Texas district court vacates DOL fiduciary rule

On March 12, 2026, the United States District Court for the Eastern District of Texas, in Federation of Americans for Consumer Choice v. United States Department of Labor (FACC v. DOL), granted plaintiffs’ motion that the DOL advice fiduciary rule and its related amendment to Prohibited Transaction Exemption 84-24 be vacated. Plaintiffs’ motion was not opposed by defendant DOL.

The court’s order puts an end (for the moment at least) to DOL’s 2024 effort to reform ERISA’s advice fiduciary rule.

In this note, we very briefly discuss the court’s (favorable) view of the merits of plaintiffs’ claims and what might possibly be next.

The court’s decision

We provide general background on DOL’s 2024 amendment to ERISA’s fiduciary advice rule here.

As recited in plaintiffs’ motion, the court identified three flaws/grounds for vacating DOL’s 2024 rule:

• [The elimination of] critical elements of the five-part test [we review the specifics of the five-part test here] and thereby capturing transactions that do not meet the relationship of trust and confidence standard contemplated by ERISA, including one-time recommendations to roll over assets from an ERISA Title I [employer-sponsored retirement] plan to an Individual Retirement Account (“IRA”).

• [The treatment of] any fee or other compensation received in connection with the sale of an investment product recommended by a financial professional as a fee for investment advice.

• [The imposition of] ERISA Title I duties [generally only applicable to employer-sponsored retirement plans] on IRA service providers and thereby ignoring the distinction between the DOL’s authority under Title I and Title II, the latter of which does not impose statutory duties of loyalty and prudence on IRA fiduciaries and does not give DOL authority to regulate IRA service providers.

What, if anything, is next?

As noted, with this decision, DOL’s 2024 effort at revising ERISA’s fiduciary advice rules ends. There remains, however, a question as to the status of DOL’s Prohibited Transaction Exemption (PTE) 2020-02, the preamble of which “re-interpreted” the five-part test to implement many of the changes it was seeking through regulation.

On July 9, 2025, the United States District Court Northern District of Texas issued an order in Federation of Americans for Consumer Choice v. United States Department of Labor, vacating that portion of the Department of Labor’s 2020 (re)interpretation of the “five-part test” as it applies to one-time advice with respect to a rollover transaction. But the court also held that:

• Unlike DOL’s regulation, ERISA itself does not require more than one incident of advice to trigger fiduciary status.

• Other problematic elements of DOL’s 2020 reinterpretation of the five-part test – including subjecting the “mutual agreement” and “primary basis” elements to a facts and circumstances analysis – do not conflict with either ERISA or the regulation.

The status of PTE 2020-02 after this most recent decision vacating DOL’s fiduciary advice regulation is (at best) unclear.

Finally, DOL has put on its regulatory agenda another revision of this rule. It’s unclear what priority, in the current Administration, this project will be given.

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We will continue to follow this issue.