A lawsuit by broker-dealer reps suing Ohio National entities over their decision to stop paying trail commissions on certain variable annuities products may have been thrown out of court -- but it’s not the end of their legal battle.

As reported, Judge Susan Dlott of the United States District Court for the Southern District of Ohio dismissed the lawsuits filed by LPL Financial rep Lance Browning and Triad Advisors rep Stephen Cook, ruling that individuals had no standing to sue Ohio National as the selling agreement was executed between the insurer and the broker-dealer firms.

A little over a week since that order, lawyers in the Cook case challenged it before the U.S. Court of Appeals for the Sixth Circuit.

“We were disappointed with the court’s ruling. With that being said, we do intend to present an appeal of the decision to the Sixth Circuit,” B. Nathaniel Garrett of Helmer, Martins, Rice & Popham, who is representing Cook told FA-IQ in an interview prior to the appeal.

An appeal is something that Browning’s lawyers are also considering.

“We’re disappointed in the judge’s decision. It was contrary to the to the magistrate’s report that came out of the same court. That said, we’re looking at all of our options and in addition to an appeal of this order, I’m confident that we’ll get our day in court for these guys,” says Dennis Concilla, Ohio-based head of the securities litigation and regulation practice group at law firm Carlile, Patchen & Murphy, who represents Browning.

So far, broker-dealer firms have had more luck against Ohio National compared to reps suing the insurer on their own. When asked if aligning with a broker-dealer firm’s lawsuit is an option, Concilla said it was.

“It is an option, and we’re going to be talking to the firms whose brokers we represent about that very thing. But it’s a little too early to say what direction we’ll go,” says Concilla.

Presently neither LPL Financial nor Triad have ongoing lawsuits against Ohio National in the trails matter.

Browning’s case was filed as a class action complaint against four Ohio National entities in November last year. In January 2019, that complaint was amended such that it was no longer a class action lawsuit but a case by Browning individually and on behalf of ‘similarly situated’ LPL advisors. Cook filed for his class action against the same Ohio National defendants in January this year as well.

Relief could also come from the outcomes of the other litigation against Ohio National that is currently underway across the country. Lawyers for the reps are keeping a close eye on how the other cases progress as well.

One example is a proposed class action lawsuit by Arkansas-based broker-dealer Veritas Independent Partners.

“Perhaps there is a chance if the Veritas case proceeds through discovery, and then ultimately is certified as a class action, which it has not been certified yet, then, perhaps they could seek some relief, that could end up going to the representatives, and could go to our clients. So obviously, we are keeping an eye on that,” says Garrett.

Also, the dismissal of the Browning and Cook cases does not mean the end of all rep litigation against Ohio National. The legal battle for trails is ongoing for five broker-dealer reps before the U.S. District Court for the Middle District of Alabama, Dothan Division.

ProEquities rep Ansley "Trip" Whatley, LPL rep (formerly of Raymond James) Susan Moore, Securities America advisor Tracy Lentz, NEXT Financial’s Keith Bowers and LPL FA Chris Noone all sued Ohio National in November last year as well.


So far, one case has gone in favor of the reps and one against. In April 2019, a federal court ruling in Massachusetts ruled that Commonwealth Equity Services advisor Margaret Benison had the right to compel arbitration against Ohio National for stopping trails for variable annuities. With the current Ohio Judge’s ruling against the reps, all eyes are now on the ruling that comes out of the Alabama federal court.

“We’re also continuing to keep our eye on [that] because there’s an opportunity for the court there to reach a decision that is different than the decision that Judge Dlott has reached,” says Garrett.

Ohio National, too, knows this well -- which may be why the insurer filed the Ohio Judge’s ruling dismissing the Browning and Cook cases in support of its arguments before the Alabama court earlier this week.