News Detail

Federal Judge Denies DOL Request to Move Lawsuit Seeking to Block SWACCA-Supported Rescission of Financial Factors Rule from Northern District of Texas

U.S. District Court Judge for the Northern District of Texas Matthew J. Kacsmaryk denied a request from the U.S. Department of Labor to move a lawsuit from more than 25 Republican attorneys general suing to nullify DOL’s final rule entitled Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights out of the Northern District of Texas. As you may recall, this final rule included a SWACCA-supported repeal of the Financial Factors Rule that returns DOL’s Employee Benefits Security Administration regulations to the old “economically equivalent” tie breaker standard for selecting between investments that offer equivalent risks and returns. The final rule also affirms the position that SWACCA and its allies have advocated throughout our two-year advocacy campaign that the creation of union jobs and contributions to the plan are collateral benefits plan trustees may consider when selecting between two equivalent investments.

DOL sought to move the case because it argued that the Northern District of Texas only has a single judge and the transfer would avoid the appearance of venue shopping and discourage litigious gamesmanship. In his ruling denying DOL’s request, Kacsmaryk said DOL failed to cite a single case where a judge had granted a transfer based on that argument and said the request threatened an “unprecedented and unworkable standard for motions to transfer.”

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