In a first-of-its-kind decision, U.S. District Judge Rosemary M. Collyer of the U.S. District Court for the District of Columbia granted MetLife’s motion to remove the non-bank SIFI designation imposed by the Financial Stability Oversight Council (FSOC). This is a highly significant case, as it represents the first time a SIFI-designated company has challenged the designation. However, the order and opinion are currently under seal, possibly due to the inclusion of confidential and proprietary information on both sides. The parties have until April 6, 2016 to review these documents and offer proposed public versions.
As we have previously discussed, MetLife challenged the designation on several grounds, including that FSOC’s process for making these determinations violated due process and that its decision was arbitrary and capricious. Judge Collyer held oral arguments in the case this past February, when she expressed some skepticism of FSOC’s process but also noted the broad latitude given to FSOC by Dodd-Frank in making these types of determinations.
This is, of course, not the end of the road. FSOC will likely appeal Judge Collyer’s decision to the United States Court of Appeals for the District of Columbia.
We will update this post once the judgment and opinion are released.