The EPA Supreme Court decision could put the DOL rule in the crosshairs

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She cited that agency’s release earlier this year of Compliance Assistance Release 2022-01, a document for 401(k) plan trustees that urges them to “exercise extreme caution” before considering cryptocurrency as an investment option in Select plan menus.

ForUsAll Inc., a 401(k) plan administrator that offers cryptocurrency to participants through a self-directed brokerage window, filed a lawsuit against the DOL on June 2 to overturn this guidance.

“For example, one argument in this complaint is that the DOL singled out an asset class for special negative treatment, even though the Employee Retirement (Income) Security Act does not give the DOL the authority to do so. That argument seems stronger today,” Ms. Buckmann said.

“This is the most recent example, although other measures, such as investment advice rules related to rollovers or other DOL policies that have potentially broad implications, may also be vulnerable,” she added.

The key question is whether certain regulations fall under the Major Questions doctrine, which states that administrative agencies must be able to rely on “unambiguous approval of Congress” when making decisions of far-reaching “economic and political importance”.

Joseph J. Torres, a Chicago-based partner at Jenner & Block LLP and chair of the firm’s ERISA litigation practice, said in an email that the basis of today’s decision could result in further consideration of the DOL.

“Like the EPA, many of the laws that the DOL is hoping for for its authority were passed long ago. As DOL seeks to regulate certain behaviors, today’s decision reminds us that the ‘big questions’ doctrine requires courts to consider whether the regulatory action involves an important policy decision that Congress should make in the first instance.” said Mr Torres.

Kevin L. Walsh, Washington-based director of the Groom Law Group, said in a phone interview that the ruling could affect how the DOL continues its recent emphasis on ERISA Section 404(a)-based rulemaking on fiduciary responsibility becomes.

“In light of this new Supreme Court precedent, one could say that the duty to act prudently does not give the DOL the authority to create new substantive responsibilities,” Mr. Walsh said.

Andrew L. Oringer, a New York-based partner in the ERISA and Executive Compensation Group at Dechert LLP, said in an email that the specifics of the Supreme Court’s case could mean that the decision is unlikely to favor ERISA- purposes would apply.

“However, I think the case reinforces judicial hostility to deference to administrative authorities, and Judge Gorsuch’s objection is, not surprisingly, additional evidence of that,” Mr Oringer said. Indeed, the DOL was caught up in this trend with the Fifth Circuit’s rejection of the amended escrow rule in the Chamber of Commerce decision, which was granted to the Trump administration. But regarding the specific applicability of the EPA case under ERISA, I suspect that the factual details in the EPA case might make this unlikely.

New York Comptroller Brad Lander said in a press release on Thursday that the decision “undermines the federal government’s ability to set critical standards for meaningful reductions in our greenhouse gas (GHG) emissions and to facilitate a just transition to a low-carbon economy.” “

Mr. Lander, the trustee of the five pension funds in the $265.9 New York City Retirement Systems, said: “We cannot address the magnitude of the risks that the climate crisis poses to our communities and the global economy without strong, concerted action by the federal government state and private enterprise.

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