88 F.4th 1115
5th Cir.2023Background
- The Securities and Exchange Commission (SEC) issued a rule requiring issuers to report share repurchase data quarterly and explain repurchase reasons.
- The Chamber of Commerce and related organizations petitioned for review, challenging this SEC rule.
- The Fifth Circuit previously found the SEC acted arbitrarily in mandating the rule without properly responding to comments or conducting a cost-benefit analysis, violating the Administrative Procedure Act (APA).
- The court granted a "limited remand," giving the SEC 30 days to correct the rule’s defects.
- The SEC failed to correct the defects or request more time before the deadline expired.
- The petitioners then moved to vacate the rule, and the court granted the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitrary and capricious action under APA | SEC failed to consider comments and do proper analysis | Worked diligently but needed more time | Rule was arbitrary; vacated |
| Proper cost-benefit analysis requirement | SEC did not perform proper cost-benefit analysis | Attempting to correct on remand | Rule vacated for lack of analysis |
| Appropriateness of vacatur versus remand | Remand insufficient; defects not remedied | Further time on remand warranted | Vacatur required; remand insufficient |
| Disruptive consequences of vacatur | No serious disruptive consequences present | Vacatur would be disruptive | No disruption found; vacatur appropriate |
Key Cases Cited
- Data Mktg. P’ship v. Dep’t of Lab., 45 F.4th 846 (5th Cir. 2022) (reiterating vacatur as the default remedy for arbitrary agency action)
- Texas v. United States, 50 F.4th 498 (5th Cir. 2022) (establishing criteria for remand without vacatur)
- United Steel, Paper & Forestry, Rubber Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union v. Mine Safety & Health Admin., 925 F.3d 1279 (D.C. Cir. 2019) (discussing vacatur standards for agency action)
- Nat. Resources Def. Council v. Wheeler, 955 F.3d 68 (D.C. Cir. 2020) (holding remand without vacatur inappropriate after notice-and-comment violations)