THE GEORGIA REPUBLICAN PARTY, NEW YORK REPUBLICAN STATE COMMITTEE, TENNESSEE REPUBLICAN PARTY, Petitioners,
SECURITIES AND EXCHANGE COMMISSION, FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC., Respondents.
Petition for Review of a Decision of the Securities and
Exchange Commission Agency No. 34-78683
WILLIAM PRYOR and JULIE CARNES, Circuit Judges, and CORRIGAN,
CARNES, Circuit Judge
2015, the Financial Industry Regulatory Authority
("FINRA"), a self-regulatory organization operating
under the auspices of the Securities and Exchange Commission,
proposed adopting Rule 2030-a regulation governing the
political contributions of FINRA members who solicit
government officials for investment advisory services
contracts. A year later, after notice and comment, the
Commission issued an order approving the Rule.
Georgia Republican Party, the New York Republican State
Committee, and the Tennessee Republican Party filed a
petition challenging the Commission's order. They contend
that the Commission lacked the authority to approve Rule 2030
and that the Rule violates the First Amendment. We, however,
are unable to consider the petition's merits because the
Georgia Party does not have standing to challenge the Rule
and this Court is not the proper venue for either the New
York Committee or the Tennessee Party. As a result, we
dismiss the Georgia Party for lack of jurisdiction, and
transfer the appeal of the remaining two parties to the
United States Court of Appeals for the District of Columbia
2010, the Commission enacted rules generally prohibiting
investment advisors from "provid[ing] investment
advisory services for compensation to a government entity
within two years after a contribution to an official of the
government entity." 17 C.F.R. § 275.206(4)-5(a)(1);
see 75 Fed. Reg. 41018, 41068-69 (2010). The
Commission's rules also prohibit investment advisors from
using placement agents-persons who solicit government
officials for investment advisory services contracts on
behalf of investment advisers-unless such agents are
"regulated person[s]" within FINRA. 17 C.F.R.
§ 275.206(4)-5(a)(2)(i)(A). The Commission's rules
further prohibit investment advisers from working with
placement agents unless FINRA enacts rules that prohibit
these placement agents from "engaging in distribution or
solicitation activities if certain political contributions
have been made" and such rules are "substantially
equivalent" to, or "more stringent" than, the
Commission's comparable rules for investment advisers.
Id. § 275.206(4)-5(f)(9)(ii).
2015, FINRA proposed Rule 2030 to the Commission for
adoption. 80 Fed. Reg. 81650, 81650-56 (2015); see
15 U.S.C. § 78s(b)(1) (requiring that self-regulatory
organizations receive approval from the Commission before any
rule change may take effect). Subject to some exceptions,
Rule 2030 prohibits placement agents from "engag[ing] in
distribution or solicitation activities for compensation with
a government entity on behalf of an investment adviser that
provides or is seeking to provide investment advisory
services to such government entity within two years after a
contribution to an official of the government entity."
FINRA Rule 2030(a). Thus, if a placement agent makes a
contribution to a government official, the placement agent
must wait two years before it can solicit the employing
governmental entity for an investment advisory services
contract and be paid for doing so.
2030 also includes provisions that attempt to prevent
placement agents from circumventing the Rule by making
indirect contributions to government officials. One such
provision states that placement agents may not "solicit
or coordinate any person or political action committee to
make" payments "to a political party of a state or
locality of a government entity with which the covered member
is engaging in, or seeking to engage in, distribution or
solicitation activities on behalf of an investment
adviser." FINRA Rule 2030(b).
August 2016, after notice and comment, the Commission issued
a final order approving the Rule. 81 Fed. Reg. 60051,
60051-52 (2016). In response, the Georgia Party, the New York
Committee, and the Tennessee Party filed a joint petition in
this Court under 15 U.S.C. § 78y(a), asserting that the
Commission lacked the authority to approve Rule 2030 and that
the Rule violates the First Amendment.
The Georgia Party Lacks Standing to Challenge Rule
III of the Constitution restricts [the judicial power] to the
traditional role of Anglo-American courts, which is to
redress or prevent actual or imminently threatened injury to
persons caused by private or official violation of law."
Summers v. Earth Island Inst., 555 U.S. 488, 492
(2009). Standing doctrine "reflect[s] this fundamental
limitation" and "requires federal courts to satisfy
themselves that the plaintiff has alleged such a personal
stake in the outcome of the controversy as to warrant his
invocation of federal-court jurisdiction." Id.
at 493 (emphasis omitted) (internal quotation marks omitted).
So, if a plaintiff lacks standing, then "federal courts
do not have jurisdiction over his or her complaint."
Stalley ex rel. U.S. v. Orlando Reg'l Healthcare
Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008).
party invoking federal jurisdiction bears the burden of
establishing" standing. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992). "Since
[standing elements] are not mere pleading requirements but
rather an indispensable part of the plaintiff's case,
each element must be supported in the same way as any other
matter on which the plaintiff bears the burden of proof,
i.e., with the manner and degree of evidence
required at the successive stages of the litigation."
Id. At the pleading stage "general factual
allegations of injury . . . may suffice." Id.
But in response to a summary judgment motion, "the
plaintiff can no longer rest on such 'mere allegations,
' but must 'set forth' by affidavit or other
evidence 'specific facts.'" Id.
(quoting Fed.R.Civ.P. 56(e)). In this context, a petition for
appellate review of a final agency order is more analogous to
a motion for summary judgment, "in that both request a
final judgment on the merits." Iowa League of Cities
v. EPA, 711 F.3d 844, 869 (8th Cir. 2013).
"Accordingly, parties seeking direct appellate review of
an agency action must prove each element of standing as if
they were moving for summary judgment in a district
court." Id. Thus, petitioners "bear the
responsibility of meeting the same burden of production,
namely 'specific facts' supported by 'affidavit
or other evidence.'" Id. at 870 (quoting