ERISA litigation goes through phases and waves. It wasn’t that long ago that it seemed I was constantly litigating, in multiple cases, the distinction between so-called ministerial functions – which cannot support fiduciary liability – and fiduciary conduct. Here’s one example. Over time and a number of judicial decisions, an interpretative bulletin issued by the Department of Labor related to this issue was discussed and applied by enough courts that it effectively took on the force of law in some cases and, in others, at least became a shortcut for working through the issue. I always believed that this process by which the bulletin took on a judicial gloss and shine resulted, over time, in courts giving it too much persuasive weight.

In this interview with Bloomberg Law, I discussed the impact in litigation of a new advisory opinion by the Department, related to when an incentive compensation plan used by major financial institutions is or is not subject to ERISA. The article explains that the advisory opinion is on its way to winding through the courts to the Fourth Circuit. If the Fourth Circuit adopts its reasoning or conclusion, the opinion will be well on its way to repeating past history in which certain non-binding statements by the Department eventually take on the imprimatur of the courts and effectively become, at a minimum, highly persuasive authority to other courts addressing the issue.

Post-Loper, however, I don’t see that same process playing out here. If the Fourth Circuit agrees with the advisory opinion, the current state of play with regard to deference to agencies almost guarantees that the Court will present its opinion as its own analysis – and not as being heavily influenced, if at all, by the Department’s published opinion. I could see the advisory opinion being barely referenced in that circumstance, possibly simply dropped in passing into a footnote.

On the other hand, in the new, officially sanctioned post-Loper era of skepticism of agency action (I say officially sanctioned, because in truth, years of attacks on Chevron deference had long ago made it a dicey proposition to walk into court expecting a lack of skepticism over agency action, even though Chevron was still on the books at the time), if the Court finds that the plans are in fact subject to ERISA, which would be contrary to the advisory opinion, I could easily see the Court fully addressing and rejecting the reasoning and conclusion of the advisory opinion, in a manner intended to serve as persuasive authority on the question of its value.

Interesting times we live in, if you have long been involved with administrative regulation and related litigation.