[T]he DOL continues to ignore or twist what the New Interpretation says and what the Fifth Circuit held in Chamber of Commerce. . . . Having convinced the Magistrate Judge to accept the premise that it hasn’t really reinterpreted the five-part test in any meaningful way, the DOL now hopes the Court will not look too closely under the hood but instead simply adopt the Magistrate Judge’s erroneous Recommendations. The Court cannot do so, however, without running afoul of the Fifth Circuit’s unequivocal holdings on the proper interpretation of ERISA and the five-part test. 

Based on the foregoing, Plaintiffs and Defendants respectfully request an extension of the deadline for filing objections to the Recommendations up to and including August 14, 2023. In addition, Plaintiffs and Defendants request that the Court order that the responses to any objections filed by either party will be filed on or before September 13, 2023, with any reply briefs to be filed by October 4, 2023.

The Court should vacate the portions of PTE 2020-02’s text and preamble that allow consideration of Title II investment advice relationships when determining Title I fiduciary status, including the New Interpretation’s (i) allowance of review that a single rollover “can be the beginning of an ongoing advice relationship” to Title II plans…

Regarding the DOL submission in our case, we think DOL sidesteps the real issue, which is that the ASA decision knocked out the lynchpin of their New Interpretation in the sense it essentially blocks DOL from applying its guidance on who is a fiduciary in typical rollover situations when rollovers were the very reason for the DOL rulemaking in the first place. We also think it is noteworthy that the ASA decision was rendered four months ago and DOL has yet to formally acknowledge that court’s decision and follow through on the remand for “further proceedings consistent with this Order.”

As most of you know, the DOL suffered a major setback in the challenge brought by ASA where the court vacated a foundational element of DOL’s new interpretation of the five part test. The court said DOL cannot aggregate rollover advice given to an employer plan participant with subsequent IRA advice for purposes of satisfying the regular basis element of the five part test used to determine fiduciary status. At first the DOL filed an appeal but then withdrew its appeal and now is asking the Magistrate Judge in FACC’s case for more time to address whether the entirety of its new interpretation is rendered unworkable by the ASA decision.

The ASA Order nullifies one of the challenged FAQs on the ground that the policy referenced therein was not a reasonable interpretation of the text of ERISA or the five-part test. Specifically, the court rejected a key element of the DOL’s New Interpretation, which provides that the regular basis requirement for determining fiduciary status will be satisfied in the case of an Investment Professional’s advice to an ERISA plan member with respect to a rollover transaction based on the provision or anticipated provision of post-rollover advice to the IRA owner.

The Court DECLARES UNLAWFUL and VACATES the policy referenced in FAQ 7, remanding it to the Department of Labor for further proceedings consistent with this Order.

This is a statutory construction case. And as such, we believe there’s a basic principle that can and should guide the Court’s decision in matters of statutory construction as it does in matters — many matters under the law. And that — that principle is: Words have meaning. In this particular case, we have the luxury, not often afforded to litigants, that the Fifth Circuit has given us very clear direction as to the meaning of the statute in question arising out of the last time the Department of Labor sought to redefine who’s a “fiduciary” under ERISA.