The U.S. Chamber of Commerce and industry groups suing the Labor Department over its fiduciary rule in a Texas court filed an emergency request Friday asking a judge to stop the rule from taking effect while they take their case to the U.S. Court of Appeals for the Fifth Circuit.
Judge Barbara M.G. Lynn, in her Feb. 8 decision upholding Labor's fiduciary rule, said Congress "gave DOL broad discretion" to protect retirement investors. But the nine plaintiffs suing Labor over its fiduciary rule in a Texas court — which includes the Securities Industry and Financial Markets Association as well as the Financial Services Institute — appealed Lynn's decision on Feb. 25.
"Absent immediate relief, the fiduciary rule will bring about the most sweeping changes to the retirement savings system since the adoption of the Employee Retirement Income Security Act ("ERISA") — even as the Fifth Circuit Court of Appeals examines whether the rule is lawful and the Department of Labor considers whether to revise or rescind it," Gibson, Dunn & Crutcher partner Eugene Scalia wrote in court papers. "The rule would require a wholesale reordering of the financial-services and insurance industries."
Lynn on Monday told Labor to respond to the groups' Friday request for an injunction pending appeal by March 17. The groups asked that Lynn issue a decision by March 20.
The National Association for Fixed Annuities is also appealing a federal court's denial of NAFA's bid to block the fiduciary rule. Pam Heinrich, NAFA's general legal counsel, told ThinkAdvisor Tuesday that "we are keeping all of our options open at this time, including seeking extraordinary relief."
The Chamber and SIFMA appeal came the same day that Labor's Employee Benefits Security Administration issued a temporary enforcement policy regarding its fiduciary rule.
