"In Latest Salvo, Lawsuit Seeks to Overturn Fiduciary Rule"SHRM Online
Erin Sweeney was quoted regarding a recently filed case seeking to overturn the U.S. Department of Labor's (DOL's) final rule on conflicts of interest in retirement advice. Eight industry and trade groups, including the U.S. Chamber of Commerce, filed a lawsuit in the district court for the northern district of Texas, arguing that the rule makes saving for retirement more difficult for the individuals the law is designed to protect. Sweeney commented on the choice of venue for the case. The plaintiffs "most definitely chose Texas because they thought it would be a friendly venue," she said, as the district court recently issued a preliminary injunction against the DOL regarding a different regulation.
Among the more interesting arguments, Sweeney said, are the claims that the Internal Revenue Service, not the DOL, has jurisdiction over individual retirement accounts and that the U.S. Securities and Exchange Commission has jurisdiction over advisors and the duty to determine what "best interest" means. "I think it's a strong argument. Whether it prevails, I don't know," she said, adding that this particular lawsuit "is only one approach parties can take to halt the fiduciary rule." In addition, it's likely that other trade groups will file separate litigation in other jurisdictions to overturn the rule, "requiring the Department of Labor to fight a multipronged battle on multiple fronts," she said.