Pause Ordered in Fiduciary Litigation Case
The National Association for Fixed Annuities hasn’t had much success thus far in its litigation challenging the Department of Labor’s (DOL) fiduciary regulation — until now.
NAFA’s “win” was persuading the District of Columbia U.S. Circuit Court of Appeals to grant its motion to temporarily suspend the oral argument that was set for Dec. 8. In fairness, NAFA’s motion was unopposed by the DOL — and it was granted because NAFA had said in its motion that many of the same legal issues before the court had been under consideration by the 5th U.S. Circuit Court of Appeals since July 2017 — and that a decision was anticipated shortly. And that, according to NAFA, along with the DOL’s current examination of the impact (and potential revision) of the fiduciary rule, “may obviate the need for this appeal.”
A three-judge panel ordered the case to be temporarily placed on hold pending the ruling from the 5th Circuit.‘Loss’ Leader
In December 2016, NAFA got a terse response to its request for an injunction pending appeal from this same DC Circuit Court of Appeals, which noted at the time that NAFA “has not satisfied the stringent requirements for an injunction pending.” That motion followed NAFA’s request a year ago seeking a motion for a preliminary injunction to prevent the new rules from taking effect “until at least ten months (or as much as two years) following the final disposition of th[e] litigation,” and a motion seeking either an “expedited status conference” or “expedited relief” on NAFA’s renewed motion for a preliminary injunction.
The NAFA lawsuit was not the first one filed against the fiduciary regulation — that “honor” goes to the previously cited case in the 5th Circuit, now three separate suits combined into one.Waiver ‘Ring’
Ironically, that’s also the suit in which the DOL backed off its support of the Best Interest Contract’s (BIC) condition restricting class-action waivers — in the process providing another plaintiff in another case (Thrivent Financial for Lutherans) fuel for its claim. That case came to a close earlier this month when Judge Susan Nelson of the U.S. District Court for the District of Minnesota granted Thrivent’s motion for a preliminary injunction — but also granted the DOL’s request to temporarily halt the proceedings. Nelson explained that halting the case would allow the administrative process to fully develop, possibly resolving the dispute in a more economical and efficient way.