United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 22, 2013 Decided April 26, 2013
No. 12-1398
AMERICAN PETROLEUM INSTITUTE, ET AL.,
PETITIONERS
v.
SECURITIES AND EXCHANGE COMMISSION,
RESPONDENT
OXFAM AMERICA,
INTERVENOR
On Petition for Review of a Regulation of
the Securities and Exchange Commission
Eugene Scalia argued the cause for petitioners. With him
on the briefs were Thomas M. Johnson, Jr., Robin S. Conrad,
Rachel Brand, Harry M. Ng, and Peter C. Tolsdorf.
William K. Shirey, Senior Litigation Counsel, Securities
and Exchange Commission, argued the cause for respondent.
With him on the brief were Michael A. Conley, Deputy
General Counsel, and Theodore J. Weiman, Attorney. Mark
Pennington, Assistant General Counsel, entered an
appearance.
2
Jonathan G. Kaufman, Marco Simons, and Howard M.
Crystal were on the brief for intervenor Oxfam America, Inc.
in support of respondent.
Dennis M. Kelleher and Stephen W. Hall were on the
brief for amicus curiae Better Markets, Inc. in support of
respondent.
Lauren Carasik and Eric L. Lewis were on the brief for
amici curiae United States Senators Benjamin Cardin, et al. in
support of respondent.
Jeffrey W. Mikoni was on the brief for amici curiae
Representatives Edward J. Markey, et al. in support of
respondent.
Before: TATEL and BROWN, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: Pursuant to the Dodd-Frank Wall
Street Reform and Consumer Protection Act, Pub. L. No. 111-
203, 124 Stat. 1376 (2010), the Securities and Exchange
Commission promulgated a rule requiring certain companies
to disclose payments made to foreign governments relating to
the commercial development of oil, natural gas, or minerals.
Petitioners challenge the statute and the regulation, raising
both constitutional and statutory claims. “[O]ut of an
abundance of caution,” petitioners also filed suit in United
States District Court. Their caution proved prescient. For the
reasons given below, we hold that we lack authority to hear
this suit in the first instance and dismiss the petition for lack
of jurisdiction.
3
I.
At issue in this case is a provision of the Dodd-Frank
Act, now codified at section 13(q) of the Exchange Act, 15
U.S.C. § 78m(q), that addresses the “resource curse”—
described by co-sponsor Senator Richard Lugar as a
phenomenon whereby “oil, gas reserves, and minerals . . . can
be a bane, not a blessing, for poor countries, leading to
corruption, wasteful spending, military adventurism, and
instability.” 156 Cong. Rec. S3816 (May 17, 2010) (statement
of Sen. Lugar). According to a report commissioned by
Senator Lugar, the resource curse is attributable, among other
things, to “revenue inflows from a dominant export
commodity [that] cause [a country’s] exchange rate to
appreciate, making imports cheap, and undermine domestic
production and economic growth by decreasing relative
competitiveness.” Minority Staff of S. Comm. on Foreign
Relations, 110th Cong., The Petroleum and Poverty Paradox:
Assessing U.S. and International Community Efforts to Fight
the Resource Curse, at 10 (Oct. 2008). On the political front,
the resource curse allows “[g]overnments with authoritarian
tendencies [to] be insulated from domestic and international
pressure by the steady stream of extractive revenues,
sometimes leading to worse governance over time.” Id. at 2.
Believing that “[t]ransparency empowers citizens,
investors, regulators, and other watchdogs” to hold
governments accountable, 156 Cong. Rec. S3816 (May 17,
2010) (statement of Sen. Lugar), Congress, through section
13(q), directed the Commission to promulgate a rule requiring
“resource extraction issuer[s]”—defined as companies that are
listed on a U.S. stock exchange and “engage[] in the
commercial development of oil, natural gas, or minerals,” 15
U.S.C. § 78m(q)(1)(D)—to disclose any “payment” to a
foreign government or the United States government that is
“made to further the commercial development of oil, natural
4
gas, or minerals,” id. § 78m(q)(1)(C)(i). Section 13(q)’s
disclosure requirement covers taxes, royalties, fees,
production entitlements, bonuses, and “other material
benefits” that the Commission determines are part of the
“commonly recognized revenue stream” for extractive
industries. Id. § 78m(q)(1)(C)(ii).
Section 13(q) requires resource extraction issuers to
submit an “annual report” to the Commission detailing their
payments. Id. § 78m(q)(2)(A). In this report, companies must
disclose: (1) “the type and total amount of . . . payments made
for each project of the resource extraction issuer”; and (2)
“the type and total amount of such payments made to each
government.” Id. § 78m(q)(2)(A)(i)–(ii). The annual report
must be “submitted in an interactive data format,” id.
§ 78m(q)(2)(C), that includes “electronic tags” identifying,
among other things, “the total amounts of the payments,” “the
currency used to make the payments,” and “the government
that received the payments,” id. § 78m(q)(2)(D)(ii). Section
13(q)(3)(A) requires that “[t]o the extent practicable, the
Commission shall make available online, to the public, a
compilation of the information required to be submitted under
the rules” implementing the annual reporting requirement. Id.
§ 78m(q)(3)(A).
In September 2012, the Commission promulgated a final
rule fleshing out the statute’s requirements. See Disclosure of
Payments by Resource Extraction Issuers, 77 Fed. Reg.
56,365 (Sept. 12, 2012). In its cost-benefit analysis, the
Commission calculated that the “total initial compliance costs
for all [resource extraction] issuers are likely to be . . .
approximately $1 billion.” Id. at 56,410. The Commission
further predicted that “the ongoing compliance costs are likely
to be between $200 million and $400 million.” Id. at 56,411.
Finally, assuming that four countries—Angola, Cameroon,
5
China, and Qatar—prohibit the disclosure of payment
information, the Commission estimated that resource
extraction issuers operating in those countries could lose over
$12.5 billion if forced to sell their assets. See id. at 56,412.
Petitioners, the American Petroleum Institute, the
Chamber of Commerce, the Independent Petroleum
Association, and the National Foreign Trade Council,
challenge section 13(q)’s and the regulation’s disclosure
requirements on First Amendment grounds. They also
challenge both the regulation and the cost-benefit analysis on
statutory grounds.
Although believing that original jurisdiction lies in this
court, petitioners, acting “out of an abundance of caution,”
Petitioners’ Br. iii, also filed suit in the United States District
Court for the District of Columbia. See American Petroleum
Institute v. SEC, No. 12-1668 (D.D.C. Oct. 10, 2012); see also
National Automobile Dealers Association v. FTC, 670 F.3d
268, 272 (D.C. Cir. 2012) (describing this litigation strategy
as “appropriate[]” when there is a question about whether the
district court or circuit court has original jurisdiction).
Although the Commission agrees with petitioners that we
have jurisdiction to hear this petition for review, intervenor
Oxfam America does not, arguing that petitioners must first
sue in the district court. We begin and end with jurisdiction.
See Steel Co. v. Citizens for a Better Environment, 523 U.S.
83, 94–95 (1998) (“The requirement that jurisdiction be
established as a threshold matter springs from the nature and
limits of the judicial power of the United States and is
inflexible and without exception.” (internal quotation marks
and alteration omitted)).
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II.
“Congress is free to ‘choose the court in which judicial
review of agency decisions may occur.’ ” Watts v. SEC, 482
F.3d 501, 505 (D.C. Cir. 2007) (quoting Five Flags Pipe Line
Co. v. Department of Transportation, 854 F.2d 1438, 1439
(D.C. Cir. 1988)). “In this circuit, the normal default rule is
that persons seeking review of agency action go first to
district court rather than to a court of appeals.” National
Automobile Dealers Association, 670 F.3d at 270 (internal
quotation marks omitted). “Initial review occurs at the
appellate level only when a direct-review statute specifically
gives the court of appeals subject-matter jurisdiction to
directly review agency action.” Watts, 482 F.3d at 505; see
also Preseault v. ICC, 853 F.2d 145, 148 (2d Cir. 1988) (“A
party seeking judicial review of administrative action may,
ordinarily, ‘draw in question the constitutionality’ of the
statute under which the agency acted.” (quoting Fleming v.
Nestor, 363 U.S. 603, 607 (1960))).
Here, Exchange Act section 25 establishes the framework
for initial appellate review of Commission actions. Section
25(a) provides that a “person aggrieved by a final order of the
Commission entered pursuant to this chapter may obtain
review of the order in the United States Court of Appeals . . .
for the District of Columbia Circuit.” 15 U.S.C. § 78y(a)(1)
(emphasis added). Section 25(b) provides that a “person
adversely affected by a rule of the Commission promulgated
pursuant to [Exchange Act] section [6, 9(h)(2), 11, 11A,
15(c)(5) or (6), 15A, 17, 17A, or 19] may obtain review of
this rule in the United States Court of Appeals . . . for the
District of Columbia Circuit.” Id. § 78y(b)(1) (emphasis
added). Thus, absent a grant of original appellate jurisdiction
under section 25, a party must first proceed by filing suit in
district court pursuant to 28 U.S.C. § 1331 and the
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
7
Looking only at section 25’s language, we think it
apparent that this court lacks jurisdiction. Section 25(a) gives
us jurisdiction over challenges to all final orders issued by the
Commission under the Exchange Act whereas section 25(b)
gives us jurisdiction only over challenges to rules
promulgated pursuant to enumerated sections of the Act.
Here, because petitioners challenge a rule, the operative
provision is section 25(b). And because the Commission
relied on none of the sections listed in section 25(b) when it
published the resource extraction rule, see 77 Fed. Reg. at
56,417 (relying on Exchange Act sections 3(b), 12, 13, 15,
23(a), and 36), that should end the matter.
Petitioners argue that we nonetheless have jurisdiction
under section 25(b) because it authorizes initial appellate
review of rules promulgated under subsections 15(c)(5) and
(6) and because the resource extraction rule invoked section
15 generally as one source of authority. But as the
Commission has subsequently made clear, it relied not on
subsections 15(c)(5) or (6) but rather on subsection 15(d). See
SEC Jurisdiction Br. 2. This explanation makes perfect sense.
Subsections 15(c)(5) and (6) regulate brokers and dealers, 15
U.S.C. § 78o(c)(5)–(6), while subsection 15(d) requires
issuers to file supplementary information, id. § 78o(d). The
resource extraction rule involves the latter, not the former.
Given this and given that subsection 15(d) appears nowhere in
section 25(b), we lack original jurisdiction under section
25(b).
Alternatively, petitioners contend that we have
jurisdiction under section 25(a). In support, they rely on
Investment Company Institute v. Board of Governors of the
Federal Reserve System, 551 F.2d 1270 (D.C. Cir. 1977), in
which we interpreted a jurisdictional statute’s use of the term
“order” to mean “any agency action capable of review on the
8
basis of the administrative record.” Id. at 1278; see also id. at
1277 (commenting that “ ‘[i]t is the availability of a record for
review . . . [that] is now the jurisdictional touchstone’ ”
(quoting Deutsche Lufthansa Aktiengesellschaft v. Civil
Aeronautics Board, 479 F.2d 912, 916 (D.C. Cir. 1973))). We
explained that because the typical Administrative Procedure
Act case can be resolved on the administrative record, “a
factual hearing in the district court is unnecessary.” Id. at
1276. Indeed, “requiring petitioners challenging regulations to
go first to the district court results in unnecessary delay and
expense.” Id.
According to petitioners, the same is true here. Pointing
out that their challenge to the regulation can be resolved on
“the basis of the administrative record,” id. at 1278,
petitioners argue that we must interpret the word “order” in
section 25(a) to mean “orders” and “rules.” We disagree.
Investment Company Institute involved a very different
jurisdictional statute than the one we confront here. There, the
statute authorized initial appellate review only of agency
“orders.” Here, by contrast, section 25(b) not only expressly
authorizes appellate review of agency rules, but it limits that
review to rules issued pursuant to specific provisions of the
Exchange Act, leaving all others to be challenged in the
district court. Indeed, as Oxfam points out, applying
Investment Company Institute to section 25 would render
section 25(b) superfluous since all Commission rules would
be reviewable in this court under section 25(a). This would
run counter to the “basic interpretive canon[]” that “a statute
should be construed so that effect is given to all its
provisions.” Corley v. United States, 556 U.S. 303, 314
(2009) (internal quotation marks and alteration omitted).
9
Petitioners insist that applying Investment Company
Institute would not render section 25(b) superfluous because,
they say, it would retain independent vitality under a narrow
set of circumstances. Citing Citizens to Preserve Overton
Park, Inc. v. Volpe, 401 U.S. 402 (1971), which holds that
courts may go beyond the administrative record “when there
has been a strong showing of bad faith or improper behavior
or when the record is so bare that it prevents effective judicial
review,” Theodore Roosevelt Conservation Partnership v.
Salazar, 616 F.3d 497, 514 (D.C. Cir. 2010) (internal
quotation marks omitted), petitioners argue in a footnote that
“the Investment Company Institute definition of ‘orders’
would not apply where a rulemaking challenge required fact-
finding by the district court.” Petitioners’ Br. 29 n.4. In other
words, when Overton Park applies, the underlying premise of
Investment Company Institute no longer controls and a
Commission “rule” is no longer an “order” under section
25(a). Thus, petitioners conclude, when a party alleges bad
faith or claims that an administrative record is insufficient to
facilitate judicial review, original jurisdiction lies in the
district court except for challenges to rules promulgated
pursuant to the provisions specifically enumerated in section
25(b).
Again, we disagree. As an initial matter, reliance on
extra-record evidence “is the exception, not the rule.”
Theodore Roosevelt Conservation Partnership, 616 F.3d at
514. More importantly, petitioners have pointed to no
evidence that Congress intended section 25(b) to serve this
function.
Petitioners’ interpretation of section 25(a) would also
eviscerate Congress’s carefully constructed jurisdictional
scheme—a scheme that becomes even more apparent when
one delves into the history of section 25. As originally
10
enacted in 1934, the Exchange Act contained only section
25(a)’s grant of original appellate jurisdiction to review
Commission final orders. See Securities Exchange Act of
1934, Pub. L. No. 73-291, § 25, 48 Stat. 881, 901–02.
Congress, as the Third Circuit explained, “intended to insulate
rules and regulations of the Commission” from judicial
review. PBW Stock Exchange, Inc. v. SEC, 485 F.2d 718, 725
(3d Cir. 1973). At that time, Congress had yet to enact either
the Administrative Procedure Act or the Declaratory
Judgment Act, meaning that judicial review of agency action
was generally limited to final orders. See id. at 722–26
(discussing the Exchange Act’s legislative history and the
state of the law in the 1930s). Given this statutory framework,
courts of appeals relied on section 25(a) to dismiss petitions
for review of Commission rules. See id. at 733; NRDC v.
SEC, No. 73-1591, 1974 WL 3909 (D.C. Cir. June 17, 1974)
(per curiam) (relying on PBW Stock Exchange in dismissing
petition for review for lack of jurisdiction). Indeed, this
approach followed our existing case law, which interpreted
the term “order” in jurisdictional statutes to exclude initial
appellate review of agency rules. See, e.g., United Gas Pipe
Line Co. v. Federal Power Commission, 181 F.2d 796 (D.C.
Cir. 1950).
In 1975, Congress for the first time created original
appellate jurisdiction over challenges to certain Commission
rules. Recognizing that “[a]t the present time there is no
Exchange Act provision for review of Commission rules” and
therefore “review of rules, to the extent it is available, is . . .
in the District Court,” S. Rep. No. 94-75, at 36 (1975),
Congress added section 25(b) to the Exchange Act. See
Securities Acts Amendments of 1975, Pub. L. No.
94-29, § 20, 89 Stat. 97, 158–60. Congress did this because
the “Court of Appeals appears to provide the most appropriate
forum for . . . review in light of the fact that the District
11
Court’s factfinding function is rarely necessary and the
questions subject to review are likely to end up in the higher
court anyway.” S. Rep. No. 94-75, at 37. Significantly,
however, Congress did not confer original appellate
jurisdiction over all Commission rules. Unlike section 25(a),
which confers original appellate jurisdiction over all final
orders issued under the Exchange Act, section 25(b) is limited
to specified Exchange Act provisions “directly relating to the
operation or regulation of the national market system, a
national clearing system, or the [Commission’s] oversight of
the self-regulatory organizations.” Id. at 36. And as
petitioners now concede, “the 1975 amendments to the
Exchange Act added some new rulemaking authorities that
were not included in Section 25(b).” Petitioners’ Rule 28(j)
Letter, at 1 (Mar. 25, 2013). In other words, although
acknowledging that district court review of rules may be
inefficient, Congress nonetheless authorized initial appellate
review of only certain rules, leaving the rest to be challenged
in the district court pursuant to the by-then-enacted
Administrative Procedure Act.
Fast forward to 1990. In that year, Congress passed the
Market Reform Act, which added a new provision to the
Exchange Act—section 9(h)(2)—that prohibited practices
adversely affecting market volatility. In order to ensure initial
appellate review of regulations issued pursuant to the newly
enacted section, Congress simultaneously added it to the list
of provisions in section 25(b)—thus reiterating that initial
appellate review of Commission rules hinges on section
25(b). See Market Reform Act of 1990, Pub. L. No. 101-432,
§ 6, 104 Stat. 963, 975.
By contrast, and critically for our purposes, when
Congress enacted section 13(q) and directed the Commission
to issue implementing regulations, it did not add section 13(q)
12
to the list of provisions contained in section 25(b). Given the
statutory history, this suggests quite clearly that Congress, for
whatever reason, intended challenges to section 13(q)
regulations to be brought first in the district court.
Petitioners take a different lesson from this history. As
they see it, Congress knows about Investment Company
Institute—which overturned decades of precedent holding that
“order” meant “order,” not “rules”—and “has acquiesced in
this interpretation for 35 years.” Petitioners’ Br. 29. Because
Congress has amended the Exchange Act several times and
“at no point . . . modified the provision for judicial review of
‘orders,’ ” Petitioners’ Br. 29, petitioners urge us to “interpret
‘order’ in the Exchange Act in its modern sense.” Petitioners’
Reply Br. 4.
It is true that we may assume that Congress knows our
case law, see Cannon v. University of Chicago, 441 U.S. 677,
696–97 (1979), and petitioners’ argument might well have
some force if, following the addition of section 25(b) to the
Exchange Act in 1975, courts had interpreted “order” in
section 25(a) to include regulations. But as indicated above,
Investment Company Institute involved a different statute, and
petitioners have pointed to no post-1975 decision by this
court, nor have we found one, expressly holding that “order”
in section 25(a) encompasses regulations. Indeed, were
petitioners correct, Congress would have had no need to
revise section 25(b) in 1990. Given this, and given that
petitioners’ interpretation would render section 25(b)
superfluous, the acquiescence principle cannot be extended
quite so far.
Petitioners next rely on Florida Power & Light Co. v.
Lorion, 470 U.S. 729 (1985). There, as here, the question
presented was whether a challenge to an agency action should
13
be heard initially in the court of appeals. Citing our decision
in Investment Company Institute, the Supreme Court
emphasized the advantages of initial appellate review when
the “factfinding capacity of the district court is . . .
unnecessary to judicial review of agency decisionmaking.” Id.
at 744. Accordingly, “[a]bsent a firm indication that Congress
intended to locate initial APA review of agency action in the
district courts, we will not presume that Congress intended to
depart from the sound policy of placing initial APA review in
the courts of appeals.” Id. at 745. That said, “[w]hether initial
subject-matter jurisdiction lies initially in the court of appeals
must of course be governed by the intent of Congress and not
by any views we may have about sound policy.” Id. at 746.
Applying these principles to the statutes before it, the Court
held that the challenge at issue should proceed in the court of
appeals, especially given the legislative history indicating that
Congress favored initial appellate review. See id. at 737–41,
746.
Petitioners interpret Lorion as requiring us to resolve any
ambiguity in section 25 in favor of initial appellate review.
But petitioners have pointed to no ambiguity. See American
Portland Cement Alliance v. EPA, 101 F.3d 772, 779 (D.C.
Cir. 1996) (declining to apply Lorion when the jurisdictional
statute was unambiguous). Although it is true that the
legislative history of Dodd-Frank tells us nothing about what
Congress intended with respect to section 13(q), we do know
that since 1975 Congress has made clear that for the courts of
appeals to have original jurisdiction over a challenged
regulation, the authorizing provision of the statute must
appear in section 25(b). And as noted above, Congress not
only enacted section 25(b) knowing that district court review
would be less efficient, but it then reinforced this approach in
1990, just five years after Lorion. In other words, unlike in
Lorion, where the indicators of congressional intent favored
14
initial appellate review, all indicators here call for applying
the statute’s basic rule of decision: if the substantive provision
is not listed in section 25(b), courts of appeals lack original
jurisdiction.
But there is a potential glitch. When Congress enacted
Dodd-Frank, it re-numbered section 9(h)(2)—the market
volatility provision added in 1990—as section 9(i)(2), but
failed to make a corresponding amendment to section 25(b)’s
cross-reference to section 9(h)(2). See Pub. L. No. 111-203,
§ 929X(b)(1), 124 Stat. at 1870. If this suggests that Congress
forgot about section 25’s jurisdictional scheme with respect to
section 9(h)(2), perhaps it also forgot about the provision with
respect to section 13(q), thus creating an ambiguity that could
trigger Lorion. Although petitioners failed to notice this
problem, we must address it because “[a] federal court has the
duty to determine whether it has subject-matter jurisdiction.”
Bouchet v. National Urban League, Inc., 730 F.2d 799, 805
(D.C. Cir. 1984).
In the end, section 9(h)(2)’s re-numbering does not
change our analysis. Congress’s failure to update section
25(b) was far more likely the result of a scrivener’s error. The
Dodd-Frank Act is an enormous and complex statute, and it
contains other scrivener’s errors—for example, the same
section now has two subsections numbered 9(j). See 15
U.S.C. § 78i(j). Section 9(h)(2)’s re-numbering thus offers us
no insight into whether Congress might have overlooked
section 25(b). To be sure, we might well suspect that this is
exactly what happened, but we have no authority to speculate
about congressional intent, especially when our jurisdiction is
at stake. See Sierra Club v. Thomas, 828 F.2d 783, 792 (D.C.
Cir. 1987) (explaining that appellate “courts have just so
much jurisdiction as Congress has provided by statute”). We
act on the basis of statutory language and probative legislative
15
history—all of which here indicate that this court has original
appellate jurisdiction only over challenges to regulations
whose authorizing provisions appear in section 25(b). A
clerical error gives us no reason to depart from this scheme.
Indeed, reading too much into a mere clerical error would run
the risk of contravening Lorion’s reminder that questions of
appellate jurisdiction “must of course be governed by the
intent of Congress and not by any views we may have about
sound policy.” Lorion, 470 U.S. at 746; see also Five Flags
Pipe Line Co., 854 F.2d at 1441 (“[T]his court simply is not at
liberty to displace, or to improve upon, the jurisdictional
choices of Congress—even when it legislates by potpourri—
no matter how compelling the policy reasons for doing so.”).
Finally, echoing the reasoning in Investment Company
Institute and Lorion, petitioners complain that forcing this suit
to proceed first in district court would be inefficient because it
requires no fact-finding and would simply delay the ultimate
resolution of the case. But as we indicated above, see supra at
9–10, when Congress passed section 25(b), it knew it would
be sending some cases to the district court that require no
fact-finding. Indeed, under the Administrative Procedure Act,
many challenges to agency regulations are heard first in the
district court and then reviewed de novo by this court. To be
sure, this may not be the most efficient way to resolve such
cases, and we certainly understand petitioners’ desire to have
these important issues addressed expeditiously. But it is
Congress’s job, not ours, to determine “ ‘the court in which
judicial review of agency decisions may occur.’ ” Watts, 482
F.3d at 505 (quoting Five Flags Pipe Line Co., 854 F.2d at
1439).
III.
For the foregoing reasons, we dismiss the petition for
review for lack of jurisdiction. Because petitioners have
16
“simultaneously filed a complaint in the district court, we
need not consider transferring the petition to that court.”
National Automobile Dealers Association, 670 F.3d at 272;
see also 28 U.S.C. § 1631 (authorizing the transfer of a case
when “there is a want of jurisdiction”). Additionally, our
dismissal of the petition is without prejudice to petitioners’
suit in the district court. See National Automobile Dealers
Association, 670 F.3d at 272.
So ordered.