Dodd-Frank, One Year Later: A Primer On The Federal Rulemaking Process

Monday, August 1, 2011 - 01:00

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank" or "the Act"), which was passed in direct response to the global financial crisis.1Just one year later, that Act - representing the most comprehensive package of reforms since the Great Depression - has already begun altering the regulatory landscape for banks, investment funds, securities firms, and publicly listed companies outside the financial sector. But the most significant changes are yet to come. Although the Act spans well over 2300 pages, Congress delegated many of the details of regulatory reform to nearly a dozen federal agencies that must develop specific rules to implement Congress's broad mandates.2In fact, the Act requires the agencies to promulgate nearly 400 regulations3within various statutory timelines ranging from one day to five years.4The agencies have failed to meet many of the deadlines set for one year after the Act's passage.5At present, fewer than 50 of the final rules have been issued - meaning that financial regulators will be extremely busy over the next 12-24 months.6

Because rules promulgated by federal agencies implementing Dodd-Frank will have the force of law,7the federal rulemaking process is arguably as important to regulated companies as the initial legislative process that led to the Act itself. This article outlines relevant aspects of the rulemaking process, highlighting in particular the steps agencies take in proposing and finalizing regulations, how interested persons may participate in various stages of the process, and some options parties may have for challenging a final rule and its application before an administrative law judge or a federal court.

How Do Federal Agencies Make Rules?

The Administrative Procedures Act of 1940 ("APA") governs federal agency rulemaking. Under the APA, there are two types of rulemaking. The first kind - formal rulemaking - involves trial-like procedures including a legislative hearing with witness testimony and written briefs from interested parties. The second kind - informal rulemaking - is commonly referred to as "notice-and-comment" rulemaking. Informal rulemaking requires the agency to give notice of a proposed rule in the Federal Register, allows interested persons to respond to the proposed rule, and is generally completed when the agency publishes the final rule in the Federal Register.8As a practical matter, formal rulemaking is now extremely rare, and the vast majority of rulemaking (including all Dodd-Frank regulations) is carried out through the "notice-and-comment" process. Despite it being known as the "informal" process, agencies are nonetheless required to satisfy a number of demands to ensure a notice-and-comment rulemaking complies with the APA.

To satisfy the informal rulemaking procedures under the APA, agencies may be required to evaluate a proposed rule's impact and to prepare a written report analyzing overall economic costs and benefits, the extent of new paperwork and information collection requirements, and the impact on small business and private property rights, among other effects. Prior to publishing a proposed rule in the Federal Register, an agency may issue and accept comments on an Advanced Notice of Proposed Rulemaking or establish a negotiated rulemaking committee. This is often the case where a given regulation is likely to be controversial or have a significant impact on a given industry sector. It therefore should be no surprise that in proposing the rules for the designation of systemically important nonbank financial companies under Dodd-Frank, the Financial Stability Oversight Council first issued an Advance Notice of Proposed Rulemaking.9

Furthermore, Dodd-Frank itself imposes hurdles on certain agency rulemaking. For example, the Act established a new federal agency, the Consumer Financial Protection Bureau ("CFPB"), and granted the CFPB rulemaking authority to implement various consumer financial laws.10In order to promulgate a rule, however, Dodd-Frank requires the CFPB to analyze the rule's costs and benefits for consumers as well as its broader economic impact.11Moreover, Dodd-Frank mandates that the CFPB "shall issue a notice of proposed rulemaking whenever a majority of the States has enacted a resolution in support of the establishment or modification of a consumer protection regulation issued by the CFPB."12

Notice: Publication of a Proposed Rule

The first step in notice-and-comment rulemaking occurs when the agency gives notice of its proposed rule by publishing in the Federal Register the anticipated text of the rule and information on the time, place, and nature of any public proceedings for consideration of the proposed rule.13Agencies also may publish several alternatives to a proposed rule that are under consideration.14

Impact Analysis and OIRA Review

Next, for certain rules - including those deemed "economically significant" -the agency must conduct an impact analysis of a proposed rule that becomes part of the rulemaking record.15An "economically significant" rule is one that is estimated to have an economic impact greater than $100 million in any one year,16and given the wide reach of many of Dodd-Frank's provisions, many rules promulgated under the Act likely will be subject to these requirements. In particular, an agency proposing or enacting an economically significant rule must submit a cost-benefit assessment to the Office of Information and Regulatory Affairs ("OIRA") before submitting it to the Federal Register.17Reviews by OIRA also are mandatory for those rules that are projected to have certain adverse effects on the economy, and must be completed within 90 days of publication of the proposed rule with the option of a single 30-day extension.18Should an agency and OIRA disagree over the ultimate utility of a proposed rule, the President must decide the final outcome.19

Comment Period

After publishing a proposed rule, an agency must allow a "reasonable" amount of time for written comments by the public.20In almost all cases, the comment period lasts at least 30 days and may last much longer depending on the complexity of the proposed rule.21Those agencies implementing Dodd-Frank have typically allowed 60 days for comments, recognizing the significant issues at stake.22Any interested party may submit comments to proposed rules in writing to the agency via the agency's webpage, via e-mail to that agency, or on the Federal eRulemaking Portal: www.regulations.gov. Paper copies of comments may also be submitted by courier or hand delivery to the federal agency promulgating the rule. Any interested person may petition for the issuance, amendment, or repeal of any rule.23

Replies to comments also are permitted. Because the most prevalent method of commenting today is online, it is common to see "threads" of comments on specific issues raised in a proposed rule. For example, both the Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC") seek public comments online in connection with proposed rules under Dodd-Frank.24Even after the official comment period expires, some agencies may permit interested persons to reply to earlier comments for a specified time.25Parties should be forewarned, however, that agencies may (and often do) strictly enforce the deadlines for comment.26

Each agency must maintain records of its rulemaking process, including all notices of each proposed rule, copies of materials consulted by the agency in formulating a given proposed rule, and written comments received by the agency. All comments made to a proposed rule ordinarily become part of the agency's rulemaking record and are available for public inspection.27Many agencies have created public, internet-accessible rulemaking dockets that include all public comments.28In that respect, the process under Dodd-Frank has been no different.29

The agency rulemaking records that are available for public inspection, however, are limited to those files required to be disclosed under the Freedom of Information Act ("FOIA"). Consequently, an interested party may submit its comments confidentially by seeking the application of a FOIA exemption concurrently with submission of a comment. For example, one FOIA exemption safeguards "trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential."30In addition, several agencies have procedures in place to protect against the disclosure of confidential business information contained in comments and may permit commenters to designate information as confidential at the time of submission to prevent them from entering the public record.31Depending on the agency, the record associated with a proposed rule may or may not reflect the omission of certain comments by reason of confidentiality.32

The APA also permits other forms of feedback on a proposed rule, including face-to-face efforts and other informal contacts with regulators during the rulemaking process.33Indeed, the U.S. Court of Appeals for the D.C. Circuit has stressed that the role of informal contacts "cannot be underestimated . . . [since they] may enable the agency to win needed support for its program, reduce future enforcement requirements by helping those regulated to anticipate and shape their plans for the future, and spur the provision of information which the agency needs."34Moreover, U.S. Senators and Representatives may influence the rulemaking process by advocating in favor of their constituents during a comment period and by offering agencies their views on what aims Congress had hoped to achieve under the authorizing legislation.35Interestingly, this trend began even before Dodd-Frank was formally enacted - with a letter written by then-Senators Christopher Dodd and Blanche Lincoln in June 2010 intending to clarify Congress's position on the exemption for commercial end-users of over-the-counter swaps.36

Publication of a Final Rule

Once the notice-and-comment period has finished, an agency will publish in the Federal Register the final version of the rule, along with the agency's statement on the rule's basis, justifications, purpose, and underlying legal authority. The rule subsequently will be codified in the Code of Federal Regulations. Because many rules promulgated under Dodd-Frank may have considerable consequences, the agency's explanatory statement must demonstrate that the agency thoroughly considered significant alternatives to its final rule, important public comments, and relevant information, as well as explain the reasoning behind the agency's rejection of any of the aforementioned.37Lastly, the final rule must be a "logical outgrowth" of the proposed rule; if it is not, then a second notice-and-comment period is required.38

By way of an example, the SEC published in June 2011 the final version of the "Family Office Rule" in the Federal Register pursuant to Section 409 of Dodd-Frank.39In so doing, the SEC described the 90 public comments it received, potential alternatives to the rule, and why it believed such alternatives were not appropriate substitutes.40Additionally, the SEC included a summary of the cost-benefit analysis of the rule and a Final Regulatory Flexibility Analysis.41The measures the SEC took to explain its issuance of the Family Office Rule will help to ensure and illustrate that the rule is a "logical outgrowth" of the regulation as initially proposed.

Effective Date of a Rule

Generally, a rule becomes effective 30 days after its publication in the Federal Register.42For economically significant rules - including many of the rules to be promulgated under Dodd-Frank - the period doubles to 60 days, and the agency must submit a copy of the rule, the official explanatory statement, and certain supporting documentation to both houses of Congress and the Comptroller General of the United States.43Unless Congress enacts a joint resolution disapproving the rule, economically significant rules will become effective at the end of the 60-day period.44As a practical matter, Congress has enacted such a resolution only once in the 65 years since the enactment of the APA.45Congress therefore is unlikely to disapprove any Dodd-Frank rules through joint resolution.

Challenging A Final Rule

The final venue for influencing Dodd-Frank rules or their application is either an administrative appeals tribunal or the federal judicial system. If necessary to prevent irreparable injury, a court may enjoin application of a rule or postpone its effective date to preserve the status quo and rights pending conclusion of the review proceedings.46An agency itself also may postpone the effective date of a rule pending judicial review if the agency finds that justice requires it.47Additionally, a rule may be ripe for judicial review upon promulgation and before enforcement if the issues are fit for judicial review and the party seeking review would suffer substantial hardship if review were delayed until after enforcement.48A number of rules issued under Dodd-Frank are likely to be challenged before they even go into effect - particularly those requiring burdensome capital, liquidity, reporting, and other requirements - when the agency appears to have failed in articulating a strong empirical basis for such measures. In all other cases, however, a party subject to a rule must await agency enforcement before challenging it.49What is more, a facial challenge to a rule may be hard to sustain from a practical standpoint, and the reasonableness of a given regulation under Dodd-Frank may not become questionable until it is actually administered with respect to a given bank, securities firm, fund, or other company.

Administrative Challenge

In light of the administrative exhaustion requirements noted above, the typical first step for a party seeking to challenge an agency's action is the administrative appeal process. An agency's appeal process generally requires the aggrieved party to file a petition with the agency and possibly attend a hearing regarding the party's challenge to the rule's application.50Upon conclusion of the hearing, agencies typically have a neutral decisionmaker - ordinarily an administrative law judge - issue a written opinion containing findings of fact and legal analysis relevant to the specific circumstances of the case.51In the event the agency does not respond to a challenging party's argument against the application of the rule, a court reviewing the decision on further appeal may remand the case to the agency for an explanation.52

Court Challenge

A person or entity affected by application of a Dodd-Frank resolution also can seek court review of the rule because of the "strong presumption that Congress intends judicial review of administrative action."53Additionally, Congress may provide for a court's pre-enforcement review of certain regulations.54In such cases, after the promulgation of the final rule, challenges typically must be filed within the time limit that Congress provides in any applicable statute.55Further, a prerequisite for effectively challenging application of a rule is that the challenger must have an actual injury that is concrete and materialized, such as economic harm.56The challenging party must prove that its injury was caused by enforcement of the agency's rule and establish that it is likely the injury will be redressed by a favorable decision of the court. A key component of these pre-enforcement cases often involves convincing the reviewing court that it has jurisdiction over the objecting parties' claims, i.e. , that the specific Dodd-Frank rule caused actual, material harm to a regulated entity. In other cases, the parties must demonstrate that the agency undertook specific action that led to the injury.57

Appeals of rules enacted pursuant to Dodd-Frank will undoubtedly become more common as the rulemaking process nears completion and agencies begin enforcing new financial regulations. In order to ensure the ripeness of a challenge to a Dodd-Frank rule, parties must: (1) file the challenge within the specified time limit; (2) establish an actual injury, concrete and materialized; (3) demonstrate the injury can be traced to the agency's rule; (4) show the injury is redressable by a favorable court decision; and (5) ensure the reviewing court has jurisdiction.

Importance of the D.C. Circuit

No discussion of federal rulemaking should fail to highlight the unique role played by the U.S. Court of Appeals for the D.C. Circuit. In order to appeal an agency's decision in a dispute after application of a rule promulgated under Dodd-Frank, the challenging party must look to the agency's enabling statute to see where venue is proper as prescribed by Congress.58For example, the SEC's enabling statute permits any aggrieved party to obtain review in the D.C. Circuit.59The same is true for the CFTC.60Dodd-Frank itself requires certain challenges to be brought before the D.C. Circuit. For example, if a party wishes to challenge the Treasury Secretary's invocation of the Orderly Liquidation Authority, Title II of the Act specifically provides the D.C. Circuit with jurisdiction to hear the matter.61The D.C. Circuit has historically heard many challenges to regulations because of its subject-matter expertise and because it often has specific statutory jurisdiction to hear appeals from federal agencies.62

Parties should keep abreast of trends in that court in order to increase the likelihood that their challenges will succeed. In one recent case, for example, the D.C. Circuit upheld the EPA's refusal to consider evidence and arguments submitted to the agency during a secondary review period when the evidence and arguments "could have been but were not submitted" by the parties during the initial period for comment.63The court "agree[d]" that the agency had "broad discretion to 'fashion [its] own rules of procedure'" and emphasized that the court would not consider "an argument the agency was not given a fair opportunity to consider during the rulemaking."64The D.C. Circuit's decision in this case highlights the critical need for parties to study and follow all agency-specific rules of procedure, offer comments early in the Dodd-Frank rulemaking process, and frame arguments before an agency in the same way the parties intend to present those challenges to a reviewing court.

Evaluating an Agency's Factual Determinations

Because a factual record is developed during the administrative law hearings deciding the propriety of regulatory action, a reviewing court has no need to, and will not, engage in fact-finding on appeal.65Courts instead apply an "arbitrary and capricious" standard in evaluating an agency's application of a rule.66In essence, the arbitrary and capricious standard evaluates whether an agency's decision in applying a rule was based on consideration of the relevant factors and whether there has been a clear error in judgment.67More specifically, a reviewing court will consider whether the agency examined recent data and articulated a satisfactory explanation of its action - including a "rational connection" between the facts found and choice made.68The absence of an explanation for enacting a rule would be a prima facie example of arbitrary and capricious rulemaking.69And while a court will make a searching and careful inquiry of the facts as they relate to the agency's justification for the rule, parties seeking to challenge Dodd-Frank rules must keep in mind that this is a narrow scope of review that is highly deferential to the agency.70

The court will not, however, defer to justifications the agency itself did not offer. In considering a challenge to an agency's action, a reviewing court will permit the agency to introduce only the administrative record that was actually before the agency at the time of action and will not permit after-the-fact rationalization.71Furthermore, the court will review the entire factual record, not merely evidence supporting the agency's decision.72Consequently, if there are points and arguments the agency left unaddressed in its consideration of a party's challenge to a rule, the court might remand the final rule for further consideration.73

Evaluating an Agency's Legal Interpretations

In deciding appeals of agency action, courts evaluate an agency's legal interpretation of a statute, such as Dodd-Frank, using a two-part test known as Chevron review.74First, a reviewing court will consider whether Congress gave a direct instruction regarding the precise question at issue.75If Congress's intent is clear, then the court, as well as the agency, must give effect to the unambiguously stated intent of Congress. Second, if Congress's intent is unclear and the statute is silent or ambiguous with respect to a specific issue, then the reviewing court will examine whether the agency's rule is based on a permissible or reasonable construction of the statute.76In the present context, therefore, a reviewing court may not substitute its own interpretation of Dodd-Frank for that of the agency so long as the agency's construction of the Act is reasonable.77Furthermore, a challenge to a final rule will fail if it focuses on the wisdom of the agency's policy rather than whether the agency's policy is reasonable within the gap left open by Congress.78This is an important point. A final rule under Dodd-Frank and an agency's application of it may be far from optimal. Nevertheless, a court will invalidate it only if the agency strays beyond the boundaries of reasonableness.

Dodd-Frank represents an important milestone in the government's effort to achieve major reforms of the U.S. financial system, but the Act itself is really little more than a first step. As the Act celebrates its one-year anniversary, details of the implementing regulations are still being debated through the federal rulemaking process. Interested parties who will be subject to rules implementing Dodd-Frank's provisions have a unique opportunity to shape how the Act will translate into a new regulatory framework that could last for half a century. Through advocacy during the rulemaking process or legal challenges after agency enforcement of the new rules, interested parties can shape the impact Dodd-Frank will have on various segments of the economy. Indeed, given the broad strokes with which Congress legislated in Dodd-Frank - leaving the overwhelming majority of the critical details to the regulators - such advocacy and challenges will undoubtedly become as important in shaping the Act's consequences as the text of the legislation itself. The overall lesson is clear: interested parties should not remain silent as financial regulators work diligently over the next few years to issue the hundreds of rules necessary to implement Dodd-Frank. 1 Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376-2223 (2010).

2 Those agencies responsible for rulemaking include the Federal Reserve Board, Federal Deposit Insurance Corporation, Securities and Exchange Commission, Commodity Futures Trading Commission, Office of the Comptroller of the Currency, National Credit Union Administration, the Federal Housing Finance Agency, a new regulatory agency called the Bureau of Consumer Financial Protection, and a new risk regulator called the Financial Stability Oversight Council, which comprises the heads of the aforementioned agencies and is chaired by the Treasury Secretary.

3 See generally Dodd-Frank Act, Pub. L. No. 111-203, 124 Stat. 1376-2223; see also Shirley Gao, US, EU Banking Coordination Needed to Avoid Race to the Bottom, The National Law Review (June 3, 2011), http://www.natlawreview.com/article/us-eu-banking-coordination-needed-to-avoid-race-to-bottom ("Dodd-Frank requires some 387 regulations to be written by 20 different regulatory agencies . . . .").

4 See, e.g., Dodd-Frank, Pub. L. No. 111-203, 124 Stat. 1376-2223, §§ 4, 619 (2010).

5 Aline van Duyn, Dodd-Frank: regulators likely to miss July target, FinancialTimes.com, May 3, 2011, available at http://www.ft.com/cms/s/0/80251596-75ac-11e0-80d5-00144feabdc0.html#ixzz....

6 Dodd-Frank Regulatory Reform Rules: Final Rules and Notices, Federal Reserve Bank of St. Louis, http://www.stlouisfed.org/regreformrules/final.aspx (last visited July 12, 2011).

7 See United States v. Mead Corp., 533 U.S. 218, 226-27 (2001) (stating that "administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law") (discussing Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)).

8 Administrative Procedure Act § 553, 5 U.S.C. § 553 (2011).

9 Advance Notice of Proposed Rulemaking Regarding Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies, 75 Fed. Reg. 61653 (Oct. 6, 2010); see also Authority To Require Supervision and Regulation of Certain Nonbank Financial Companies, 76 Fed. Reg. 4555 (proposed Jan. 26, 2011) (to be codified at 12 C.F.R. pt. 1310) (available at http://www.stlouisfed.org/regreformrules/Pdfs/2011-1 26_FSOC_Supervision_nonbank_financial_companies.pdf).

10 Dodd-Frank Act § 1001.

11 Id. at § 1022.

12 Id. at § 1041(c).

13 Administrative Procedure Act, § 553(b), 5 U.S.C. § 553(b) (2011).

14 Jeffrey S. Lubbers, A Guide to Federal Agency Rulemaking 291 (4th ed. 2006).

15 Exec. Order No. 12,866 § 3(f)(1), 3 C.F.R. 638 (1994).

16 Id.

17 Id. § 6(c).

18 Id. § 3(f).

19 Id. § 7.

20 Administrative Procedure Act, 5 U.S.C. § 553.

21 See, e.g., Exec. Order No. 12,866 § 6(a)(1) (noting that the comment period for an informal rulemaking should be "in most cases . . . not less than 60 days").

22 See, e.g., Broker-Dealer Reports, 56 Fed. Reg. 37,572 (proposed Jun. 27, 2011) (to be codified at 17 C.F.R. pts. 240, 249) (available at http://www.sec.gov/rules/proposed/2011/34-64676.pdf) (demonstrating that the comment period lasts until August 26, 2011, 60 days after publication in the Federal Register); Resolution Plans and Credit Exposure Reports Required, 76 Fed. Reg. 22648 (proposed Apr. 22, 2011) (to be codified at 12 C.F.R. pts. 252, 381) (available at http://www.stlouisfed.org/regreformrules/Pdfs/2011-4-22_FDIC-FRS-Resolut...).

23 Exec. Order No. 12,866 § 6(a)(1).

24 SEC, SEC Proposes Ways to Strengthen Audits and Reporting of Broker-Dealers to Protect Customer Assets, http://www.sec.gov/news/press/2011/2011-128.htm (last visited July 7, 2011); see also Commodity Futures Trading Commission, Comments for Proposed Rule 76 FR 35372, http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1044 (last visited July 7, 2011).

25 Lubbers, supra note 13, at 278-79.

26 Id.; see, e.g., 20 U.S.C. § 1232(b) (mandating a 30-day comment period for regulations promulgated by the Department of Education).

27 Lubbers, supra note 13, at 220.

28 Id.; see, e.g., Regulations.gov, www.regulations.gov (last visited July 8, 2011) (posting comments and regulations of over 300 agencies in online portal).

29 See, e.g., SEC, SEC Proposed Rules, http://www.sec.gov/rules/proposed.shtml; CFTC, Dodd-Frank Proposed Rules, http://www.cftc.gov/LawRegulation/DoddFrankAct/Dodd-FrankProposedRules/index.htm; FDIC, FDIC Federal Register Citations, http://www.fdic.gov/regulations/laws/federal/propose.html; Board of Governors of the Federal Reserve System, 2011 Banking and Consumer Regulatory Policy, http://www.federalreserve.gov/newsevents/press/bcreg/2011bcreg.htm.

30 5 U.S.C. § 552(b)(4).

31 Lubbers, supra note 13, at 331-33.

32 Id. at 332.

33 See Lubbers, supra note 13, at 331-33 (citing 5 U.S.C. §§ 557(d)(1), 551(14)).

34 Sierra Club v. Costle, 657 F.2d 298, 401 (D.C. Cir. 1981).

35 See Gravel v. U.S., 408 U.S. 606, 625 (1972) ("Members of Congress are constantly in touch with the Executive Branch of the Government and with administrative agencies - they may cajole, and exhort with respect to the administration of a federal statute [.]").

36 See Letter from Chairman Christopher Dodd, Senate Committee on Banking, Housing, and Urban Affairs, & Chairman Blanche Lincoln, Senate Agriculture, Nutrition, and Forestry Committee, to Chairman Barney Frank, U.S. House of Representatives Financial Services Committee, & Chairman Colin Peterson, U.S. House of Representatives Committee on Agriculture on Dodd-Frank (June 30, 2010) (available at http://online.wsj.com/public/resources/documents/dodd-lincoln-letter 070110.pdf).

37 See, e.g., Family Office Rule, 17 C.F.R. § 275 (2011) (codifying an SEC rule issued under Dodd-Frank).

38 See Long Island Care at Home, Ltd., v. Coke, 551 U.S. 158, 174 (2007). The Supreme Court has adopted the Court of Appeals' interpretation of the APA requirement that agencies publish the terms and substance of a proposed rule to ensure that "the final rule the agency adopts [is] a 'logical outgrowth' of the rule proposed." Id. (citing Nat'l Black Media Coalition v. FCC, 791 F.2d 1016, 1022 (2d Cir. 1986)).

39 Family Office Rule, 17 C.F.R. § 275 (2011) (exempting from regulation certain "family offices" from the Investment Advisers Act of 1940).

40 Id.

41 Id.

42 5 U.S.C. § 553(d).

43 See id. §§ 801-804.

44 Id. § 801(a)(3); Lubbers, supra note 13, at 368-40.

45 See Lubbers, supra note 13, at 190-91 ("[S]o far, only one rule has been disapproved and few resolutions of disapproval have ever been introduced.").

46 5 U.S.C. § 702.

47 See Lubbers, supra note 13, at 367-68.

48 See Abbot Labs. v. Gardner, 387 U.S. 136, 148-49 (1967).

49 Id.

50 See, e.g., Federal Trade Commission, Requests for Additional Information: Appeals Procedure, http://www.ftc.gov/bc/hsr/appeal~1.shtm (last visited July 8, 2011) (describing the steps a party must take to initiate the FTC's appeal process: (1) filing a written petition; (2) attending a conference with the General Counsel on a date set after the FTC's receipt of the petition).

51 See Fed. Maritime Com'n v. S.C. State Ports Authority, 535 U.S. 743, 756-57 (2002); Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 655-56 (1990).

52 Metro. Stevedore Co. v. Rambo, 521 U.S. 121, 140 (1997).

53 Bowen v. Mich. Acad. of Fam. Physicians, 476 U.S. 667, 670 (1986).

54 See Abbot Labs., 387 U.S. at 148-149.

55 If the statute, such as Dodd-Frank, does not provide a time limit, typically challenges to agency rules must be brought within the six-year statute of limitations applying to civil actions against the United States established by 28 U.S.C. § 2401(a). See Lubbers, supra note 13, at 456 n.215; see also Solid Waste Agency v. U.S. Army Corps of Eng'rs, 191 F.3d 845, 853 (7th Cir. 1999).

56 See Ass'n of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150, 153-54 (1970).

57 Opp'n to Mot.s to Dismiss at 1, NetCoalition & Sec. Indus. & Fin. Mkts. Ass'n v. Sec. & Exch, Nos. 10-1421, 10-1422, 11-1001, 11-1065 (D.C. Cir. appeal docketed Dec. 28, 2010) (SEC arguing that its inaction with respect to the fee rules (that became effective immediately pursuant to Section 916 of Dodd-Frank) did not qualify as agency action subject to judicial review).

58 See, e.g., The Exchange Act of 1934, § 25(a)(1) ("A person aggrieved by a final order of the Commission entered pursuant to this title may obtain review of the order in the United States Court of Appeals for the circuit in which he resides or has his principal place of business, or for for the District of Columbia Circuit . . . .")

59 Id.

60 7 U.S.C. § 2(a)(1)(C)(v)(VI) (allowing "review only in the Court of Appeals where the party seeking review resides or has its principal place of business, or in the United States Court of Appeals for the District of Columbia Circuit.")

61 See Dodd-Frank Act, §§ 202, 203.

62 See, e.g., Patricia M. Wald, The Contribution of the D.C. Circuit to Administrative Law, 40 Admin. L. Rev. 507, 510 (1988).

63 Nat'l Corn Growers Ass'n v. EPA, 613 F.3d 266, 273 (D.C. Cir. 2010).

64 Id. at 272, 273 (quoting Vt. Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 534-44 (1978)).

65 See 5 U.S.C. § 706; see also Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42-43 (1983) (discussing the "arbitrary and capricious" standard of review).

66 Id. at 42-43.

67 See id.

68 See id. at 43.

69 Nw. Envtl. Def. Ctr. v. Bonneville Power Admin., 477 F.3d 688, 691 (9th Cir. 2007) (requiring "that an agency 'cogently explain why it has exercised its discretion in a given manner'") (citing Motor Vehicle Mfrs. Ass'n of U.S., Inc., 463 U.S. at 48).

70 See Nat'l Cable & Telecommc'ns Ass'n v. Brand X Internet Servs., 545 U.S. 967, 989-91 (2005) (noting courts' deference to agency factual decisions).

71 See Motor Vehicle Mfrs. Ass'n of U.S., Inc., 463 U.S. at 50 (rejecting post hoc agency reasoning).

72 See id. at 50-53.

73 See, e.g., Ne. Md. Waste Disposal Auth. v. EPA, 358 F.3d 936, 949-50 (D.C. Cir. 2004) (remanding to the EPA for an explanation of certain decisions and the establishment of new standards).

74 See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).

75 See id.

76 See id. at 843.

77 See id.

78 See id. at 843-844; Mayo Found for Med. Educ. & Res. v. United States, 131 S.Ct. 704, 713 (2011).

All three authors are Members of the Financial Regulatory Reform Working Group at the law firm of Weil, Gotshal & Manges, LLP. Michael Lyle is Managing Partner of the Firm's Washington office and is an experienced trial lawyer, having litigated many administrative law and other cases in federal court. Heath Tarbert is Senior Counsel in the Firm's Financial Institutions Regulatory Practice and previously served as Special Counsel to the U.S. Senate Banking Committee. Sunny Thompson is an Associate who focuses her practice on complex commercial litigation. The authors would like to thank Emily Bruemmer , Sarah Goodman , and Joe Santo for their research on this article.

Please email the authors at michael.lyle@weil.com, heath.tarbert@weil.com or sunny.thompson@weil.com with questions about this article.