David Fredrickson’s commentary was included in a Law360 article analyzing the impact of the U.S. Supreme Court’s decision to overturn the Chevron doctrine on the financial regulatory space. David provides his insight on how challenges to Securities and Exchange Commission regulations may be affected by the end of the Chevron doctrine.
David tells Law360 that Chevron deference hasn't figured prominently in the SEC's past defense of its rules. Instead, the legal questions the agency typically faces for its rules include whether they were enacted arbitrarily and capriciously, whether the agency has adequately explained the basis for the rules, and whether there was an infringement of First Amendment rights. He observed that the Chevron ruling would probably crop up in future arguments.
"If I'm litigating against the SEC, and I previously had six arguments, of course, I will add the seventh that the SEC is not entitled to any Chevron deference, just for good measure," David said. "Whether that seventh argument will change outcomes — I think probably not, but good lawyers bring all the arguments they can make." David added that while Chevron deference is less relevant to the SEC's controversial climate disclosure rule, for instance, it's more applicable to matters involving the definition of statutory terms. As one example, he pointed to the agency's decision to bring proprietary trading firms and some hedge funds under its authority as securities dealers, since the agency is aiming to broaden the definition of a dealer.
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