MetLife Seeks Timeout in Litigation Over SIFI Designation
April 26, 2017 by Frank Klimko
WASHINGTON – Attorneys for MetLife Inc. have asked a federal appeals court to suspend proceedings in litigation over the legality of its systemically important financial institution designation while the U.S. Treasury Department reviews the SIFI selection process and the authority of the Financial Stability Oversight Council.
“If the Treasury secretary’s inquiry confirms that FSOC followed flawed procedures when designating MetLife, those findings should prompt the government to reconsider its position on one or more issues in this appeal or conclude that it is no longer appropriate to pursue this appeal at all,” said the motion by attorney Eugene Scalia, of Gibson, Dunn & Crutcher, who represents MetLife.
“At a minimum, the report could substantially inform this court’s consideration of the parties’ arguments and the district court’s decision in this case,” Scalia said.
Last week, President Donald Trump signed an executive memorandum directing Treasury Secretary Steven Mnuchin to suspend any new SIFI designations for nonbanks while the government reviews the process. He is to report back to the White House by Oct. 18 (Best’s News Service, April 21, 2017).
Scalia filed the motion in an appeal brought by U.S. Justice Department attorneys representing the FSOC. They are seeking to reverse a March 30, 2016 decision by U.S. District Judge Rosemary M. Collyer, of the U. S. District Court for the District of Columbia. Collyer ruled the FSOC did not follow its own rules (Best’s News Service, Aug. 16, 2016).
In seeking the appeal, government attorneys argued Collyer ignored the broad discretion given to agencies in applying regulations.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments on Oct. 24, but has not yet rendered an opinion.
A spokesman for MetLife said the company would not comment beyond what was included in the filing.
Two other insurers have also been designated — American International Group Inc. and Prudential Financial Inc. Neither has sued.
Operating units of MetLife have current Best’s Financial Strength Ratings of either A (Excellent) or A+ (Superior).
On the afternoon of April 24, shares of MetLife Inc. (NYSE: MET) closed at $52.02, up 1.46% from the previous close.
(By Frank Klimko, Washington correspondent, BestWeek: Frank.Klimko@ambest.com)
