Litigation schedule set for suits against DOL fiduciary rule

Financial industry trade groups and the Department of Labor have agreed to a litigation schedule that could render a decision in October on several lawsuits seeking to stop an investment advice regulation. The plaintiffs and the DOL are seeking summary judgment for the cases in a Dallas federal court. Briefs would be filed at various dates in July, August, September and into the middle of October. “The parties agree that the cases should be decided expeditiously on cross-motions for summary judgment without discovery or any other evidentiary proceedings,” a June 24 joint motion states. The plaintiffs' opinion continued: “There is good cause for the expeditious resolution of this litigation. Among other things, plaintiffs and/or many of their members will incur significant costs and challenges in endeavoring to comply with the Department's rulemaking by April 2017 (the applicability date for most provisions of the rule).” (More: Everything you need to know about the DOL fiduciary rule as it develops) Chief Judge Barbara M.G. Lynn has not yet ruled on the motion. In a separate order on June 21, Ms. Lynn consolidated three suits that were filed in the U.S. District Court for the Northern District of Texas. One of them involves nine co-plaintiffs, including the Securities Industry and Financial Markets Association, the Financial Services Institute and the U.S. Chamber of Commerce. Another one was filed by the American Council of Life Insurers and the National Association of Insurance and Financial Advisors. A third was filed by the Indexed Annuity Leadership Council. Two other suits are also in the court system. One was filed in the Washington, D.C., federal court by the National Association of Fixed Annuities. The other was filed in the Kansas district court by Market Synergy Group. A hearing on summary judgment in the NAFA litigation has been set for Aug. 25. Each of the suits aims to kill the DOL rule, which was finalized in April and requires financial advisers to act in the best interests of their clients in retirement accounts. The plaintiffs argue the rule would significantly raise regulatory costs and legal risks for financial advisers and make advice too expensive for investors with modest assets. The Obama administration asserts that the rule will protect workers and retirees from conflicted advice that results in the sale of high-fee investments that erode savings. In a June 22 appearance at the National Press Club in Washington, Labor Secretary Thomas Perez expressed confidence that the regulation will withstand the court challenges. (Correction: An earlier version of this story incorrectly stated that Judge Lynn had already granted the joint motion.)