A federal appeals court Tuesday upheld a lower-court decision to dismiss a lawsuit by Florida advisers who claimed the Certified Financial Planner Board of Standards Inc. unfairly punished them for describing their compensation as fee-only.
The U.S. Court of Appeals for the District of Columbia affirmed the summary judgment in favor of the CFP Board that was handed down last year by the D.C. District Court.
The case was brought against the organization by Florida planners Jeffrey and Kimberly Camarda, who sued the CFP Board for breach of contract and unfair competition over a disciplinary case that centered on their improper use of the term “fee-only” under CFP rules.
In their appeal, the Camardas also asserted that they had been singled out for enforcement while other planners also were flouting CFP restrictions on the compensation label.
The three judges who heard the appeal — Circuit judges Sree Srinivasan and Robert Wilkins and Senior Circuit Judge Laurence Silberman — issued their ruling without a published opinion.
The CFP Board said the ruling reinforces its authority to make CFP mark holders adhere to its conduct requirements.
“The court's decision vindicates CFP Board's ability to enforce its standards through a fair, transparent, peer-review process, ensuring benefits and protections for the public and CFP professionals now and for years to come,” the CFP Board said in a statement.
The Camardas could not be reached for comment.
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judgment written on behalf of the court by Clerk Mark J. Langer said the appellate judges agreed with the lower court that the CFP Board had not breached the designation's contract.
They also did not accept the Camardas' argument that the CFP Board used “selective enforcement” against them.
“After reviewing the record and appellants' allegations, there is insufficient evidence in the record to support the legal conclusion that any of the CFP Board's rules or disciplinary procedures were breached by the CFP Board,” Mr. Langer wrote. “[T]he record shows that the CFP Board followed its disciplinary procedures and therefore did not violate the implied duty of good faith or fair dealing.”
The judgment went on to say the Camardas did not cite “any record evidence that a perfect process would have led to a different outcome.”
The fee-only designation is coveted by financial advisers because it is widely believed to imply a high standard of care for clients. The Camardas' case is one of several controversies over the fee-only description that have embroiled the CFP Board since 2012.
