As of Friday, May 17, 2018 the Department of Labor’s Fiduciary Rule remains in effect. Despite the Fifth Circuit issuing an opinion vacating the rule, the Circuit has yet to issue a mandate to officially vacate the rule. The earliest the court could have issued the mandate was May 7. This incredibly long delay has many financial professionals in the industry asking the question: what is taking so long? There are a few possibilities.
First, the court could be considering a rehearing en banc, which means each of the judges would hear the case again and make a decision. While the government did not ask for a rehearing, any judge on his or own accord can ask for the judges to be polled regarding whether the court should rehear the case as an entire court. If a majority of the judges—eight of the fifteen—agree to rehear the case, the case starts over at the circuit court level with each of the judges participating, instead of the standard three judge panel. The circuit’s delay in issuing the mandate could be because the court is in the process of polling each of the judges for this purpose.
Second, the court could be attempting to figure out the procedural knot that the AARP and the states of California, Oregon, and New York injected into the case by attempting to intervene in the case and take the place of the government that prefers the case to end. The Fifth Circuit denied their attempt. But on Wednesday, May 17, California, Oregon, and New York filed a motion for reconsideration of their motion to intervene. The bottom line: the court is being faced with new and complicated procedural issues that require extra time and diligence to manage.
In the next few weeks, financial professionals should keep an eye out for the Fifth Circuit’s mandate. If the mandate issues, the Fiduciary Rule is vacated and will no longer be enforceable. The last date to keep in mind is June 13, the last day the government could appeal the Fifth Circuit Court’s ruling to the United States Supreme Court. If June 13 comes and goes with no further appeal by the government, the Fiduciary Rule will be officially dead.