MetLife, Inc. v. Financial Stability Oversight Council

Case Updates

The U.S. District Court for the District of Columbia issued an order striking down the order of the FSOC designating MetLife as a systemically important nonbank financial institution under the Dodd-Frank Act.

The U.S. Chamber filed an amicus brief in the U.S. District Court for the District of Columbia in support of MetLife’s challenge to its designation as a systemically important financial institution (SIFI) under Dodd-Frank. In December 2014, the Financial Stability Oversight Council (FSOC) made a final determination to designate MetLife as a SIFI, pointing to two “channels” as bases for its designation: (i) potential risks to counterparties and market participants that may arise from exposures to the company; and (ii) the potential that a “fire sale” of the company’s assets could disrupt financial markets. At no point, however, did FSOC take into account whether or how plausible it may be that MetLife could find itself in “material financial distress.” FSOC simply asserted that it “is to assume material financial distress.”

The Chamber argued in its brief that the MetLife designation ignores statutory factors requiring that the Council first analyze whether there is the potential for material financial distress, and that FSOC’s designation is arbitrary and capricious because it substitutes conclusory statements for reasoning, insufficiently responds to contrary evidence in the record, and fails to consider certain historical realities of the insurance business.

Steven G. Bradbury, Thomas P. Vartanian, Robert H. Ledig, and D. Brett Kohlhofer of Dechert LLP represented the Chamber as co-counsel to the U.S. Chamber Litigation Center.