Last Thursday, a hearing on a motion for preliminary injunction and summary judgment was held in the United States District Court for the District of Columbia in Washington, D.C. in NAFA’s lawsuit against the Department of Labor. This is the first hearing in a string of lawsuits challenging DOL’s fiduciary rule. Attorney Philip D. Bartz of Bryan Cave LLP led NAFA’s litigation efforts in front of a standing room-only crowd.
U.S. District Judge Randolph D. Moss heard oral arguments from legal counsel on both sides for almost three hours. In response to lengthy questioning from the judge, Bartz focused on NAFA’s key claims, including:
- The DOL rule is invalid on grounds that the agency exceeded its authority to regulate IRAs and that it improperly categorizes insurance agents as fiduciaries.
- The rule creates a private right of action, which only Congress can do.
- DOL’s decision to include fixed indexed annuities (FIAs) under the Best Interest Contract Exemption (BICE) in the final rule, with no opportunity for meaningful comment and without adequate justification, was arbitrary and capricious.
- The timeline for the rule’s implementation is unreasonable and unworkable.
The hearing ended with an adjournment without decision, although NAFA anticipates a decision to be rendered in the next few weeks.
Additionally, lawsuits against the DOL rule filed in Kansas and Texas district courts are scheduled for hearings in September and November, respectively.
For more details, below is a sample of media coverage of the hearing:
Morning Consult — DOL Defends Fiduciary Rule Authority to Federal Judge
InsuranceNewsNet — Tough Questioning in DOL Rule Injunction Hearing