By allowing continuing stays, the DOL is allowing the alleged harm it complains of (the stay) to continue. That alone may signal that the DOL may determine that it will not pursue prosecution of the appeal, and that may be because it will change course on the Retirement Security Rule, either by issuing one that does not include annuities or by allowing the minor corrections made in 2020 to continue.
The Department of Labor (DOL’s) beleaguered fiduciary duty rule lingers on in federal court litigation, but there are signs that the dispute (as well as the Rule) may not be around for long. At this point, it may be difficult to remember where the dispute landed when the various consecutive stays began.
If you recall, in 2016 the DOL proposed a rule that would have expanded fiduciary duties. That rule was struck down in 2018 by a federal court of appeals as too expansive in Chamber of Commerce of U.S. of Am. v. U.S. Dep’t of Labor (Chamber).
The DOL tried again, with what it titled the Retirement Security Rule. This was too met with litigation. As part of the effort to strike the second, newer rule, the Plaintiffs relied heavily on the 2018 ruling. Specifically, at the outset of the 2024 case, the Plaintiffs asked the district court to issue a preliminary injunction (PI) that would keep the DOL from implementing the rule until the court could determine which parts were permissible, if any.
The Court granted a nationwide injunction against the implementation of the DOL’s rule on July 26, 2024. The DOL moved to appeal that ruling on September 20, 2024. And there things ground to a halt.
After an administrative matter was complete, the court set a schedule for the parties on briefing. It set December 2, 2024, for the DOL to file its brief, but the day before the election on November 4, 2025, the court allowed the DOL extra time to file its brief as part of a joint stipulation for additional time. The DOL filed its brief on Dec 20, 2024. The appellees, the original plaintiffs, were also given extra time to reply. The parties then stipulated to a complete stay of the proceeding on Valentine’s Day, February 14, 2025.
In mid-April, the court issued a second unopposed stay. When it comes to briefing schedules with the courts, it is common for the parties to work out extensions and delays among themselves before submitting them to the court. In fact, some Judges encourage parties to do so. The multiple unopposed extensions of time are not what is unusual in this case. Instead, those extensions may be clues as to the DOL’s feelings about the Retirement Security Rule.
Specifically, the first extension was granted based partially on when new DOL Secretary Lori Chavez-DeRemer was sworn in, which was March 11, 2025. The court’s order states that it granted a stay in the court so that the new DOL officials could have “sufficient time to become familiar with the issues in these cases and determine how they wish to proceed.” In the second order granting the stay, the parties asked for (and the court granted) an unopposed stay for “additional time needed for new agency officials to decide how to proceed in these appeals. Because any action taken by the agency could affect the litigation…”
It is important to read the language from the joint request for a stay in line with the matter being appealed. Specifically, the DOL appealed the preliminary injunction because it believed that its rule should not be kept from being implemented. In its appeal, the DOL states that it worked to correct the flaws identified by the court in the Chamber case. It then says that the lower court, that of the Northern District of Texas, referred to but did not apply the analysis of the 2018 court. The entire appeal is of the preliminary injunction. And yet, by allowing continuing stays, the DOL is allowing the alleged harm it complains of (the stay) to continue. That alone may signal that the DOL may determine that it will not pursue prosecution of the appeal, and that may be because it will change course on the Retirement Security Rule, either by issuing one that does not include annuities or by allowing the minor corrections made in 2020 to continue.
Additionally, the underlying district court case was administratively closed on April 15, 2025.[1] An administrative closure does not mean a case is final. Often when a case is administratively closed, the court has had a signal that they do not expect further action on the case. “…[A]dministrative closure …is an administrative device useful in pruning ‘overgrown dockets’ and causing files for cases likely to be in stasis for some time to be transferred to an appropriate storage repository.”[2] An appeal of an interlocutory issue doesn’t often stay an entire case. That is a signal that the parties thought the main issue in the case was the PI. In other words, the continuing stays in the appeal as well as the administrative closure in the lower court show that the DOL’s fiduciary rule will likely not be implemented for quite some time, if at all.
[1] Docket entries available to view here: https://ecf.txnd.uscourts.gov/cgi-bin/DktRpt.pl?202256106770841-L_1_0-1
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
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