Case Law Alerts
Fifth Circuit invalidates Department of Labor Fiduciary Rule.
The Chamber of Commerce challenged the Department of Labor’s ERISA Fiduciary Rule, which was promulgated in April 2016 and was scheduled to be implemented in stages through July 2019. The Fiduciary Rule expanded the definition of “investment advice fiduciary” to include certain financial services professionals, such as broker-dealers and insurance agents, who had previously not been subject to the proscribed transaction prohibitions of the ERISA rules. At trial, the United States District Court for the Northern District of Texas dismissed the Chamber’s complaint, holding that the Fiduciary Rule was within the DOL’s administrative authority. In a 2-1 decision, a panel of the United States Court of Appeals for the Fifth Circuit reversed, holding that the Fiduciary Rule was inconsistent with Congressional intent of the ERISA statute and was otherwise an unreasonable exercise of its authority under the Federal Administrative Procedures Act. The Fifth Circuit’s ruling is the latest in a series of legal and administrative challenges to the Fiduciary Rule, which has been under consideration and debate for the past seven years.
Case Law Alerts, 3rd Quarter, July 2018
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