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Fiduciary rule critics seek emergency injunction

Financial industry groups and the U.S. Chamber of Commerce filed for an emergency injunction to delay the Department of Labor’s fiduciary rule.

The groups filed for the injunction March 10 in U.S. District Court in Dallas.

On March 1, the Department of Labor proposed extending the applicability date by 60 days, to June 9 from April 10. The latest motion by several groups challenging the rule in Texas “parallels the actions of the DOL by providing another avenue for postponing the applicability date of the fiduciary rule,” the groups said in a statement, noting that a stay would avoid “significant, potentially unnecessary costs” and give firms more time to prepare for the rule.

On Feb. 8, U.S. District Judge Barbara M.G. Lynn in Dallas, who consolidated several cases seeking to undo the rule, dismissed legal challenges to the rule, and denied the Justice Department’s motion to stay the case while the DOL reviews the rule following a White House executive order to revisit it.

The groups are seeking the injunction while their appeal of that decision is pending. Ms. Lynn gave them until Thursday to file a supplemental brief “to inform the Court why an injunction pending appeal is necessary,” and ordered the DOL to respond by Friday. The groups asked for an injunction by March 20.

Federal district courts in Topeka, Kan., and Washington in 2016 upheld the rule in similar challenges that have been appealed. The Labor Department is seeking a stay in another fiduciary rule challenge in District Court in St. Paul, Minn., “in light of the potential for change to the rule-making,” a government lawyer told District Court Judge Susan Richard Nelson.