As we expected, it has been an interesting week. Here is the latest update regarding the fate of the DOL’s Fiduciary Rule:
On Wednesday, February 8th, the U.S. Justice Department, representing the Labor Department, asked Texas federal trial Judge Barbara M.G. Lynn to postpone issuing her ruling in the case brought by the U.S. Chamber of Commerce and eight other plaintiffs against the DOL’s Fiduciary Rule. Later that same day, the Judge Lynn refused to grant the Justice Department a stay and issued her ruling on the case, upholding the DOL Fiduciary Rule.
While the rulings were a setback for the Trump Administration and opponents of the Rule, a delay of the rule’s April 10 applicability date is still highly likely.
The DOL now needs to find a legal and defensible way to delay the April 10th applicability date. Any decision made by the DOL to delay the Rule under the guidance provided in the recent Presidential Memorandum must be able to stand up to legal challenges that may be filed by the many proponents of the Rule. In such circumstance, a federal judge would need make a determination as to the rationale allowing (or prohibiting) any delay. Also, the fact that three district courts have upheld the rule will likely have to be addressed if the decision to delay is challenged.
In the court documents requesting the stay filed by the DOJ this week, it was proposed that an “initial joint status report would be due on March 10, 2017 to update the court on the department’s actions and address whether a continued stay is warranted.” While this date was tied to the request for stay (that was ultimately denied), it may provide some insight as to when the DOL anticipates it can provide its updated economic and legal analysis related to rule, as requested in the recent Presidential Memorandum to the DOL.
Of course, March 10th is only one month out from the April 10th applicability date of the Rule. Hopefully, we will not have wait until then to hear back from the DOL as to their next course of action.
We hope that these summary updates are helpful. We will continue to provide updates when relevant as this issue progresses.
Call Steve Saltzman at 704-243-4512 for more information or email firstname.lastname@example.org.