Opinion ID: 4564398
Heading Depth: 2
Heading Rank: 3

Heading: the first proviso in the apa’s waiver of

Text: SOVEREIGN IMMUNITY DOES NOT BAR GENTILE’S CHALLENGE TO THE FORMAL ORDER OF INVESTIGATION. To defend itself, the SEC leads with the Sprecher argument. The SEC starts with the Second Circuit’s conclusion that subpoena enforcement actions under the Exchange Act, “are the exclusive method by which the validity of SEC investigations and subpoenas may be tested in federal courts.” Sprecher, 716 F.2d at 975. From that premise, the SEC argues that by providing the exclusive dispute mechanism, the Exchange Act imposes a limitation on judicial review. Thus, according to the SEC, Gentile’s action falls outside the APA’s waiver of sovereign immunity due to the first proviso, which ensures that the APA’s waiver does not 13 override “other limitations on judicial review.” 5 U.S.C. § 702. But that argument supposes that Gentile’s complaint challenges individual SEC subpoenas. And while Gentile does seek to quash every subpoena, he does so not due to any particularized defect in any subpoena. Rather, he does so by challenging the legality of the Formal Order of Investigation. And by directing his challenge to the SEC’s Formal Order of Investigation, Gentile avoids the SEC’s Sprecher argument, which involved a challenge to individual subpoenas – not solely a direct challenge to the agency’s decision to open an investigation. Thus, regardless of whether § 78u(c) of the Exchange Act provides the exclusive mechanism for challenging a subpoena, it does not bar Gentile’s challenge to a Formal Order of Investigation.