691 F.Supp.3d 14
D.D.C.2023Background
- In March 2022 EBSA (DOL) issued a Compliance Assistance Release cautioning 401(k) plan fiduciaries about offering cryptocurrency investment options and announcing an investigative program.
- ForUsAll, a retirement-plan service provider that planned to offer crypto via self-directed brokerage windows, alleges ~1/3 of prospective plan partners backed out because of the Release.
- ForUsAll sued under the Administrative Procedure Act, claiming the Release violated the notice-and-comment requirement (5 U.S.C. § 553) and was arbitrary, capricious, and beyond the Department’s authority (5 U.S.C. § 706).
- The Department moved to dismiss, arguing ForUsAll lacks Article III standing and that the Release is not final agency action subject to APA review.
- The district court granted the Department’s motion: ForUsAll lacks redressable injury (standing) and the Release is non-final/advisory, so no APA cause of action lies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing — causation & redressability | ForUsAll: DOL Release caused plans to stop negotiations; vacating/injunction would restore business. | DOL: Any third-party decisions break causation and, even if caused, relief would not likely change third-party behavior (not redressable). | Court: Causation pleaded sufficiently, but redressability fails—relief unlikely to alter fiduciaries’ independent decisions. Dismissal for lack of standing. |
| Final agency action (Bennett test) | ForUsAll: Release speaks for the Department and changes legal obligations (creates ‘‘extreme care’’ standard; implicates brokerage-window duties), so it is final. | DOL: Release is advisory, nonbinding, and initiates further review—no consummation and no direct legal consequences. | Court: Release is non-final; it neither consummates agency decisionmaking nor imposes binding legal consequences. APA claim fails. |
| Notice-and-comment (5 U.S.C. § 553) | ForUsAll: Release imposed new substantive rules without notice-and-comment. | DOL: Release is guidance/advisory and not a rule requiring notice-and-comment. | Court: Did not reach merits after disposing on standing and finality; analysis of finality undermines the §553 claim. |
| Arbitrary and capricious / exceeding authority (5 U.S.C. § 706) | ForUsAll: Release arbitrarily raised the prudence standard and expanded fiduciary duties over brokerage windows. | DOL: Release reiterated existing law, used colloquial emphasis (“extreme care”), and did not create new obligations. | Court: Did not reach merits; concluded Release did not change legal obligations—which supports non-finality—so no APA cause of action. |
Key Cases Cited
- Bennett v. Spear, 520 U.S. 154 (1997) (two-part test for final agency action)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing burden and requirements)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (injury-in-fact standard for standing)
- Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930 (D.C. Cir. 2004) (third-party regulated actors and redressability)
- Renal Physicians Ass’n v. U.S. Dep’t of Health & Hum. Servs., 489 F.3d 1267 (D.C. Cir. 2007) (vacatur of guidance may not redress injuries tied to underlying law)
- Holistic Candlers & Consumers Ass’n v. Food & Drug Admin., 664 F.3d 940 (D.C. Cir. 2012) (warning letters as non-final, advisory action)
- Indep. Equip. Dealers Ass’n v. EPA, 372 F.3d 420 (D.C. Cir. 2004) (informational/advisory letters not final)
- Hawkes Co. v. U.S. Army Corps of Eng’rs, 578 U.S. 590 (2016) (finality and legal consequences inquiry)
- Nat’l Mining Ass’n v. McCarthy, 758 F.3d 243 (D.C. Cir. 2014) (pragmatic inquiry into legal consequences of agency action)
- Ciox Health, LLC v. Azar, 435 F. Supp. 3d 30 (D.D.C. 2020) (guidance that effectively changes regulatory obligations may be redressable)