Legal Seminar, Chicago, IL

Lucia v. SEC Fallout – Phase 2 (cont.)

• In Lucia v. SEC , No. 18-cv-2692 (S.D. Cal. 2019), Lucia is trying to collaterally attack the constitutionality of SEC ALJs (double protection). • Lucia filed his complaint on November 28, 2018, followed by a motion for preliminary injunction on December 6, 2018. • On March 18, 2019, Judge Dana Sabraw vacated oral argument for the preliminary injunction, which was scheduled for March 22, 2019. Judge Sabraw found this matter was suitable for a decision without oral argument. • On April 4, 2019, Judge Sabraw ordered that if the parties could not reach a settlement, the court would defer Lucia’s motion for preliminary injunction and address it simultaneously with SEC’s motion to dismiss. The parties did not reach a settlement, because SEC filed its motion to dismiss the complaint on June 3, 2019. • However, Thunder Basin Coal Co. v. Reich , 510 U.S. 200 (1994), is an obstacle. Must Lucia exhaust all administrative remedies? • Before Lucia , five U.S. Circuit Courts (Second, Fourth, Eleventh, Seventh, and DC) have answered yes. • Such hardship is “‘part of the social burden of living under government,’ rather than a form of irreparable injury justifying immediate judicial review.” Tilton v. SEC, 824 F.3d 276, 286 (2 nd Cir. 2016) (quoting FTC v. Standard Oil Co. of Cal . , 449 U.S. 232, 244–45 (1980)).

Should Banks Sue Washington?

• SHB 2167 increased Washington business & occupation tax on financial institutions earning at least $1 billion in net income from 1.5 percent to 2.7 percent. Expected to raise $133 million in state revenue over the next two years. • “Title Only” Bill Under State Constitution • Issue: Did the procedure by which it was passed, using a “title-only” bill, violate Article 2, Section 36 of the Washington Constitution, which requires a 10-day waiting period between introduction of a bill and its passage? • No language was provided in the original bill. • Victory could be temporary - legislature could simply follow the proper timetable and pass the same legislation.