The National Association for Fixed Annuities said Monday that it would appeal the decision by a Washington federal trial judge denying the annuity group’s request to block the Department of Labor’s fiduciary rule.
U.S. District Judge Randolph Moss denied in his 92-page ruling, released late Friday afternoon, NAFA’s request for a preliminary injunction to stay DOL’s rule while also ruling in favor of Labor on the merits in upholding its conflict of interest rule.
“We are obviously disappointed by the court’s decision, but we have always assumed this case would get decided by a higher court and we are pleased the issues will get de novo review by the Circuit Court,” said Chip Anderson, NAFA’s executive director, in a Monday statement.
(Related: DOL Releases FAQs on Fiduciary Rule)
NAFA said that it would seek an expedited review of Moss’ decision in the D.C. Circuit Court of Appeals given the fiduciary rule’s first compliance date in April – but the annuity group must first get Moss’ approval.
Pamela Heinrich, NAFA’s general counsel, said in a Monday interview with ThinkAdvisor that NAFA’s attorneys will likely ask Moss “by the end of this week” for a preliminary injunction pending the appeal. “We can’t go right upstairs” to the appeals court with our motion, Heinrich said. “We may ask for a status conference so that we could get this before [Moss] with the other party [DOL] and move this along. We’re feeling the pull of time.”
Should Moss deny NAFA’s request to appeal his decision to a higher court, “then that opens the door to essentially filing a motion to the D.C. Court of Appeals to request a stay [of Moss’ Friday decision] pending the appeal of the underlying” decision.
NAFA will ask the appeals court for a “de novo review” of Moss’ decision, which means the appellate court will consider the case without being bound or influenced by the lower court’s decision.
Anderson added that NAFA “remains optimistic” that the courts “will ultimately find the rule to be an overreach by Labor that is inconsistent with existing tax and financial services laws.”
“NAFA believes the fiduciary rule will disrupt the distribution and availability of fixed annuities and have a particularly adverse impact on the low and middle income consumers who have come to rely on these valuable retirement savings products,” Anderson said.
Labor Secretary Thomas Perez, who has vowed to “vigorously” defend DOL’s rule from the lawsuits filed against the rule, stated after Moss’ Friday ruling, that he’s “pleased that the court recognized the comprehensive and thoughtful process we used in crafting this rule.”
Erin Sweeney, of Counsel at Miller & Chevalier and a former DOL attorney, said in a Monday interview that NAFA’s goal with an expedited appeal is to “get a split in the circuits to get an appeal to the Supreme Court.”