Market Participants File Opposition to CFTC’s Motion to Delay Judgment in Lawsuit Challenging CFTC Cross-Border Guidance

The ISDA, SIFMA and the Institute of International Bankers (“IIB”) (together, the “Associations”) filed an opposition to the CFTC’s motion for the Court’s delay in ruling on their amended complaint against the CFTC.  The Association’s amended complaint asserts that the CFTC Interpretive Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations (“Cross-Border Rule”) and related actions were issued in violation of the Administrative Procedure Act (“APA”).  In particular, the complainants allege that, in issuing the guidance, the CFTC failed to consider cross-border application consistent with the APA and the CEA, failed to respond to comments on cross-border application, and failed to weigh the costs and benefits of its guidance.

Along with filing an amended complaint on December 30, 2013, the Associations submitted to the Court a procedural motion seeking expedited consideration of a motion for summary judgment.  On the same day, the CFTC filed a motion to delay the Association’s motion for summary judgment, arguing that review of the motion should be delayed “for months” while the CFTC briefs a motion to dismiss.

According to the CFTC, their yet-to-be-filed motion to dismiss would be premised largely on the assertion that trade associations’ members may lack standing to challenge those regulations.  Additionally, the CFTC stated, the dismissal is based on the theory that the Cross-Border Rule is not a substantive rule and, therefore, neither final “nor ripe for challenge.”

According to the Associations’ opposition to the CFTC’s motion to delay, however, it has been made clear by the D.C. Circuit in Sierra Club v. EPA that the argument that the Associations lack standing to challenge the CFTC regulations is meritless, since there is little question that the Associations will be negatively affected by the agency’s action.  Additionally, the Associations’ claim that the CFTC’s argument that the Cross-Border Rule is not substantive, final, or “ripe for challenge” is “inextricably intertwined with the very issues briefed in Plaintiffs’ summary judgment motion,” and also note that the Cross-Border Rule is an extension of Dodd-Frank Title VII Rules – substantive rules which are both final and ripe for challenge.

The ISDA, SIFMA and the IIB therefore stated that the Court should reject the CFTC’s “delaying tactics” and move forward with the Associations’ original motion for summary judgment consistent with their proposed expedited schedule. 

See: SIFMA Opposition to CFTC Motion to Hold in Abeyance.
See also: CFTC Motion to Hold in Abeyance; SIFMA Motion for Expedited Consideration of Summary Judgment; SIFMA v. CFTC Amended Complaint; SIFMA Motion for Summary Judgment; SIFMA v. CFTC Civil Docket.
Related news: Market Participants File Amended Complaint Challenging CFTC Cross-Border Guidance (January 8, 2014); Market Participants File Lawsuit Challenging CFTC Cross-Border Guidance for Being a Rule Adopted in Violation of the APA (December 4, 2013); CFTC Commissioner O’Malia Dissents from CFTC Cross-Border Guidance Statement (July 19, 2013); CFTC Approves Cross-Border Guidance and Exemptive Order (July 15, 2013).

 

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