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DC Circuit Dismisses NAFA Appeal of the Fiduciary Rule

The U.S. Court of Appeals for the District of Columbia Circuit has officially dismissed the National Association for Fixed Annuities’ appeal of a lower court decision upholding the Labor Department’s fiduciary rule.

In March, NAFA and the Labor Department agreed to a voluntary dismissal of the appeal, after the 5th Circuit Court of Appeals issued a decision vacating the fiduciary rule.

By officially dismissing the appeal, the DC Circuit has put to rest speculation that the court would retain jurisdiction over the case in spite of the parties’ agreement to voluntary dismiss the appeal.

In November of 2016, the District Court in the D.C. Circuit issued a sweeping ruling upholding the Labor Department’s authority to amend the definition of fiduciary and regulate IRAs under the Employee Retirement Income Security Act.

That decision, written by Judge Randolph Moss, was a major victory for proponents of the fiduciary rule. Judge Moss soon after refused NAFA’s request to delay the implementation of the rule, on the grounds that NAFA was unlikely to have the district court decision overturned on appeal.

But in November in 2017, NAFA successfully petitioned the D.C. Circuit to delay the hearing in the appellate court until after the 5th Circuit issued its decision.

That ruling may ultimately be regarded as the sine qua non in the efforts of industry stakeholders to defeat the rule through the courts. Had the D.C. Circuit heard the case as scheduled, it is widely believed the panel would have upheld the lower court’s decision.

That would have created a circuit split between the D.C. Circuit and the 5th Circuit, increasing the likelihood of a review of the case before the Supreme Court.

Now, the question for the Trump administration’s Labor Department is whether it will continue to defend a rule promulgated under the Obama administration.

The Labor Department has until April 30 to request a rehearing in the 5th Circuit Court of Appeals, and until June 13 to petition the Supreme Court to review the case.

 

Source: BenefitsPro, by, Nick Thornton

Posted in: Uncategorized

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