Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Silberstein v. U.S. Securities and Exchange Commission

United States District Court, D. Columbia.

January 4, 2016

STEPHEN M. SILBERSTEIN, Plaintiff,
v.
U.S. SECURITIES AND EXCHANGE COMMISSION, Defendants

          For STEPHEN SILBERSTEIN, Plaintiff: Anne L. Weismann, CAMPAIGN FOR ACOUNTABILITY, Washington, DC.

         For U.S. SECURITIES AND EXCHANGE COMMISSION, Defendant: Paul G. Alvarez, Thomas Jeffrey Karr, LEAD ATTORNEYS, SECURITIES & EXCHANGE COMMISSION, Washington, DC; William K. Shirey, LEAD ATTORNEY, SECURITIES AND EXCHANGE COMMISSION, General Counsel's Office, Washington, DC.

          OPINION

         ROSEMARY M. COLLYER, United States District Judge.

         Stephen M. Silberstein strongly believes that the Securities and Exchange Commission (SEC) should adopt a rule requiring publicly traded corporations to disclose to shareholders and the public their use of corporate funds for political activities. On May 8, 2014, Mr. Silberstein and Citizens for Responsibility and Ethics in Washington (CREW) submitted a petition for rulemaking to the SEC.[1] Since the SEC has not responded to this petition, Mr. Silberstein sued the SEC under the Administrative Procedure Act to challenge the agency's inaction as arbitrary, capricious, and contrary to law, as well as to compel the SEC to act on his petition. The SEC moves to dismiss the Complaint in its entirety. See Mot. to Dismiss [Dkt. 8] (MTD). Mr. Silberstein filed a timely opposition to the motion, to which the SEC replied. For the reasons that follow, the Court will grant the motion to dismiss.

         I. FACTS

         Mr. Silberstein, a shareholder in Aetna, Inc., " has a longstanding interest in issues pertaining to corporate governance and responsibility," particularly the promotion of greater oversight and transparency concerning the political contributions of Aetna and other publicly traded companies. Am. Compl. [Dkt. 7] ¶ 4. Mr. Silberstein claims that without regulation to require " greater transparency in the political contributions of Aetna and other publicly traded companies in which [he] owns stock," he cannot properly fulfill " his shareholder duties, as he cannot determine whether those contributions are in the best interests of the companies." Id. ¶ 5.

         In 2013, the SEC's Division of Corporation Finance announced that it would consider " whether to recommend that the Commission issue a proposed rule" on this matter. Id. ¶ 4. No proposal was ever issued. Therefore, on May 8, 2014, Mr. Silberstein and CREW submitted an amended petition for rulemaking requesting SEC to create a rule establishing a disclosure requirement.[2] Despite the petition, " the SEC's Agency Rule List for the Fall of 2014, issued on November 21, 2014, continued to omit any reference to such [a] rule." Id. ¶ 34.

         On May 13, 2015, Mr. Silberstein filed a one-count complaint under the Administrative Procedure Act (APA), 5 U.S.C. § 500 et seq., alleging that SEC'S failure to respond to Mr. Silberstein's petition was arbitrary, capricious, and contrary to law. First Compl. [Dkt. 1] ¶ ¶ 39-41. On July 13, 2015, SEC moved to dismiss the complaint for failure to state a claim and Mr. Silberstein, in turn, filed a two-count amended complaint on July 16, 2015. Count I incorporates the allegations and the single count of the First Complaint. Am. Compl. ¶ 40. Count II alleges that the SEC's inaction constitutes an " effective denial" of the rulemaking petition that was arbitrary, capricious, and contrary to law. Id. ¶ ¶ 47-48.

         Specifically, Mr. Silberstein is seeking declaratory relief that the SEC's failure to respond to the petition (Count I) and failure to grant the petition (Count II) violated § § 553 and 555 of the APA.[3] He also seeks injunctive relief under § 706(1) to compel the SEC to respond immediately to the petition (Count I) and to initiate a rulemaking proceeding (Count II).[4] Id. ¶ ¶ 42-43, 49-50. SEC now moves to dismiss the Amended Complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.

         II. LEGAL STANDARDS

         A. Motion to Dismiss Under Rule 12(b)(1)

         Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss a complaint, or any portion thereof, for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). No action of the parties can confer subject matter jurisdiction on a federal court because subject matter jurisdiction is both a statutory requirement and an Article III requirement. Akinseye v. District of Columbia, 339 F.3d 970, 971, 358 U.S.App.D.C. 56 (D.C. Cir. 2003). The party claiming subject matter jurisdiction bears the burden of demonstrating that such jurisdiction exists. Khadr v. United States, 529 F.3d 1112, 1115, 381 U.S.App.D.C. 408 (D.C. Cir. 2008); see Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (noting that federal courts are courts of limited jurisdiction and " [i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction" ) (internal citations omitted).

         When reviewing a motion to dismiss for lack of jurisdiction under Rule 12(b)(1), a court should " assume the truth of all material factual allegations in the complaint and 'construe the complaint liberally, granting the plaintiff the benefit of all inferences that can be derived from the facts alleged.'" Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139, 395 U.S.App.D.C. 316 (D.C. Cir. 2011) (quoting Thomas v. Principi, 394 F.3d 970, 972, 364 U.S.App.D.C. 326 (D.C. Cir. 2005)). Nevertheless, " the court need not accept factual inferences drawn by plaintiffs if those inferences are not supported by facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusions." Speelman v. United States, 461 F.Supp.2d 71, 73 (D.D.C. 2006).

         B. Motion to Dismiss ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.