The Department of Labor’s fiduciary rule is still dead – and this time it might be permanent.
The Fifth Circuit Court of Appeals denied on Tuesday a motion filed by three state attorneys general to restore the DOL’s best-interest regulation, and another motion calling for a rehearing of the fiduciary rule en banc, or by the entire 17-judge panel of the Fifth Circuit.
California, Oregon and New York asked a three-judge panel from the court to review its May 2 refusal of a lawsuit filed by the attorneys general and the AARP that would allow the states to defend the fiduciary rule and appeal a decision that vacated the rule.
On March 15, Fifth Circuit Court of Appeals judges struck down the DOL’s regulation, a decision based largely on the opinion that the federal agency had overextended its authority in requiring all retirement investment recommendations to be in a client’s best interest. As of yet, the Fifth Circuit has not issued a mandate to vacate the rule entirely.
The latest decision exhausts the appeal process at the federal circuit court level -- an appeal could still originate from the Department of Justice or the DOL. Both agencies have until June 13 to request that the Supreme Court hear the matter.
In the meantime, an alternate best-interest regulation drafted by the U.S. Securities and Exchange Commission is in a comment period slated to end on Aug. 7.