Turning first to the plaintiffs' Chevron challenge under
5 U.S.C. § 706(2)(C), the Court examined "whether Congress has directly
spoken to the precise question at issue[,]" Chevron U.S.A., Inc. v.
Natural Res. Def. Council. Inc., 467 U.S. 837
, 842-43 (1984), and
utilizing the traditional tools of statutory
interpretation, . . . [the Court] is unable to
conclude as a matter of law that Congress intended
for the GLBA's privacy provisions to apply to
attorneys who provide legal services in the fields
of real estate settlement, tax-planning and
tax-preparation. This conclusion is compelled by
the plain language, the underlying purpose, and
the legislative history of the GLBA, which all
indicate that it does not appear that Congress
intended for attorneys to be considered `financial
institutions.' It is also doubtful that Congress
would alter a regulatory scheme that has always
been under the authority of the states without
even a hint that newly enacted legislation was
venturing into that area. In other words, the
delegation of authority to the FTC by Congress to
regulate the ethical conduct of attorneys in the
face of approximately two hundred years of
exclusive state regulation in such a subtle way
would be, in the words of Justice Scalia, like
`hid[ing an] elephant in a mousehole.'
New York State Bar. 276 F. Supp.2d at 136 (quoting
Whitman v. American Trucking Associations. Inc., 531 U.S. 457
468 (2001)). The Court also then noted that even if it had to consider
the second-step of Chevron based on a finding that "the GLBA is ambiguous
or silent on its applicability to attorneys engaged in the practice of
law, the FTC's interpretation would still likely be invalid[,]" because
the Court would be unable to afford deference to the FTC's April 8, 2002
letter, as it "appears to have been made without any degree of
deliberation, thoughtful consideration or comments from the public[,]" and the
FTC's interpretation contained in their briefs to this Court would amount
to little more than post hoc rationalization. Id. at
136, 139. Turning next to the plaintiffs' "arbitrary and capricious"
challenge made pursuant to 5 U.S.C. § 706(2)(A), the Court concluded
that the FTC's interpretation appeared to constitute "arbitrary and
capricious" agency action as "[t]he FTC has failed to articulate any
explanation, let alone a satisfactory one, for its interpretation."
Id. at 141 (citing Motor Vehicle Manufacturer's Ass'n v.
State Farm Mutual Ins. Co., 463 U.S. 29
, 43 (1983)). Because review
of this challenge overlaps to a large degree with the Court's analysis of
the second-step of Chevron, the Court found that the FTC's
post hoc rationalization could not "substitute for
the reasoned decision making process that an agency must
undertake when making the decision itself." Id. at 142.
Finally, turning to the plaintiffs' third challenge, the Court concluded
that even if attorneys were deemed to be subject to the GLBA's privacy
provisions, it appeared that the FTC's decision "not even to consider,
much less take a "hard look at the ABA's de minimis
exemption request, [was] arbitrary and capricious agency action."
Id. at 146 (citations omitted).