Three States Continue the Fight to Save DOL’s Fiduciary Rule
Three states aren’t giving up their struggle to save the Department of Labor’s recently vacated fiduciary rule. California, New York and Oregon have appealed to the U.S. Court of Appeals for the Fifth Circuit to revisit its refusal to let them intervene in a lawsuit challenging the rule, which the states had asked for in April as a last-ditch effort to save the Obama-era best-interest investment advice regulation, the Hill writes.
If the Fifth Circuit refuses to reconsider its ruling, the states, led by California Attorney General Xavier Becerra, say they’ll appeal to the full court, according to the publication.
“The Fiduciary Rule is worth fighting for — plain and simple,” Becerra says in a statement cited by the Hill.
In March, the Fifth Circuit vacated the DOL’s fiduciary rule, siding with the U.S. Chamber of Commerce and more than 20 other industry groups who claimed that the rule, which purports to require retirement account advisors to put clients’ interests first and went into partial effect last summer, was an abuse of power by the agency, according to the Hill.
Attorneys general from California, Oregon and New York, along with the AARP, intervened just four days before the April 30 deadline that the DOL had to appeal the Fifth Circuit’s earlier decision to vacate the rule, filing motions to save it. But the Fifth Circuit denied their motions.
Earlier this month the DOL issued a bulletin to its regional directors making it clear that it would not pursue violations of parts of the rule already in effect. Nonetheless, lawyers say the rule is still in effect until the Fifth Circuit issues a mandate to vacate the rule, which is what the states appear to be hoping to prevent.
“The federal government is no longer pursuing this appeal,” the states say in their request cited by the Hill. “Given that posture, the exceptional importance of the issues, and the grave harm the states will suffer as a result of the panel opinion — billions of dollars in lost retirement income to their residents and tens of millions of dollars in lost tax revenue — the states respectfully request that the Court reconsider its decision.”