There were two key developments last week concerning the ongoing challenges to the U.S. Department of Labor (USDOL) conflict of interest rule and related exemptions: a Presidential Memorandum calling for a review of the rule, and a ruling by a federal court in Texas rejecting the U.S. Chamber of Commerce’s challenges to the rule.
On February 3, 2017, President Trump issued a Presidential Memorandum ordering the USDOL to conduct an economic and legal analysis of the conflict of interest rule and associated exemptions. The Memorandum requires the USDOL to rescind the rule if it finds that it is inconsistent with the Trump Administration’s policies. The Memorandum does not explicitly call for an extension of the rule’s April 10, 2017 applicability date. However, the USDOL has filed a notice with the Office of Management and Budget indicating that it intends to delay implementation and open up a new comment period. The details have not been made public.
District Court Decision
On February 8, 2017, a federal district court in Texas granted the USDOL’s motion for summary judgment and rejected the Chamber of Commerce’s many challenges to the conflict of interest rule and related exemptions. This decision represents the third federal district court to uphold the rule and exemptions as a permitted exercise of the USDOL’s authority. It followed federal district courts in Washington D.C. and Kansas. The decision does not opine on the new administration’s authority to rescind the rule, delay enforcement, or issue a different rule, subject to the procedural requirements of the Administrative Procedure Act.