The nine plaintiffs suing the Labor Department over its fiduciary rule in a Texas court said late Friday that they are appealing Judge Barbara M.G. Lynn’s Feb. 8 decision upholding Labor’s rule.
“We remain confident in the merits and strength of our case and stand by our assertion that the Department of Labor exceeded its authority,” said the plaintiffs, which include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association, and the Financial Services Institute, in a joint statement announcing the appeal.
Five national co-plaintiffs filed the Feb. 25 appeal in conjunction with the Greater Irving-Las Colinas Chamber of Commerce, Lake Houston Area Chamber of Commerce, Lubbock Chamber of Commerce and Texas Association of Business.
The case will now move to the U.S. Court of Appeals for the Fifth Circuit.
“We have long supported a best interest standard, adopted by the appropriate regulatory authority and across all individual investor accounts, not just retirement,” the groups explained.
“This is a misguided rule that will harm retirement savers and financial services firms that provide needed assistance and options to their clients, including modest savers and small business employees. Further, the ‘private right of action’ mechanism creates unwarranted litigation risk for financial advisors, who will face the threat of meritless class action lawsuits challenging their every move,” they added.
The nine plaintiffs in the Texas case are represented by former Labor Department solicitor Eugene Scalia, who’s a partner in Gibson, Dunn & Crutcher’s Washington office and a son of deceased Supreme Court Justice Antonin Scalia.