Breaking: DOL Rule Upheld by Kansas Judge

A Kansas judge sided with the Department of Labor in the second decision to go against plaintiffs challenging the controversial fiduciary rule.

Judge Daniel Crabtree, an Obama appointee, issued a 63-page decision today rejecting plaintiff Market Synergy Group’s request for a preliminary injunction stopping the rule.

MSG did not meet the four-part standard needed to win an injunction, the judge wrote. Injunctions are historically difficult to win, but Crabtree subjected government attorneys to tough questioning during the Sept. 21 hearing.

That led some to suggest he favored the plaintiff’s case.

“Any injunction thus will produce a public harm that outweighs any harm that plaintiff may sustain from the rule change,” Crabtree wrote. “Congress authorized the DOL to evaluate these competing interests and it 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.”

On Nov. 4, Judge Randolph D. Moss of District of Columbia District Court denied a request by the National Association for Fixed Annuities for a preliminary injunction and granted a summary judgment to the Department of Labor.

NAFA quickly appealed and requested two things: an expedited ruling and an injunction delaying the rule’s April 10, 2017 effective date. Moss granted the former motion, but left the date of compliance untouched.

The third of the original lawsuits was heard Nov. 17 in a Dallas federal court, a consolidated case led by the U.S. Chamber of Commerce.

A fourth case – Thrivent Financial vs. Department of Labor – takes a different route in challenging the DOL’s class-action provision. It will be heard March 2 in St. Paul, Minn.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com.

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