The U.S. Court of Appeals for the 5th Circuit denied Wednesday the request by AARP and state attorney’s general from California, New York and Oregon to intervene after the court ruled to vacate the Labor Department fiduciary rule.
The court did not explain its order, stating that the motions were denied.
AARP told the court Tuesday that the Labor Department’s failure to appeal the court’s ruling vacating the rule opened the door for intervention by the retiree advocacy group.
“Although the government once ‘vigorously defended’ the rule, … it no longer does so here now that the rehearing deadline has passed,” AARP said, referring to Labor being required to file an appeal by April 30.
“Under standard intervention principles, that turn of events warrants granting AARP’s motion to intervene,” AARP attorneys Mary Ellen Signorille and Deepak Gupta wrote.
AARP along with state attorneys general from California, Oregon and New York filed motions on April 28 to intervene in the case.
AARP said in a Wednesday statement that the group is “disappointed in today’s court decision denying AARP the right to intervene in the Fifth Circuit case to protect the retirement advice provided to our members and other Americans saving for retirement,” adding that AARP “will continue its efforts to fight on behalf of consumers who want financial advice in their best interest.”
Eugene Scalia, the lead Gibson, Dunn & Crutcher attorney who argued against Labor’s rule before the 5th Circuit and represents the plaintiffs — including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute — argued in an April 30 filing with the court that AARP and the state attorneys general “have delayed until the last moment to file intervention motions to seek rehearing en banc,” adding that their delay “is unjustifiable” and should be denied.
Scalia also argued that the AARP and state AGs’ requests failed to satisfy the standard for emergency relief.
Chamber, FSI, Financial Services Roundtable, Insured Retirement Institute and SIFMA released a statement after the 5th Circuit ruling that the groups “are pleased the Fifth Circuit denied the motions to intervene, and that the Department of Labor’s unlawful 2016 fiduciary rule is at an end.” The SEC, not the DOL, the groups said, “is the appropriate regulator in this area, and we look forward to working with the SEC on the current proposed rulemaking to establish a best interest standard across all accounts, and not just retirement accounts.”
The attorneys for AARP countered in their Tuesday filing that “none of the plaintiffs’ efforts to avoid this [rehearing] conclusion is persuasive.”