Opponents of the Department of Labor fiduciary rule made a strong case Thursday as the latest complaint aimed at overturning the rule was argued in a Dallas courtroom. That was the word from a prominent Washington, D.C., lawyer.
The U.S. Chamber of Commerce and the American Council of Life Insurers were the lead plaintiffs in the Dallas lawsuit, heard by Judge Barbara M.G. Lynn. The lawsuit was consolidated from three complaints filed in June.
“I believe the claimants outlined a path for her to vacate; the question is whether she can feel comfortable going down that path,” said Erin M. Sweeney, a lawyer with Miller & Chevalier, who was in the courtroom gallery.
Attorneys Eugene Scalia and David W. Ogden, representing the U.S. Chamber and ACLI, respectively, made clear distinctions between their case and that of the National Association for Fixed Annuities. The NAFA complaint was rejected by Judge Randolph D. Moss of the District of Columbia District Court.
Ogden focused much of his argument on the free speech count of the lawsuit. The DOL claims conflicts of interest are leading advisors to deliver inappropriate advice to clients.
“The mere possibility that speech may be misleading doesn’t justify the regulation of it,” Ogden argued. “They haven’t even shown that they need the rule.”
Government attorney Emily Newton countered by noting that the fiduciary rule merely requires advisors to act in the “best interest” of clients, disclose fees and accept only “reasonable compensation.”
“These are not things that are onerous,” Newton said. “These are fundamental duties.”
The plaintiffs were not the only ones in the courtroom focused on Judge Moss’s decision, Sweeney said. Judge Lynn brought up the decision several times and said she has read Moss’s 92-page ruling.
“I think Judge Lynn was playing it very close to the vest and is very concerned about how her opinion will be evaluated next to Judge Moss’ opinion,” Sweeney said.
Other plaintiffs in the Northern District lawsuit include the Indexed Annuity Leadership Council and the National Association of Insurance and Financial Advisors.
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