In Financial Planning Ass’n v. S.E.C, a panel of the D.C. Circuit Court of Appeals considered whether a final rule promulgated by the SEC exceeded the rulemaking authority delegated to the agency by the Investment Advisors Act (IAA). The rule exempted a category of broker-dealers from the IAA “when [those broker-dealers] receive special compensation therefor.” The Financial Planning Association (FPA) sought review of the final rule on the ground that the SEC had exceeded its rulemaking authority. Two members of the three-judge panel agreed, and after resolving an initial question of the FPA’s standing, they addressed the statutory delegation question.
The IAA carves out six exemptions from its definition of “investment advisor,” including an exemption for “any broker or dealer  whose performance of such services is solely incidental to the conduct of his business . . . and  who receives no special compensation therefore” at 15. U.S.C. § 80b–2(a)(11)(C). Subsection (F) contains a non-specific exemption: “such other persons not within the intent of this paragraph, as the Commission may designate . . ..” Judge Rogers argued that because “any” from (C) is ordinarily understood to mean “all-inclusive,” all brokers and dealers were therefore categorically distinct from the “other persons,” in (F). Thus, the plain meaning of the statute did not permit the SEC’s broadening of the exemption under (C) to include certain broker-dealers receiving special compensation. Because the court determined that Congress’s meaning was clear from the statute’s language and other contextual indicators of intent, Judge Rogers held that this question was resolved under Step One of the familiar Chevron agency deference analysis and therefore the SEC rule must be vacated.
In his dissent, Judge Garland disagreed that subsection (F) of the IAA exemptions was clear, arguing that the court was thus obligated to defer to the SEC’s interpretation of the statute under Step Two of Chevron. He disagreed that either “within the intent of this paragraph” or “such other persons” from subsection (F) gave rise to a single meaning. He argued that the court’s reliance on the expressio unius canon in their reading of “within the intent of this paragraph” was misplaced in an administrative context. Furthermore, Judge Garland found that defining “other” did not resolve the question of whether “any broker or dealer” should be read independently or as modified by “whose performance of such services is solely incidental . . . and who receives no special compensation….” Therefore, the court should have deferred to the SEC if their construction was reasonable. “There is nothing implausible about interpreting [‘other persons’] to encompass anyone not actually exempt under one of the five preceding exceptions,” Judge Garland wrote. “The SEC does not rewrite the statute . . . [r]ather, it gives effect to one of two plausible interpretations of statutory language.” Similarly, he found the SEC’s case for its interpretation was compatible with the contextual reasons Congress had for enacting the IAA, even though brokerage service packaging and fee structures had evolved since the IAA’s enactment. Concluding his dissent, Judge Garland dismissed the FPA’s concerns as policy matters better left to the agency than the courts.