The Federation of Americans for Consumer Choice and several independent insurance agents filed for a preliminary injunction late Tuesday in federal court, seeking to force the Labor Department to delay implementation of its new fiduciary rule.
The filing — the group's second — in U.S. District Court for the Eastern District of Texas argues that Labor's rule will cause too much damage if it goes into effect, so the court needs to delay its implementation until FACC's existing case against Labor's PTE 2020-02 on rollover advice is resolved.
On May 2, FACC and several independent insurance agents were the first to sue Labor, seeking a preliminary injunction "to stop the new rule from taking effect" during FACC's existing case.
FACC's first filing maintained that Labor lacks the authority to promulgate the rule. Industry officials have said that even on a fast track, the lawsuit will take a while.
The new filing requests that the court issue an order "staying the effective date of the 2024 Fiduciary Rule and amendments to PTE 84-24, preliminarily enjoining their enforcement pending a final judgment" in FACC's existing case, or both.
The suit contends that the changes made to PTE 84-24 create "onerous conditions that insurance agents must meet to receive commission compensation if they are deemed fiduciaries" under the new 2024 fiduciary rule.
Lawmakers have also stepped in. On May 15, four senators — three Republicans and one Democrat — introduced a resolution of disapproval under the Congressional Review Act to overturn the rule.
FACC's New Filing
In its new filing, FACC and the plaintiffs assert that Labor is "reimagining" the 50-year-old Employee Retirement Income Security Act "to pursue its own agenda in direct contravention of a decision rendered only six years ago by the United States Court of Appeals for the Fifth Circuit," which struck down Labor's 2016 fiduciary rule.
