--- UPDATE: Judge Barbara M.G. Lynn has ruled in favor of the Labor Department. Check out the story here.
The U.S. Justice Department Wednesday, representing the Labor Department, asked a Texas federal trial judge to postpone issuing her ruling in the case brought against Labor’s fiduciary rule.
Judge Barbara M.G. Lynn, the judge presiding over the Texas case against Labor’s fiduciary rule, has promised to issue a ruling by Friday.
Nine plaintiffs, including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute, sued the DOL over its fiduciary rule in a Texas court.
In the Wednesday filing, DOJ told Lynn that “it would not serve judicial economy to issue a ruling at this point; nor would it be efficient for this court, for the Court of Appeals for this circuit, or for the parties to be confronted by a range of appellate issues at this time.”
DOJ cited that Labor is “carefully reviewing the issues raised” in President Donald Trump’s Feb. 3 memorandum telling Labor to review the fiduciary rule “with the immediate goal of deciding the best course of action to implement its spirit and intent.”
Tom Clark, of counsel with The Wagner Law Group, said in response to the filing that "I find it surprising the DOL would not want to see what the court has to say. Even if it ruled against the plaintiffs and in favor of the rule being properly promulgated, the DOL still would have the proper standing to reassess its own rule."
As noted by Acting Labor Secretary Edward Hugler, Labor, DOJ wrote, “is assessing its legal options for delaying the applicability date (the first of which is April 10). Moreover, the outcome of the Department’s review may differ in relevant ways from the April 8, 2016 rulemaking challenged by Plaintiffs.”
For example, DOJ continued, “although the department conducted an exhaustive regulatory impact analysis in this rulemaking, its cost-benefit analysis was challenged in this litigation and could be updated. The rulemaking may additionally be ‘revised or rescinded.’”
Further, DOJ stated, “a judicial decision on a rulemaking as complex as this while the Department is undertaking the examination and potential promulgation of a proposal pursuant to the Presidential Memorandum can be expected to cause confusion with the affected public, whether parties to this litigation or not.”
Therefore, DOJ said that “defendants respectfully request that the court stay the proceedings in this action pending the results of the review directed by the president.”
Defendants, rather, propose that an “initial joint status report be due on March 10, 2017 to update the court on the department’s actions and address whether a continued stay is warranted.”
--- Check out Sen. Warren: Fiduciary Rule Delay Would Hurt Financial Services Firms on ThinkAdvisor.