The Chamber of Commerce and the Department of Labor have cross-moved for summary judgment in the Chamber’s lawsuit seeking to vacate the final fiduciary regulation. See Chamber of Commerce of the United States of America, et al. v. Thomas E. Perez, et al., United States District Court for the Northern District of Texas, Case No. 3:16-cv-1476-M. The briefing on the Chamber’s motion was completed on September 16, 2016, and, according to the Chamber’s website, oral argument is set for November 17, 2016.
A central dispute in the case revolves around the scope of the Department’s authority to promulgate regulations. The Chamber argues the following:
Congress gave DOL regulatory and enforcement authority over employer-sponsored retirement plans and virtually no authority over retirement savings outside that context. Desiring to regulate all ‘retirement savings’ but lacking that power, DOL leveraged its limited interpretative authority under ERISA and the Internal Revenue Code to impose restrictions that are so impracticable that the financial and insurance industries will have no choice but to either abandon the market or submit themselves to the vast and onerous new regulatory architecture that DOL has erected through its exemptive authority.
(Chamber of Commerce Plaintiffs’ Reply in Support of Their Motion for Summary Judgment and Opposition to Defendants’ Cross-Motion for Summary Judgment at 1) (emphasis in original). The Chamber continues by asserting that the Department has used “that authority to exact firms’ agreement to legal obligations that it is powerless to impose directly, DOL has seized the power over ‘retirement savings’ that Congress never bestowed on it; shoved aside other regulators, both federal and state; and upended decades of state and federal regulation and law.” (Id.).
There is little doubt that the losing parties will appeal and we may see some interesting differences of opinion among judges about the Department’s authority, especially considering that there are multiple suits challenging the fiduciary regulation. Nonetheless, the author remains convinced that the plaintiffs face an uphill battle in these suits.