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Judge Denies Request to Halt Thrivent DOL Fiduciary Case

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In a quick turnaround, U.S. District Court Judge Susan Richard Nelson denied Wednesday the Department of Justice’s request to stay the current court case filed against the Department of Labor’s fiduciary rule by Thrivent Financial for Lutherans.

In its Feb. 17 request, DOJ cited the Labor Department’s review of the fiduciary rule under the recent directive by President Donald Trump, as well as Labor’s recent filing with the Office of Management and Budget to delay the rule’s April 10 compliance date.

“In light of the potential for change to the rulemaking, there is good cause to continue the March 3, 2017 summary judgment hearing and stay proceedings pending the outcome of the department’s review,” the DOJ attorneys wrote.

But Mark Johnson, an attorney at Greene Espel representing Thrivent, told the judge that the case should move ahead. 

Nelson agreed, stating Wednesday that “having carefully considered the matter, the court agrees with Plaintiff that a stay is not warranted at this time. While the inherent power to manage a court’s docket rests with the court’s discretion, considerations of fairness to the opposing party mandate a presumption in favor of denying a motion to stay.”

The Thrivent case is set for a March 3 summary judgment hearing.

Thrivent became the sixth plaintiff to lob a complaint against Labor’s fiduciary rule when the insurer filed a suit in late September challenging the class-action waiver requirement under the rule’s best interest contract exemption, or BICE.

Compliance with BICE doesn’t kick in until Jan. 1, 2018.

The Thrivent suit “concerns one condition of an administrative exemption issued by the Department of Labor that is not scheduled to become applicable to Plaintiff and the rest of the financial services industry until January 1, 2018,” the DOJ wrote.

But Johnson, the Thrivent attorney, asserted that “the mere possibility that future administrative actions could moot Thrivent’s claims is not sufficient to support a stay.”

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