A second U.S. District Court refused on Monday to grant a temporary injunction against the Department of Labor’s new fiduciary rule, which becomes effective April 10.
Insurance agency Market Synergy Group in June filed a legal challenge to the rule in the Topeka, Kan., District Court, and sought a preliminary injunction while the case was being decided; the case was heard Sept. 21.
Writing that the plaintiff did not meet the criteria for an injunction, U.S. District Judge Daniel Crabtree agreed with the Department of Labor. In the order, Mr. Crabtree said, “An injunction will lead to confusion about the law and likely produce unwarranted delay. This is not in the public’s interest. Any injunction thus will produce a public harm that outweighs any harm that plaintiff may sustain from the rule change.”
DOL “has concluded that significant public interests favor the proposed regulatory changes. As already explained, evidence in the administrative record supports the DOL’s determination, and the court finds no basis for contradicting those findings,” Mr. Crabtree said.
U.S. District Judge Randolph Moss on Nov. 4 in Washington rejected arguments in a lawsuit filed by the National Association for Fixed Annuities that the rule contains vague requirements for reasonable compensation and an improper right of action, among other legal points, and Mr. Moss refused to grant a stay. NAFA appealed that decision.
District Courts in Dallas and Minneapolis have not ruled yet in cases challenging the rule on somewhat different legal arguments.
