Public Citizen Defends the Fiduciary Rule Against Industry Lawsuits
By: Larry Bodine:
In April, the U.S. Department of Labor (DOL) issued a new rule – commonly known as the fiduciary rule – to protect workers saving for retirement from conflicted advice from their financial advisers. The U.S. Chamber of Commerce, the American Council of Life Insurers and a host of other corporate interests subsequently sued the DOL. One of their claims is that the rule is a content-based restriction on the commercial speech of their members and violates the First Amendment.
Today, Public Citizen filed an amicus brief (PDF) in support of the DOL in the U.S. District Court for the Northern District of Texas. The brief argues that industry’s First Amendment argument should be rejected because the fiduciary rule does not regulate speech; rather, it regulates the terms of a commercial or professional relationship and duties that attach to it.
The brief also demonstrates that even if the rule were a content-based commercial speech regulation, a long line of U.S. Supreme Court precedent, confirmed by recent decisions, demonstrates that regulation of commercial speech is not subject to strict scrutiny, even if the regulation differentiates between content of different types of speech. The rule should be upheld, Public Citizen argues.
Public Citizen has become increasingly concerned that corporate and commercial interests are promoting stringent applications of commercial-speech doctrine to stifle legitimate economic regulatory measures and protections for consumers. The plaintiffs’ position that strict scrutiny applies to content-based commercial speech regulations, if accepted by the court, would wrongly tilt the First Amendment balance against vital public safeguards.