National Association for Fixed Annuities v. United States Department of Labor
219 F. Supp. 3d 10
| D.D.C. | 2016Background
- NAFA challenged three DOL rules (including the BIC Exemption) addressing conflicts of interest for advisers to ERISA plans and IRAs; the district court previously denied NAFA’s preliminary injunction and granted summary judgment for the Department (NAFA I).
- After final judgment for defendants (entered Nov. 4, 2016), NAFA appealed and filed a renewed motion to stay the rules’ applicability (seeking a delay of 10 months to 2 years) and for expedited relief as to the April 20, 2017 and Jan. 1, 2018 applicability dates.
- The DOL argued a stay or injunction pending appeal was unwarranted; the court set an expedited briefing schedule and considered the four Winter factors for preliminary relief.
- The court applied both the post-Winter approach (requiring likelihood of success) and the pre-Winter sliding-scale framework, concluding NAFA fails under either standard because it is unlikely to succeed on the merits and has not shown extraordinary irreparable harm.
- The court found delaying the rules would risk ongoing economic harm to retirement investors, and that NAFA’s asserted industry harms (restructuring, agent departures, IMO failures) were speculative or mitigated by existing regulatory mechanisms (IMO petitions, contractual arrangements).
- The court granted NAFA’s request for expedited decision but denied the requested injunction staying the April 10/April 20, 2017 partial applicability date.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an injunction pending appeal should stay implementation of DOL fiduciary/conflict rules | NAFA: immediate relief needed to avoid irreparable industry restructuring, economic losses, and loss of meaningful appellate review | DOL: no stay warranted; rules protect investors from conflicted advice and delaying harms consumers; many alleged industry harms are speculative or manageable | Denied — injunction denied; NAFA unlikely to succeed and harms to public weigh against relief |
| Standard for injunctive relief after Winter | NAFA: sliding-scale still applicable; if other factors strongly favor relief, likelihood-of-success need not be high | DOL: Winter requires independent showing of likelihood of success | Court: considered both approaches; NAFA fails under either — it lacks likelihood of success and cannot show extraordinary irreparable harm |
| Irreparable harm from rules taking effect | NAFA: costs, lost business, agent departures, IMO failures, and restructuring are imminent and unrecoverable | DOL: alleged injuries are speculative; compliance costs foreseeable and do not overcome investor-protection interests | Held: NAFA’s evidence of irreparable injury is insufficiently certain and imminent; harms to investors outweigh NAFA’s claimed industry harms |
| Public interest and balance of equities | NAFA: public interest favors preserving industry and access for low/middle-income consumers | DOL: public interest favors protecting retirement investors from conflicted advice; agency complied with rulemaking | Held: balance favors DOL and retirement-investor protection; equities weigh against injunction |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (sets four-factor test for preliminary injunctions requiring likelihood of success, irreparable harm, balance of equities, and public interest)
- Sherley v. Sebelius, 644 F.3d 388 (D.C. Cir. 2011) (discusses sliding-scale approach to preliminary injunctions pre-/post-Winter)
- Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288 (D.C. Cir. 2009) (addresses likelihood-of-success requirement in injunctive relief analysis)
- League of Women Voters of United States v. Newby, 838 F.3d 1 (D.C. Cir. 2016) (observes unresolved status of sliding-scale test post-Winter)
- U.S. Telecom Ass'n v. FCC, 825 F.3d 674 (D.C. Cir. 2016) (deference to agency factual determinations in rulemaking)
- Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006) (describes high standard for demonstrating irreparable harm)
- Wisc. Gas Co. v. FERC, 758 F.2d 669 (D.C. Cir. 1985) (injury for injunction must be certain, great, actual, and not theoretical)
- In re Medicare Reimbursement Litig., 309 F. Supp. 2d 89 (D.D.C. 2004) (agency compliance with law is a public interest factor against preliminary relief)