A federal judge in Washington, D.C., on Wednesday stayed an oil industry lawsuit against the Securities and Exchange Commission pending the outcome of an appellate court’s review of an SEC rule at the center of the suit.
Led by the American Petroleum Institute, industry plaintiffs in October filed suit to overturn a new SEC rule that will require U.S.-traded oil and gas companies to disclose individual and aggregate oil-project payments to governments of $100,000 or more.
The industry says the rule, an anti-corruption measure mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, is an overly burdensome requirement that could create competitive disadvantages. The SEC last month declined to delay enforcement of the rule, which took effect on Nov. 13, pending the outcome of the litigation.
To resolve questions over jurisdiction on SEC rules, the plaintiffs brought action in both the U.S. District Court and the U.S. Court of Appeals in the District of Columbia. In briefing the court of appeals, both the SEC and the plaintiffs have argued that the appellate court has jurisdiction to review the rule, a position opposed by Oxfam America, which was granted permission to intervene last month.
The plaintiffs on Monday lodged a formal request for the court of appeals to review the rule and on Tuesday the SEC filed a motion in the district court seeking a stay pending the outcome of the court of appeals review, observing that both the plaintiffs and the SEC agreed on the proper venue for the matter.
In a ruling on Wednesday, U.S. District Judge John D. Bates of the District of Columbia ordered that the U.S. district suit be stayed “until the Court of Appeals for the District of Columbia Circuit issues its final order regarding plaintiffs’ petition for review.”
Briefing in the court of appeals is due to conclude on Jan. 28.
The plaintiffs are the American Petroleum Institute, the U.S. Chamber of Commerce, the Independent Petroleum Association of America and the National Foreign Trade Council.
The plaintiffs are represented by Eugene Scalia, a partner at Gibson, Dunn & Crutcher LLP. API is additionally represented by Harry M. Ng and Peter C. Tolsdorf while the U.S. Chamber is represented by Robin S. Conrad and Rachel Brand.
Senior Litigation Counsel William K. Shirley has acted for the SEC in the matter. In notices filed with the District Court on Tuesday, John P. Sholar, Richard M. Humes and Samuel Forstein signaled their intention to appear for the SEC.
Oxfam America, an intervenor, is represented by Howard M. Crystal of Meyer Glitzenstein & Crystal and Marco Simmons of EarthRights International.
The District Court case is 12-1668. The Court of Appeals case is 12-1398.
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