A federal judge in Texas has agreed to allow the three lawsuits against the Department of Labor’s fiduciary rule that are pending in the state to be consolidated, and both parties recently filed a motion asking that the judge render a decision in the case as soon as October.
In her June 21 order, District Judge Barbara M.G. Lynn stated that the three actions are based on “common issues of law and fact” and allowed for each case to retain its “separate identity” with separate oral arguments and allowing each to make further litigation decisions.
DOL filed a motion on June 20 requesting that the three lawsuits pending in the U.S. District Court for the Northern District of Texas challenging DOL’s fiduciary rule be consolidated. The plaintiffs agreed to consolidation.
In a separate June 24 motion, the parties agreed that the cases “should be decided expeditiously on cross-motions for summary judgment without discovery or any other evidentiary proceedings.”
Under the schedule proposed by the parties, the motion states, “briefing would be completed by early October so that the oral argument could be held in mid- to late October or at the Court’s earliest convenience thereafter.”
While a judge may not render a decision in October, the parties in the case have proposed a schedule that could lead to a ruling by the end of the year.
The nine plaintiffs in the first suit, filed June 2 in the Texas district, include the Securities Industry and Financial Markets Association, the Financial Services Institute, the Financial Services Roundtable, the U.S. Chamber of Commerce, the Insured Retirement Institute and four Texas groups, including the Texas Association of Business.
The nine groups are represented by former DOL solicitor Eugene Scalia, who’s now a partner in Gibson, Dunn & Crutcher’s Washington office.
The second suit was filed June 8 by the American Council of Life Insurers along with the National Association of Insurance and Financial Advisors, and the third suit was filed on June 9 by the Indexed Annuity Leadership Council.
The plaintiffs argue, among other things, that there’s insufficient time for their members to comply with DOL’s rule by the April 2017 deadline.
DOL “has declined plaintiffs’ request to stay the deadlines imposed by the rulemaking pending the outcome of litigation, and plaintiffs therefore cannot defer these costs until after a resolution of this matter,” the motion states.
Meanwhile, late on June 23, the House of Representatives failed to override a presidential veto on a resolution to nullify the rule.
The U.S. District Court for the District of Columbia has set Aug. 25 as the date to hear the recent suit against DOL brought by the National Association for Fixed Annuities. The lawsuit seeks a preliminary injunction to stay the rule.
The insurer Market Synergy filed a complaint in the U.S. District Court for the District of Kansas challenging only the department’s conduct in adopting the revisions to Prohibited Transaction Exemption 84-24, which pertains to what the DOL calls “fixed-rate annuities.”
As the cases against DOL’s fiduciary rulemaking move ahead, Bloomberg reported Monday that some members of the Securities Industry and Financial Markets Association’s board balked at the suit.
Wells Fargo reportedly said it would pull its SIFMA membership if the Wall Street trade group filed suit, but SIFMA’s president and CEO, Ken Bentsen, denied such a rumor. Morgan Stanley, Bank of America Corp. and JPMorgan Chase & Co., according to Bloomberg, also opposed the lawsuit against DOL after losing the “bruising” six-year lobbying battle to torpedo DOL’s fiduciary rule.
— Check out Wirehouses Split With Smaller Firms Over DOL Lawsuit on ThinkAdvisor.