The Fifth Circuit Court of Appeals has denied motions by AARP and State Attorneys General of California, Oregon and New York to intervene in the case against the Department of Labor’s fiduciary rule, meaning the Court will not grant their requests for rehearing.
“AARP is disappointed in today’s court decision denying AARP the right to intervene in the Fifth Circuit case to protect the retirement advice provided to our members and other Americans saving for retirement,” AARP said in a statement. “AARP will continue its efforts to fight on behalf of consumers who want financial advice in their best interest. It is hard enough to save for retirement—we should do all we can to make sure retirement savers are getting the help they need.”
In a last-ditch effort to keep the fiduciary rule alive, AARP and State Attorneys General filed separate motions to intervene in the case last Thursday. Both sought a rehearing en banc, meaning the case would be heard by all the judges of the Court, not just the three that ruled last month.
In a 2-to-1 decision, the Fifth Circuit struck down the DOL rule in mid-March, agreeing with the plaintiffs that the department overstepped its statutory boundaries in creating the rule—a major victory for the brokerage industry.
The latest court action brings the rule even closer to death.
The DOL missed the deadline on Monday to file for a rehearing in the case. It has until June 13 to take the case to the Supreme Court, but it’s unlikely to do so.
The Court could still decide to rehear the case on its own.
Meanwhile, the Securities and Exchange Commission recently voted to propose a rule package that would set a best interest standard for broker/dealers.