No. 17-10238
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Land Sys., Inc. v. Cline, 540 U.S. 581, 600 (2004). DOL cannot displace the
presumption of common-law meaning because there is no inconsistency
between the common-law trust-and-confidence standard and the statutory
definition of “fiduciary.” The Fiduciary Rule conflicts with the plain text of the
“investment advice fiduciary” provision as interpreted in light of contemporary
understandings, and it is inconsistent with the entirety of ERISA’s “fiduciary”
definition. DOL therefore lacked statutory authority to promulgate the Rule
with its overreaching definition of “investment advice fiduciary.”
13
B. The Fiduciary Rule fails the "reasonableness" test of
Chevron step 2 and the APA.
Under Step 2 of Chevron, “if the statute is silent or ambiguous with
respect to the specific issue, the question for the court is whether the agency’s
answer is based on a permissible construction of the statute.” Chevron,
467 U.S. at 843. Notwithstanding the preceding discussion, we assume
arguendo that there is some ambiguity in the phrase “investment advice for a
fee.” In that case, the Chevron doctrine requires that DOL’s regulatory
interpretation be upheld if it is “reasonable.” Id. at 845.
14
In addition, the
13
As noted at the beginning of this analysis, the Fiduciary Rule’s overbreadth flows
from DOL’s concession that any financial services or insurance salesman who lacks a
relationship of trust and confidence with his client can nonetheless be deemed a fiduciary.
This conclusion, however, does not mean that any regulation of such transactions, or of IRA
plans, is proscribed. (“To the extent . . . that some brokers and agents hold themselves out
as advisors to induce a fiduciary-like trust and confidence, the solution is for an appropriately
authorized agency to craft a rule addressing that circumstance, not to adopt an interpretation
that deems the speech of a salesperson to be that of a fiduciary, and that concededly is so
overbroad that . . . it must be accompanied by a raft of corrections.”).
14
This court is bound by the Supreme Court’s decisions to defer to an agency’s
“reasonable” construction of an ambiguous statute within its realm of enforcement
responsibility. Nevertheless, the Chevron doctrine has been questioned on substantial
grounds, including that it represents an abdication of the judiciary’s duty under Article III
“to say what the law is,” and thus turns over judicial power to politically unaccountable
employees of the Executive Department. See, e.g., Michigan v. E.P.A., 135 S. Ct. 2699, 2712
(2015) (Thomas, J., concurring) (“Chevron deference precludes judges from exercising
Case: 17-10238 Document: 00514388699 Page: 31 Date Filed: 03/15/2018