DOL Drops Appeal in ASA Lawsuit

On May 15, 2023, the U.S. Department of Justice voluntarily dismissed its appeal of a ruling in favor of the American Securities Association (ASA) against the U.S. Department of Labor (DOL) in the Middle District of Florida, which stopped the DOL’s attempt to use informal guidance to change existing retirement rules in violation of the Administrative Procedure Act (APA). On February 13, 2023, the District Court struck down DOL’s guidance which stated that a financial advisor's one-time recommendation to rollover retirement assets may be subject to ERISA fiduciary duties. The District Court declared this action “arbitrary and capricious” and vacated it.

“We are pleased the DOL dropped its appeal of the district court's decision to strike down its attempt to change existing rules about retirement advice without a formal rulemaking,” said Chris Iacovella, President & CEO of the American Securities Association. “The district court correctly held the DOL’s guidance was arbitrary and capricious and had no basis in law. ASA remains dedicated to protecting the rule of law, investor choice, and the rights of America’s working families and retirement savers from the overreach of the administrative state.”

ASA sued the DOL last year in federal court in the Middle District of Florida over a violation of the APA.