thank you rod and it may please the court jonathan franklin for the appellants i realize it is no accident or i think it's no accident that we're hearing this case today the same day as we've just heard that case i'd like to emphasize at the outset that there are similarities in our case and differences and that this limit similarities between our case in the prior case make our case strong in my view and the differences make it stronger just like in the prior case we are seeking an injunction against a proceeding an administrative proceeding that's being conducted without lawful that's a strong similarity and i think for many of the same reasons that the counsel for ms bennett has just laid out we would agree with them however in our case in their case to my knowledge there is no dispute that there is statutory authority to conduct that proceeding that congress intended for that particular kind of claim to be brought in the particular tribunals in our case we are challenging the statutory authority of this agency to conduct these prosecutions to begin with right now you're challenging fenris authority to discipline you for violations of the securities that when it was created in operate under the authority of the exchange argument is that every claim that's being brought against appellants in this case is predicated or turns on an alleged violation of the securities act not the exchange act why is that i'm sorry you haven't listed go  ahead list your four ok third your honor if there is no prior judicial review it allowing the agency the same agency that brought these charges in the first place to adjudicate them would threaten to deprive palance of the very livelihoods and their business given norma's that they're already over broker dealers and fourth and finally and this is a point that was made the priority and in less congress has abrogated it does the jurisdiction does exist in the district court to review the claim that we are bringing that the agency is acting outside of its statutory authority and i think all four of these points that it is not contest any of these points in its brief and they form the backdrop for the case specific inquiry that the court has to look into to determine whether or not congress has in fact stripped the jurisdiction of the district courts to hear this kind of claim and i would emphasize as counsel ms bennett did that this is a claim and case pacific inquiry and we do judge matson and the rest of the court we do you know believe that the dissenting opinion in the tilton case got it correct that the argument that's being made the other side essentially proves far too much but whether the court looks at it under the lead i'm test which we've advocated which applies to these kinds of claims statutory claims or looks at it under the thunder basin free enterprise test alternately the question is one of statutory intent respects the lead in doctrine which does apply to our case and not their case because it's a statutory claim but now we think about her basic test does apply it was him applied incorrectly in our case and it was applied incorrectly ultimately because the question is one of statutory intent what did congress intend and we submit that congress having delineated the statutory authority of the agencies and having said and having said that period does not have authority to prosecute violations of the securities act congress could not have intended and did not intend for the finra to decide for itself whether it can exercise that prohibited authority in a proceeding that it had no authority to institute in the first place i so i i take i take that point ok my question would be fine conceded conceding everything you say honor first point is the irreparable harm point which i don't believe the other side has contested and that is that if these proceedings are allowed to take their course our clients my clients the balance in this case would suffer or potentially suffer the loss of their very livelihoods and their business it has a monopoly over broker dealerships in this country so that if you want to practice in this prayed you need to have a license and if they carry through with their sanctions we would we would suffer the kind of irreparable harm that has allowed these claims to proceed in court in other cases it is argued exactly this kind of harm to anyone who is  so there could be various different kinds of proceedings that are brought in various different kinds of agencies not everyone can make this secondo even if the court wants to discount that back door moving on we have the same problem that we faced in the bennett case as well and that is that the harm that we are suffering is the harm from going through this prohibited proceeding to begin with this ultra vires proceeding and once we're in that once that proceeding is ongoing that harm exists and it can't the genie can't be put in the bottle back in the bottle that the humpty dumpty problem exists and third i would like to point out another point and that is the f c c says we can come in and we can clean all of this up after the fact but that's not true either because in order for us to get to court we have to suffer through an adverse determination by the f c c our view is looking at the plain language of the statute the f c c does not have authority to to review these issues the f has primary jurisdiction to consider for the in the first instance whether or not these charges are justified and so by the time we have got into court the f c c will of already made a determination on the merits of our claims a determination e put back into the tube in our case and so what we submit is that we are entitled to a district court determination by a court of law which has the same or or even perhaps better a federal cause of action if you and sure absolutely there has long been since ex parte young and going back even before that there has always been an equitable power in the district court to  was that you don't have statutory authority to collect fines in court and the second circuit said yes you have a cause of action that arises under federal law because you're raising a federal question and you're seeking declaratory and injunctive relief and it's not not in the briefs but it's a case called armstrong and it's cite as one thirty five supreme court thirteen seventy eight from twenty fifteen and the supreme court there went through the difference between the right of action when you're seeking is that there always is inherent jurisdiction and the inability of the courts under the all writs act in others to to restrain a government or fish or an agent that is acting outside of his lawful authority except a congress is taking him away so it's kind of a reverse from what the private right of action for damages would be so we have that here we have a right just as in fear we have a right of declar give me a junction to carry out what you do is rule it's equitable though you still have what i'm trying to distinguish here is that we're not we're not seeking a private right of action for damages which is another entirely different inquiry we're seeking the standard kind of relief everything that you're trying to shut down administrative measures and now we're trying to shut down this particular proceeding you're i'm not not the industry you want to just use here you're trying to shut it down i think that the other day if you get away with this if we agree with y for us to get to that point judge king we're not we're not arguing that everybody has the same right here and i would say that we're actually arguing for a kind of a narrower relief than than the bennett parties party was because we're we're asking only that all right it depends on your eyes so so i think to get back to what i was saying alternately i think this is a question of congressional intent and we don't believe that that congress having not given the agency in this is i believe been contested i don't think there's any contest here that the only express statutory authority that they have to prosecute statutory violations is the exchange act and they're saying they can just get around that by by characterizing any other statute then after lead them we have the board of governors federal reserve system versus them corps right and that case says first central to our decision and leave them with the fact that the board's interpretation of the act would wholly deprive the of a meaningful and adequate means of vindicating statutory right you're not been deprived of that right we i think that's the same are we understand to be the same as the as the one of the factors that the to base in fact exactly but you're making i thought proceedings dating back many years and that's because congress made self regulation the beginning point for regulation of the broker dealer industry and that's how the process  you might not like what happened that recall but you kind of stuck with it for purposes of a question and understood understood and i think if there is a statutory review scheme that is in place that calls for an exclusive method of administrative followed by judicial review that bad is the process that has to be gone through the next with that and that's what an employer would have to do to challenge osha regulatory that is then the final action fan room and of course here what's happened is we've just we've had a hearing there's been no even initial decision that's been reached yet and so there's been no final action now if there were a final action of finra that was appealed to the f c c there's an automatic stay under federal rules of any sanction that's imposed unless it's a bar or expulsion from the industry in which case the respondent has to make an application to the  defer to my two counsel for the i c c to answer that question i think i think it's a case by case basis well i thought you were offering this as sort of a sop to well the status quo stays for meaningful review it and my only point here your honor is clearly that here there is the opportunity for meaningful administratively followed by meaningful judicial review ok can i use you because with the court i think there's some question about it actually the parties did not engage on that question and gauge on appeal either and we really have not i do think that it's clear that the declaratory judgment act standing  itself is does not confer jurisdiction or create a cause of action so i think that i think that it is a a legitimate and an open open question right now or are you pursuing well your honor i think the other i think the other issues here frankly are are dispositive i think that this is the type of challenge that is the rule that is involved here two rules that are issue in this case now only one of them has been mentioned abide by scottsdale the first one is the principle requiring just an equitable principles of trade conduct in accordance with just an equitable principle of trade rule twenty ten but there are also in the second and third cause of action in the underlying pending complaint there are there are costs of action that have been brought charges that have been brought for violating the three causes of action here involve involve those rules and and under those rules these are rules that have been in place for quite some time but they require member firms in the words of the ninth circuit in the deputy c corp versus i c c case to establish maintain and for supervisory systems tailored to their businesses and that are reasonably designed to achieve compliance with securities laws and regulations as well as  d rules and the rules says that the actual finra rule says applicable securities laws and regulations now finra has had in its rule books a number of rules relating to the private placements of securities for for some time because finra firms play a very critical role in preventing the illegal resale of restricted securities into the public markets i mean there are firms are the gatekeepers to the public markets and so are these rules in the go to federal c before it becomes effective and the f c c has to conclude that it complies with the purposes of the exchange act to protect investors and is otherwise in compliance with the purposes of the act so we have a rule for example in title private placements of securities we have a rule that's in title private placements of securities issued by members we and we have enforce those rules with respect to the ninth circuit case the sorrel versus s c c case and in that case a broker was charged by the n a s d with selling unregistered securities and therefore violating the just an equitable principles of trade rule and individual challenge he went through the minute it went through the process the individual challenge both the constitutionality of our enabling legislation the maloney act and also the fact that the challenge of the joint negative will rule as being void for vagueness and here's what the ninth circuit had to say in denying the petition for review from an f c c order in that case quote evaluating his the broker's vagueness claim in the context of his violations selling unregistered securities we find sorel the broker had adequate notice that such an obvious violation of the securities laws would also violate section one section one of the unit as the rules at the time was that just an equitable principles of trade rule and rule that's being challenged in this proceeding by scottsdale is federal rule twenty ten right it's the exact same rule right that was the subject of and their position is is tha authority to bring this proceeding or by the way any other perceiving that it doesn't really seem to go i think to the question of whether there is the availability of meaningful the dish will review right first a challenge they challenge fenriz enabling legislation is being unconstitutional in that case in that case correct and then they also challenge the specific rule that was being applied to the broker for selling unregistered shares of securities under the thirty three act right and as being and presumably it would be your position that the process the multilayer process created under the securities and exchange commission precisely your honor and most particularly in the case of a challenge to an s r o proceeding where congress required self regulation to be the beginning point for the regulatory process and the entire review scheme exchanges the constitutional challenge was that the maloney act was an unconstitutional delegation of legislative authority to fan iran which is of course a a private entity it's a national security self regulatory organization but it is not a government agency so that was the nature of that challenge i see my time is up your hon preview scheme set forth in the exchange act i'd like to get to begin by starting with whether this is a question of exhaustion versus exclusivity we agree with the district court that the proper way to frame this issue is exclusivity rather than exhaustion more recent supreme court cases like thunder bay san elgin and free enterprise all framed the question is one of exclusivity as do the court courts of appeals that have addressed this issue previously and we think they do that for a reason exclusivity and exhaustion are different exhaustion presumes that there could be district court jurisdiction whereas exclusivity forecloses district court jurisdiction once and for all we think the critical difference concerned about preserving here that's the first principle but we're also very much concerned with the exclusive review scheme as well and on to that particular point i'd like to just sort of start at the outset that elgin on page twenty one thirty one also involved the claim for  e relief under basement basin reference pre enforcement injunctive relief on page two of five and standard oil also involved a claim for injunctive relief and so i don't think that is the crux of the issue otherwise as judge king pointed out anyone could add on a claim for injunctive relief to circumvent a comprehensive exclusive reviews seem review is exclusively in the court of appeal exactly under section one of appeal two options either the c circuit or under section twenty five a the exchange act where you reside or your principal place of business would be the portion arc of this i think that would be correct your honor but regardless of whether it's the d c circuit or the fourth circuit it's certainly not the district court and the question for whether it's fairly discernible whether the exclusive resume review scheme applies i think hill in the eleventh circuit had it right when asked is the challenge essentially an objection to a forthcoming commission order and that's certainly the case here but plaintiffs however are that are urged that their skin fall outside that scheme first they say there's not going to be any meaningful judge judicial review that is simply incorrect a the exchange at this court's cases the next national taxpayers union judge king your blitz opinion and also judge michaels virginia versus united states all keyed in on this very particular factor is there meaningful judicial it says that the commissions job in reviewing the particular decision is to determine whether what finra did was consistent with the purposes of the exchange act if you answer no i think we win both cases but we could win this case even if we did not prevail under nothing but i did and i'm sorry tell me again why how that so they don't rise and fall together necessarily we think they do rise and fall together but it's a one way ratchet way but it's a one way ratchet i think it would be very difficult to see how we would win in bennett and lose in this particular case and i would just like to sort of refer to the court to section nine hundred eighty one a the exchange act where the commission's job in its review is to look to see whether what finra did is consistent with the purposes of the exchange at and that speaks to first the exclusive or the meaningful just to review that's what the commission reviews and that's on review in a federal court of appeals and i also think it speaks to the agency expertise factor here we're talking about a commission approved rule rule twenty ten we're talking about the intersection between the exchange act and the securities act i can't think of a particular scenario which calls for greater agency expertise than what we necessarily win here is that which i think that's also correct john it would be difficult to see any reasonable scenario where we could prevail on bennett but but lose here because here again it's just a narrow focus on is doing in its interpretation of rule twenty ten correct we have expressed statutory language under section one thousand that allows the commission to review that precise question and then that can be reviewed further under section twenty five  thank your honour's if it is better wins i think we would have to win in this case because the meaningful review if there's no meaningful review there they're certainly not here either because the same issue is present we would also be going to have to go through a proceeding that we claim they have no authority to to institute the first place and to follow up on judge duncan your hypothetical i think they are arguing in this case that they could charge us with a violation of any statute and i trust law as the f d a act what it doesn't matter all they have to do is call it a just an equitable principle of trade and they can evade the specific principle that congress set forth and that is that the you have me why don't you have an opportunity for meaningful edition review at the end of the administrative process the underlying question remains but it's not meaningful because the harm of going through the proceeding in the first place which we claim was altered virus will have already occurred by that point it's not meaningful because the harm of the sanctions that are being exposed to the process yes it's not meaningful because the harm of the sanctions that would be imposed by the time we got to court would be suffering sanctions would would be irreparable to my clients and their business and their answer i think lies well actually almost everybody is when they get up here i has that any different can they just decide that they're going to go right into court and it's different you're on a project for the reason that you just mentioned that is that some statutes require them to do that they require that they do it in a proceeding that the agency has the authority to institute and proceed that would be outside the authority and so we're saying that that is different in this situation because here we have an agency acting outside its authority in the hypotheticals that you can postulate their agencies inside their authority and back in the bennett case again i think it was conceded yes simply put your honor in their case there is no question that congress intended that for that agency to adjudicate that proceeding in our case it did not on just on briefly on the cause of action issue i think it's been waived i think it's an interesting issue we presented it in our you're on it we're claiming that under the various exceptions because here's the point is this and this is what i started with and that is that jurisdiction does exist in the district court in less congress has abrogated it we start from that principle federal question jurisdiction exist the jurisdiction of the exchange as it exists unless it's been stripped by congress and the question ultimately is did congress strip the jurisdiction of the district courts to hear this case and do it implicitly and our point is that if congress did not give the authority to this agency to prosecute these claims in the first instance it could not have intended for this issue to be raised during that prohibited proceeding thank you very much