5th Circuit Dismisses Appeal in DOL Fiduciary Rule Case
On Nov. 30, the U.S. Court of Appeals for the 5th Circuit granted the U.S. Department of Labor’s (DOL’s) request to dismiss its appeal of the 2024 fiduciary rule.
The rule, finalized on April 24, 2024, updated the definition of when a person provides “investment advice for a fee or other compensation” under the Employee Retirement Income Security Act of 1974. This definition determines who qualifies as a fiduciary when advising on retirement plans and related assets.
On May 2, 2024, shortly after the rule’s finalization, the Federation of Americans for Consumer Choice — an advocacy group for independent insurance agents — filed a lawsuit claiming the rule is unlawful and “arbitrary and capricious.” On July 25, 2024, Judge Jeremy Kernodle in Tyler, Texas, issued a nationwide preliminary injunction blocking the rule, which had been set to take effect in the fall.
Following a change in administration, the DOL requested additional time to determine how to proceed, and the court granted an extension on April 15, 2025. The court denied a second request for more time during the lapse in appropriations but allowed a short temporary extension. Ultimately, the DOL moved to dismiss its appeal, and the 5th Circuit granted the request.
Although the 2024 fiduciary rule remains suspended, employers and practitioners should note that a revised fiduciary rule is expected because it appeared on the spring 2025 unified agenda of regulatory and deregulatory actions.
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