XY PLANNING NETWORK, LLC, FORD FINANCIAL SOLUTIONS, LLC, STATE OF NEW YORK, STATE OF CALIFORNIA, STATE OF CONNECTICUT, STATE OF DELAWARE, STATE OF MAINE, DISTRICT OF COLUMBIA, STATE OF NEW MEXICO AND STATE OF OREGON, Pеtitioners, v. UNITED STATES SECURITIES AND EXCHANGE COMMISSION, WALTER CLAYTON, IN HIS OFFICIAL CAPACITY AS CHAIRMAN OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Respondents.
Docket Nos. 19-2886-ag(L), 19-2893-ag(CON)
United States Court of Appeals for the Second Circuit
August Term, 2019
(Argued: June 2, 2020 Decided: June 26, 2020)
SULLIVAN, PARK, AND NARDINI, Circuit Judges.
In 2019, the Securities and Exchange Commission promulgated Regulation Best Interest, which creates new standards of conduct for broker-dealers providing investment services to retail customers. Petitioners XY Planning Network, LLC, Ford Financial Solutions, LLC, and a group of states and the District of Columbia filed petitions for review under the Administrative Procedure Act,
Judge Sullivan concurs in part and dissents in part in a separate opinion.
JEFFREY A. BERGER (Robert B. Stebbins, Michael A. Conley, Daniel E. Matro, on the brief), Washington, DC, for Respondents United States Securities and Exchange Commission and Walter Clayton.
Attorney General Xavier Becerra, Matthew Rodriguez, Martin Goyette, Amy Winn, Nathaniel R. Spencer-Mork, San Francisco, CA for Petitioner State of California.
Attorney General William Tong, Joseph J. Chambers, Hartford, CT, for Petitioner State of Connecticut.
Attorney General Kathleen Jennings, Marion Quirk, Joseph E. Gibbs-Tabler, Jillian Lazar, Wilmington, DE, for Petitioner State of Delaware.
Attorney General Aaron M. Frey, Gregg D. Bernstein, Augustа, ME, for Petitioner State of Maine.
Attorney General Hector Balderas, Nicholas M. Sydow, Tania Maestas, Santa Fe, NM, for Petitioner State of New Mexico.
Attorney General Karl A. Racine, Loren L. AliKhan, Jacqueline R. Bechara, Graham E. Phillips, Washington, DC, for Petitioner District of Columbia.
Attorney General Ellen F. Rosenblum, Brian A. de Haan, Portland, OR, for Petitioner State of Oregon.
Todd M. Galante, Piro Zinna Cifelli Paris & Genitempo, LLC, Nutley, NJ, for Amicus Curiae Financial Planning Association in support of Petitioners.
Brianne J. Gorod, Ashwin P. Phatak, Elizabeth B. Wydra, Clare E. Riva, Constitutional Accountability Center, Washington, DC, for Amici Curiae Current and Former Members of Congress in support of Petitioners.
Dennis M. Kelleher, Better Markets, Inc., Washington, DC, for Amici Curiae Better Markets, Inc. and the Consumer Federation of America in support of Petitioners.
Adam J. Weinstein, Gana Weinstein LLP, New York, NY, for Amicus Curiae The Public Investors Arbitration Bar Association in support of Petitioners.
Jesse Panuccio, Jordan R. Goldberg, Boies Schiller Flexner LLP, Washington, DC, for Amici Curiae Representatives Ann Wagner, Andy Barr, J. French Hill, Blaine Luetkemeyer, and Senator Tom Cotton in support of Respondents.
Kelly P. Dunbar, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Amici Curiae the Securities Industry and Financial Markets Association, the Chamber of Commerce of the United States of America, the American Council of Life Insurers, and the Financial Services Institute in support of Respondents.
PARK, Circuit Judge:
Investment advisers and broker-dealers both offer financial services to retail customers. Under federal law, investment advisers owe a fiduciary duty to their clients, but broker-dealers do not. The traditional distinctions between the services offered by the two types of firms have blurred in recеnt decades, raising questions about this standard-of-care framework. As a result, in 2019, the Securities and Exchange Commission (“SEC“) adopted Regulation
Petitioners—an organization of investment advisers, an individual investment adviser, seven states,1 and the District of Columbia—now challenge Regulation Best Interest as unlawful under the Administrative Procedure Act (“APA“),
We thus hold that: (1) the individual investment-adviser petitioner has Article III standing to bring its petition for review, but the state petitioners do not; (2) Section 913(f) of the Dodd-Frank Act authorizes the SEC to promulgate Regulation Best Interest; and (3) Regulation Best Interest is not arbitrary and capricious under the APA.
For these reasons, we deny the petitions for review.
I. BACKGROUND
A. Regulatory Background
Broker-dealers effect securities transactions for customers, for which they typically charge a commission or other transaction-based fee. See
Investment advisers, on the other hand, provide advice and other discretionary services on an ongoing basis, for which they typically charge recurring fees based on a percentage of the assets they manage. Investment advisers are regulated under the Investment Advisers Act of 1940 (“IAA“) and owe a fiduciary duty to their clients. See
In 2010, Congress authorized the SEC to promulgate new standards of conduct for broker-dealers and investment advisers under the Dodd-Frank Act,
Section 913(f) states that the SEC “may commence a rulemaking, as necessary or appropriate in the public interest and fоr the protection of retail customers ... to address the legal or regulatory standards of care for brokers, dealers, [and] investment advisers.” Id. at 1827. In doing so, the SEC “shall consider the findings[,] conclusions, and recommendations” of the Section 913(b) study. Id. at 1828.
Section 913(g)(1) states that the SEC “may promulgate rules to provide that, with respect to [broker-dealers], when providing personalized investment advice about securities to a retail customer[,] ... the standard of conduct for such [broker-dealers] ... shall be the same as the standard of conduct applicable to an investment adviser....” Id. Section 913(g)(2) provides that the SEC “may promulgate rules to provide that the standard of conduct for all brokers, dealers, and investment advisers, when providing personalized investment advice about securities to a retail customers[,] ... shall be to act in the best interest of the customer without regard to the financial or other interest of the broker, dealer or investment adviser providing the advice. ... [S]uch standard of conduct shall be no less stringent than the standard applicable to investment advisers under [the IAA].” Id.
In 2011, SEC staff issued the Section 913(b) study and recommended that the SEC adopt a “uniform fiduciary standard ... regardless of the regulatory label (broker-dealer or investment adviser) of the professional providing the advice.” App‘x at 328.
C. Regulation Best Interest
In June 2019, the SEC adopted Regulation Best Interest, which establishes a new standard of care for broker-dealers serving retail customers.3 Regulation Best Interest,
The SEC proposed an initial version of the rule in 2018, and after an extensive notice-and-comment process, it adopted a final version of Regulation Best Interest, along with an interpretive rule clarifying the meaning of “solely incidental” in the broker-dealer exemption to the IAA. Notice of Proposed Rulemaking, Regulation Best Interest, 83 Fed. Reg. 21,574 (May 9, 2018); Commission Interpretation Regarding the Solely Incidental Prong of the Broker-Dealer Exclusion from the Definition of Investment Adviser (“Solely Incidental Interpretation“), 84 Fed. Reg. 33,681 (July 12, 2019). During the comment period, the SEC received “over 6,000 comment letters” from individual investors, trade groups, and financial firms, and held a series of “investor roundtables” to solicit in-person feedback on the proposed rule. Regulation Best Interest: The Broker-Dealer Standard of Conduct (“Adopting Release“), 84 Fed. Reg. 33,318, 33,320.
The SEC responded to these comments in a 173-page Adopting Release explaining why it chose the best-interest standard. Id. at 33,318–33,491. It considered and rejected a uniform fiduciary standard for investment advisers and broker-dealers, explaining that “a ‘one size fits all’ approach would risk reducing investor choice” and that a uniform fiduciary standard “would [not] provide any greater investor protection (or, in any case, that any benefits would [not] justify the costs imposed on retail investors in terms of reduced access to services ...).” Id. at 33,322. The Adоpting Release also explicitly noted that the SEC was relying on Section 913(f)‘s broad grant of rulemaking authority to promulgate Regulation Best Interest. Id. at 33,330.
D. Petitioners
Two groups of petitioners brought suit claiming that Regulation Best Interest is unlawful: (1) an investment-adviser interest group, XY Planning Network, LLC, and one of its members, Ford Financial Solutions, LLC (together, “XYPN“); and (2) a group of states and the District of Columbia (collectively, “State Petitioners“).
XYPN contends that Regulation Best Interest will injure investment advisers by making it more difficult for them to differentiate their standard of care from that of broker-dealers in advertising to attract customers. Julie Ford, owner of Ford Financial Solutions, LLC (together, “Ford“), attests that Ford “currently attract[s] and retain[s] clients by, in part, highlighting [the] firm‘s fiduciary duty to clients,” in contrast to the less stringent suitability standard governing broker-dealers. XYPN Add. at 5. Ford claims that under Regulаtion Best Interest, broker-dealers will be able to advertise that they must act in their clients’ “best interests” just as Ford does, even though they will face “comparatively fewer regulatory obligations, lower compliance costs, and less legal exposure.” Id.
The State Petitioners claim that Regulation Best Interest will diminish their tax revenues from investment income by allowing broker-dealers to provide conflicted investment advice to customers, which would be prohibited under a uniform fiduciary standard. The State Petitioners cite expert evidence claiming that “[t]he loss of retail investment returns due to conflicted financial advice causes harm to states by
III. DISCUSSION
A. Article III Standing
As an initial matter, the SEC argues that Petitioners lack Article III standing to challenge Regulation Best Interest. We conclude that Ford has standing to bring its petition based on the impairment of its current ability to attract customers by touting the fiduciary duties it owes its clients. In other words, by enabling broker-dealers to advertise their new best-interest obligation, Regulation Best Interest will put Ford and other investment advisers at a competitive disadvantage compared to the status quo. The State Petitioners, on the other hand, lack Article III standing because their claim that Regulation Best Interest will cause a decline in state revenue is entirely speculative.
To show Article III standing, Petitioners “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). “The petitioner‘s burden of production ... is the same as that of a plaintiff moving for summary judgment[:] it must support each element of its clаim to standing ‘by affidavit or other evidence.‘” Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
1. Ford‘s Standing
Ford has established Article III standing under the “well-established concept of competitors’ standing.” Schulz v. Williams, 44 F.3d 48, 53 (2d Cir. 1994). This doctrine recognizes “that economic actors ‘suffer an injury in fact when agencies ... allow increased competition’ against them.” Sherley v. Sebelius, 610 F.3d 69, 72 (D.C. Cir. 2010) (cleaned up). Ford meets this standard because its principal attests that Regulation Best Interest will impair its ability to differentiate its services from broker-dealers’ based on its higher duty of care.4
A party has standing to sue over a regulation that unlawfully “bestows upon their competitors ‘some competitive advantage.‘” Citizens for Responsibility & Ethics in Wash. v. Trump (“CREW“), 953 F.3d 178, 190 (2d Cir. 2019) (quoting Fulani v. League of Women Voters Educ. Fund, 882 F.2d 621, 626 (2d Cir. 1989)).5 The “basic requirement” of competitor standing is that “the complainant show an actual or imminent increase in competition.” Am. Inst. of Certified Pub. Accountants v. IRS, 804 F.3d 1193, 1197 (D.C. Cir. 2015) (citation omitted). The party suing need not “identify specific customers who switched to [its] competitors” as long as the allegedly unlawful regulation “increases competition or aids the plaintiff‘s competitors.” CREW, 953 F.3d at 190 (quoting Canadian Lumber Trade All. v. United States, 517 F.3d 1319, 1332 (Fed. Cir. 2008)). “The form of [this] injury may vary; for example, a seller facing increased
Here, Ford currently attracts customers by “highlighting [the] firm‘s fiduciary duty to clients” — one of the firm‘s “hallmarks” — in contrast to the lower standard of suitability owed by broker-dealers. XYPN Add. at 4–5. Ford states that Regulation Best Interest will create “a significant risk that clients will not be able to effectively differentiate the fiduciary duty that [Ford] owe[s] them from the lower duty that broker-dealers owe their clients,” which will “harm [Ford‘s] ability to attract customers through ... highlighting the increased standard of loyalty and care” that it owes to its clients. Id. at 5; see also Angela A. Hung et al., RAND Corp., Investor Testing of Form CRS Relationship Summary 46-48 (2018) (discussing evidence of consumer confusion), available at https://www.sec.gov/about/offices/investorad/investor-testing-form-crs-relationship-summary.pdf.
Because Ford has identified an impairment to a specific business practice, it has made a “concrete showing that it is in fact likely to suffer financial injury” from Regulation Best Interest. KERM, Inc. v. FCC, 353 F.3d 57, 60 (D.C. Cir. 2004). The harm to Ford‘s “ability to attract customers” by “highlighting [its] fiduciary duty to clients,” XYPN Add. at 5, means that it will “be forced to lower its price[s] or to expend more resources to achieve the same sales, all to the detriment of its bottom line.”6 Sherley, 610 F.3d at 72. Thus, Ford has shown, based on both “economic logic” and “actual market experience,” that Regulаtion Best Interest will hurt its business. Canadian Lumber, 517 F.3d at 1333 (citation omitted). This is enough for competitor standing here.
2. State Petitioners’ Standing
Unlike Ford, the State Petitioners do not have Article III standing because they have failed to establish a direct link between Regulation Best Interest and their tax revenues. A state has Article III standing to challenge a federal regulation if it can show “a direct injury in the form of a loss of specific tax revenues.” Wyoming v. Oklahoma, 502 U.S. 437, 448 (1992); accord Wyoming v. U.S. Dep‘t of Interior, 674 F.3d 1220, 1232 (10th Cir. 2012). A “fairly direct link” is required because “the unavoidable economic repercussions of virtually all federal policies ... suggest to us that impairment of state tax revenues should not, in general, be recognized as sufficient injury in fact to support state standing.” Pennsylvania v. Kleppe, 533 F.2d 668, 672 (D.C. Cir. 1976).
Here, the State Petitioners have not shown a direct link between Regulation Best Interest and their tax revenues, relying instead on a causal chain that is too attenuated and speculative to support
The ultimate annual pool of taxable capital gains in a state is driven by countless variables, from the performance of the broader economy to the composition of individual investor portfolios in the state. The State Petitioners’ theory also assumes away the potential downsides of a uniform fiduciary standard, such as investor losses due to higher costs and reduced consumer choice if broker-dealers are driven from the marketplace for investment advice. As a result, we find that the State Petitioners’ theory of injury rests too heavily on “conclusory statements and speculative economic data” concerning the long-term effects of Regulation Best Interest on state budgets, Wyoming, 674 F.3d at 1232–33, and we thus conclude that the State Petitioners lack Article III standing.
Nonetheless, because Ford has standing, we have jurisdiction to proceed to the merits of the petitions for review. See Town of Chester v. Laroe Estates, Inc., 137 S. Ct. 1645, 1651 (2017) (“At least one plaintiff must have standing to seek each form of relief requested ....“).
B. Legality under the Dodd-Frank Act
The Dodd-Frank Act authorizes the SEC to promulgate Regulation Best Interest. Congress stated that the SEC “may commence a rulemaking, as necessary or appropriate in the public interest and for the protection of retail customers ... to address the legal or regulatory standards of care for” broker-dealers.
The key language in each of the provisions at issue is “may,” which is permissive and reflects Congress‘s grant of discretionary rulemaking authority to the SEC. See
In addition to the word “may,” the permissive nature of Congress‘s grant of authority in Section 913(f) is reinforced by discretionary language allowing the SEC to act “as necessary or appropriate in the public interest ... [to] address the legal or regulatory standards of care....”
Petitioners contend that this reading of Section 913(f) would render the narrower authorizations in Section 913(g) superfluous. Although there is some “[o]verlap” among the three provisions, Section 913(g) is not superfluous because it clarifies that the SEC could have promulgated a uniform fiduciary standard. See Skilling v. United States, 561 U.S. 358, 413 n.45 (2010) (“Overlap with other federal statutes does not render [a statutory provision] superfluous.“).
In 2007, the D.C. Circuit struck down an SEC rule broadening the exemption for broker-dealers under the IAA. Fin. Planning Ass‘n v. SEC, 482 F.3d 481, 488 (D.C. Cir. 2007). When Congress was debating the Dodd-Frank Act, commentators expressed concern that the courts might similarly strike down any new SEC regulation that subjected broker-dealers to the same fiduciary standard
that is applicable to investment advisers.7 By including
Petitioners propose their own interpretation of
C. Arbitrary and Capricious Review
Finally, Petitioners contend that Regulation Best Interest is arbitrary and capricious because (1) it relies on an incorrect interpretation of the broker-dealer exemption to the
“[W]e will set aside the agency‘s decision only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Nat. Res. Def. Council, Inc. v. FAA, 564 F.3d 549, 555 (2d Cir. 2009) (internal quotation marks omitted). “Under this deferential standard of review, we may not substitute our judgment for that of the agency,” and we “must be reluctant to reverse results supported by a weight of considered and carefully articulated expert opinion.” Cty. of Westchester v. U.S. Dep‘t of Housing & Urban Dev., 802 F.3d 413, 430–31 (2d Cir. 2015) (internal quotation marks omitted).
The SEC “crafted Regulation Best Interest to draw on key principles underlying fiduciary obligations . . . while providing specific requirements to address certain aspects of the relationships between broker-dealers and their retail customers.” 84 Fed. Reg. at 33,320. It considered sevеral thousand comments, explicitly rejected proposed alternatives, and concluded that the best-interest obligation “will best achieve the [SEC‘s] important goals of enhancing retail investor protection and decision making, while preserving, to the extent possible, retail investor access (in terms of choice and cost) to differing types of investment services.” Id. at 33,320–23.
At bottom, Petitioners’ preference for a uniform fiduciary standard instead of a best-interest obligation is a policy quarrel dressed up as an
1. Interpretation of the Broker-Dealer Exemption
Petitioners claim that Regulation Best Interest is arbitrary and capricious because it is based on an incorrect interpretation of the “solely incidental” and “special compensation” prongs of the broker-dealer exemption from the
2. Consideration of Evidence of Consumer Confusion
Petitioners also argue that Regulation Best Interest is arbitrary and capricious because the SEC failed adequately to address the “significant evidence that consumers are not meaningfully able to differentiate between the standards of conduct owed by broker-dealers and investment advisers even with the assistance of disclosure forms.”10 XYPN Br. at 53 (citing, inter alia, RAND Study at 13). But the SEC considered evidence of consumer confusion and found that the benefits of decreased costs and consumer choice favored adopting the best-interest obligation. This decision was not arbitrary and сapricious.
“When a petitioner challenges the procedure by which an agency engaged in rulemaking, . . . we defer to [the] agency‘s determinations so long as the agency ‘gives adequate reasons for its decisions,’ in the form of a ‘satisfactory explanation for its action including a rational connection between the facts found and the choice made.‘” Nat. Res. Def. Council, Inc. v. EPA (“NRDC“), 961 F.3d 160, 170 (2d Cir. 2020) (cleaned up) (quoting Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125 (2016)). “An agency‘s factual findings must be supported by ‘substantial evidence,‘” meaning “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Fund for Animals v. Kempthorne, 538 F.3d 124, 132 (2d Cir. 2008) (citations omitted).
In the Adopting Release, the SEC explicitly recognized that a uniform standard of care may “reduce retail investor confusion as it would ensure that investors are provided the same standard of care and loyalty regardless of what type of financial professional they engage.” 84 Fed. Reg. at 33,462. But the SEC weighed these benefits
Thus, Regulation Best Interest was not arbitrary and capricious because the SEC gave “adequate reasons for its decision[]” to prioritize consumer choice and affordability over the possibility of reducing consumer confusion, and it supported its findings with “substantial evidence.” NRDC, 961 F.3d at 170 (citation omitted); Fund for Animals, 538 F.3d at 132 (citation omitted).
IV. CONCLUSION
For the reasons set forth above, the petitions for review are denied.
RICHARD J. SULLIVAN, Circuit Judge, concurring in part and dissenting in part:
I agree with the majority that the State Petitioners lack standing to bring their petition. I also happen to agree with the majority‘s analysis of Regulation Best Interest and its rejection of the investment advisers’ challenge on the merits. Nevertheless, because I am convinced that XY Planning Network, LLC and Ford Financial Solutions, LLC (together, the “XYPN Petitioners“) also lack standing to challenge Regulation Best Interest, I would dismiss the petitions in their entirety, without reaching the merits of petitioners’ regulatory arguments.
In order to establish Article III standing, petitioners “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). The XYPN Petitioners offer a grab bag of standing theories, most of which are easily brushed aside for failing to establish one or more of the three requirements articulated in Spokeo.
For example, Ford asserts that it has standing to challenge Regulation Best Interest because the rule will subject Ford‘s broker-dealer competitors to “comparatively fewer regulatory obligations, lower compliance costs, and less legal exposure, giving them a competitive advantage.” XYPN Br. Add. at 5. But Ford cannot establish that Regulation Best Interest is the cause of these alleged injuries, since the XYPN Petitioners concede that the competitive imbalance between investment advisers and broker-dealers predated the rule. See XYPN Br. at 11 (explaining the “reality of the retail market for investment advice, in which broker-dealers . . . regularly provide personalized financial advice alongside investment advisers without registering themselves under the
For its part, XY Planning contends that it has standing because the rule‘s failure to impose a uniform fiduciary standard on both broker-dealers and investment advisers “reduces the likelihood that broker-dealers will register as investment advisers,” thereby “resulting in a loss of business” from broker-dealers who might otherwise be induced to join XY Planning as dues-paying members. XYPN Br. at 31. But in addition to being wholly speculative, this theory again fails to establish a causal relationship between the regulation and the alleged injury. At bottom, XY Planning does not claim that Regulation Best Interest will cause it to lose businеss; it merely complains that the rule does not do more to mitigate a preexisting competitive injury. But that is not enough to establish injury-in-fact or causation. And since the SEC is under no statutory mandate to impose an equalizing fiduciary standard on broker-dealers, a favorable result in this litigation—vacatur of Regulation Best Interest—will do nothing to redress that preexisting harm. To the contrary, vacatur will ensure that broker-dealers continue to enjoy a more pronounced competitive advantage—and have even less incentive to join XY Planning as dues-paying members—than would be the case under Regulation Best Interest.
Notwithstanding the inadequacies of the XYPN Petitioners’ principal standing arguments, the majority purports to find a winning theory of standing at the very bottom of the bag. That theory—which might be characterized as “the client marketing theory“—posits that Ford and similarly situated investment advisers meet the requirements of Spokeo because “Regulation Best Interest will impair [Ford‘s] ability to differentiate its services from broker-dealers’ based on its higher duty of care.” Maj. Op. at 14. Accepting at face value the affidavit of Ford‘s principal, the majority concludes that (1) Ford attracts customers by touting its fiduciary duty to clients, in contrast to the lower suitability standard that broker-dealers owe to their clients, and (2) Regulation Best Interest poses “a significant risk that clients will not be able to effectively differentiate the fiduciary duty that [Ford] owe[s] them from the lower duty that broker-dealers owe their clients.” Id. at 15 (internal quotation marks omitted). According to the majority, Regulation Best Interest threatens to impair Ford‘s ability to market its higher fiduciary duty as a way of differentiating itself from broker-dealer competitors. Put another way, the majority concludes that Ford uses this tactic to attract customers, but will no longer be able to do so if broker-dealers can advertise that they too must act in their customers’ “best interests” by virtue of the new regulation.
But surely more is required to establish an injury-in-fact for standing purposes. Under this theory, anyone would be able to challenge a regulation that imposes duties on third parties simply because the challenger chose to adopt a marketing strategy that made reference to the existence or non-existence of such regulations. Consider, for example, a not-far-fetched
To my mind, the impairment of a marketing tactic based on a competitor‘s characterization of government regulations simply cannot rise to the level of a legally cognizable injury-in-fact for standing purposes. As the Supreme Court has recognized, where a party is not “the object of the [challenged] government action,” its standing is “substantially more difficult” to establish. Lujan v. Defs. of Wildlife, 504 U.S. 555, 562 (1992) (internal quotation marks omitted). In those circumstances, “much more is needed,” id., namely, a “concrete, particularized, and actual or imminent” injury, Clapper v. Amnesty Int‘l USA, 568 U.S. 398, 409 (2013) (internal quotation marks omitted).
Here, Ford‘s diminished ability to market its fiduciary duty as a differentiating factor from its broker-dealer competitors does not satisfy this requirement. Neither the hypothetical food brand nor the actual petitioners here have a property interest in charactеrizing competitors as un- or under-regulated. And while they may have a limited First Amendment right to make such statements in the marketplace, they certainly don‘t have Article III standing to challenge a regulation simply because it threatens to alter the regulatory status quo and render their marketing strategy less compelling.
For all these reasons, I am convinced that the XPYN Petitioners lack standing to challenge Regulation Best Interest, and that we are compelled to dismiss their petitions outright without reaching the merits of the challenge.