DOL Standing by Fiduciary Rule in Court
July 7, 2017 by Joe Morris
The Labor Department has reaffirmed its backing of the fiduciary rule in court, filing papers defending it in the long-running challenge by the U.S. Chamber of Commerce and other plaintiffs.
In the 5th Circuit Court of Appeals brief this week, lawyers from DOL and the Justice Department ask the court to uphold a Dallas federal court judge’s February decision against the plaintiffs.
“Plaintiffs have failed to identify any reason why the fiduciary rule, including its associated exemptions, should be vacated in full,” the filing states.
DOL lawyers had made similar arguments in the same court in April, in opposition to the plaintiffs’ request for an injunction while they pressed their suit.
The Chamber and other plaintiffs are challenging the rule on multiple grounds, including arguing that the DOL lacked the authority to alter its definition of a fiduciary, acted arbitrarily and capriciously in devising the rule, and impinged on First Amendment speech protections.
The 135-page DOL brief makes one concession: Government lawyers, citing a related but separate case pending before the Supreme Court, will no longer push for a provision depriving fiduciaries of the best-interest contract exemption if they enter into arbitration agreements barring investors from filing class actions.
But the brief stressed that the concession does not jeopardize other tenets of the rule or the DOL’s defense of it.
“Severance of the condition would not impair the function of the exemption or of the fiduciary rule in general,” the brief states. “Thus, invalidation of this condition does not mandate invalidation of the remainder of the BIC exemption, let alone the entire fiduciary rule.”
