The judge overseeing the lawsuit filed by nine plaintiffs in Texas against the Department of Labor’s fiduciary rule denied an emergency request by the groups to stop the rule from taking effect while they take their case to the U.S. Court of Appeals for the Fifth Circuit.
Judge Barbara M.G. Lynn ruled Monday that the plaintiffs — which include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute — failed to satisfy the requirements for an injunction pending appeal.
The decision came two days before R. Alexander Acosta is scheduled for his confirmation hearing to become secretary of Labor.
Lynn said that the court considers four factors in determining whether to grant an injunction pending appeal: the likelihood that the moving party will ultimately prevail on the merits of the appeal; the extent to which the moving party would be irreparably harmed by denial; the potential harm to opposing parties if the injunction is issued; and the public interest.
On the last day of the comment period on the delay, lawmakers say the fiduciary rule review is “duplicative.”
The court, Lynn argued, “has already found plaintiffs’ position on the merits unpersuasive, two other district courts have reached the same conclusion in similar cases, and neither court has enjoined enforcement of the rules.”
Plaintiffs, Lynn said, “have not presented any arguments that would cause the court to question its decision or persuade it that the Fifth Circuit is likely to reach a contrary conclusion.”
The argument that plaintiffs would “suffer irreparable harm without an injunction because they will face unrecoverable compliance costs due to the impending effective date of the statute” also did not hold water, she said.
“Plaintiffs indicate they have incurred compliance costs before and throughout this litigation, and that the industry has already done much preparing to comply,” Lynn wrote in her ruling. “Compliance costs already incurred cannot constitute the irreparable harm Plaintiffs must show because the standard is inherently prospective.”