DOL Secretary Scalia Cleared to Work on New Fiduciary Rule

Labor Secretary Eugene Scalia will be able to participate in drafting the department's new fiduciary rule, the Wall Street Journal reported Oct. 29.  

While he was a partner at the Gibson, Dunn & Crutcher law firm, Scalia served as counsel for the U.S. Chamber of Commerce appellants in litigation (U.S. Chamber v. DOL) that was ultimately successful in challenging the DOL’s attempt at rewriting the fiduciary rule. The 5th U.S. Circuit Court of Appeals vacated the rule in March 2018. 

The Journal reports (subscription required) that DOL Solicitor Kate O’Scannlain has determined that the department’s ethics rules do not preclude Scalia from participating in drafting the new rule because of his role in the U.S. Chamber litigation. “The new rulemaking is not a ‘particular matter involving specific parties,’ and litigation related to a prior rule which the secretary handled while in private practice has ended,” O’Scannlain said in a statement obtained by the Journal. O’Scannlain also stated that the Office of Government Ethics agrees with the DOL’s decision, the Journal reports.

At Scalia’s nomination hearing before the Senate Committee on Health, Education, Labor and Pensions on Sept. 19, Sen. Patty Murray (D-WA) questioned him about the DOL’s fiduciary rulemaking and asked whether he would recuse himself if confirmed. In response, Scalia noted that federal ethics rules would govern what he could work on and said that he would seek guidance from the “designated ethics officials” – i.e., the Solicitor – within the DOL.