When the Fifth Circuit finally entered its mandate and judgment on June 21, 2018 “vacat[ing] the Fiduciary Rule in toto”, the DOL’s fiduciary rule, as a matter of law, officially became a dead letter. But on remand, the United States District Court for the Northern District of Texas created a narrow opening through which, in theory, the parties who unsuccessfully sought to intervene in the Fifth Circuit could make yet another attempt to save the fiduciary rule. Specifically, the district court issued an Order on June 28, 2018 requiring any party seeking “further relief” to notify the court by July 12, 2018. The court further stated that “[i]f no notice is received, the case will be dismissed with prejudice and without further notice.” The District Court did not specify any “further relief” that it believes could be sought, but the court may want to determine whether the unsuccessful attempted intervenors in the Fifth Circuit will file a petition for a writ of certiorari with the United States Supreme Court. The deadline for the attempted intervenors to do so is July 31, 2018.
The odds that the Supreme Court would grant certiorari to the attempted intervenors are extremely long because, among other reasons, the petitions to intervene were not well founded, as the Fifth Circuit recognized. Nevertheless, the parties, including the DOL, in Thrivent Financial for Lutherans v. R. Alexander Acosta, et al., U.S.D.C. Minn., Civ. A. No. 16-cv-03289, have asked the United States District Court for the District of Minnesota to continue a previously entered stay in that litigation pending the July 12 deadline set by the United States District Court for the Northern District of Texas. While it is highly unlikely that a petition for certiorari by the attempted intervenors will succeed, they may nonetheless seek further review as noted by the parties in Thrivent Financial. It is important, however, to keep in mind that the fiduciary rule should still be deemed vacated, even if a petition for certiorari is filed, because the Fifth Circuit’s mandate remains effective absent a stay, which seems extremely unlikely at this point. We will have a further update on June 12 regarding whether the attempted intervenors respond to the North District of Texas’ Order.
George Michael Gerstein advises financial institutions on the fiduciary and prohibited transaction provisions of ERISA. As co-chair of the fiduciary governance group, he assists clients with tracking, and understanding, the numerous fiduciary developments at the federal and state levels, including the rules and regulations of governmental plans. He also advises clients with respect to the fiduciary duty implications of ESG investing.