Hernandez Covington sided with the ASA in a February ruling striking down a portion of guidance the DOL issued in 2021 that expanded the definition of a retirement plan fiduciary. The judge ruled that a portion of the department’s frequently-asked-questions guidance illegally widened its regulatory lane, and failed to comply with the agency’s own regulations.
The Federation of Americans for Consumer Choice, joined by a number of independent insurance agents and agencies, is making similar claims in its lawsuit against the DOL in Dallas federal court.
Naturally, FACC took note of the government abandoning its Florida appeal.
"The DOL’s decision not to appeal the ASA Order nullifying and vacating this central feature of the New Interpretation underscores that the DOL’s attempted reimagining of the five-part test is simply unworkable and further supports the relief requested by Plaintiffs in this case," the brief filed today reads.
The guidance was issued as part of the Trump administration's investment advice rule that took effect in February 2022. Included in the rule was a new prohibited transaction exemption allowing advisors to provide conflicted advice for commissions; and a reinstatement of the "five-part test" to determine what constitutes investment advice.
FACC filed the new brief as a supplement to its previous request for summary judgment.
InsuranceNewsNet Senior Editor John Hilton 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.