On August 17, 2022, the U.S. Court of Appeals for the Fifth Circuit held that a Department of Labor (“DOL”) advisory opinion, which found that an insurance plan was not governed by ERISA, was unenforceable under the Administrative Procedure Act (“APA”). In doing so, the court ruled that the DOL advisory opinion constituted a “final agency action” subject to judicial review. The case is Data Marketing Partnership, LP v. Department of Labor, No. 20-11179, 2022 WL 3440652, __F. 4th __ (5th Cir. 2022).

By way of background, in 2018, Management Services, LLC (“Management Services”), the general partner of Data Marketing Partnership, LP (“Data Marketing”), applied for a DOL advisory opinion seeking a finding from the DOL that the health insurance plan it envisioned providing for limited partnerships was governed by ERISA as an “employee welfare benefit plan.” Absent such a finding by the DOL, the insurance plan would be governed by more restrictive state insurance mandates that limit rights of subrogation and reimbursement.

The following year, not having received the opinion, Management Services filed suit in the District Court for the Northern District of Texas, seeking a declaratory judgment that ERISA would apply and an injunction prohibiting the DOL from issuing an opinion to the contrary. Thereafter, the DOL issued an advisory opinion finding that ERISA would not govern the insurance plan because the limited partners were not sufficiently connected to the business to be...

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