In the wake of Antonin Scalia’s February death, President Obama’s people put do what such people do in such situations: Put together a shortlist of potential replacements. Two of the names on that shortlist were Patricia Millett and Sri Srinivasan. Alas, they were ultimately deemed not old or white or male or moderate enough to be humiliated by Senate Republicans pretending they don’t exist while making up a new rule that says presidents can nominate Supreme Court justices for only three-quarters of their terms, and so were spared the indignities currently suffered by their colleague on the D.C. Circuit, Merrick Garland.
It’s safe to say that Millett and Srinivasan are likely to make any of Hillary Clinton’s high court shortlists. But until then, they have to go about their jobs as appellate court judges, which meant that yesterday they got to think about whether MetLife is too big to fail enough to be deemed too big to fail. And the answer is, maybe, but maybe not, because while the Financial Stability Oversight Council was given an admirably broad remit, but which is meant that Congress didn’t get too specific about what it was allowed to do or how it was allowed to do it, that doesn’t mean it can just do whatever the hell it wants, even if that means an obviously systematically important financial institution—systematically important enough to fire Snoopy, for one—is deemed systematically unimportant. Poignantly, they got to argue about just how arbitrary and capricious the FSOC can be with Nino Scalia’s son, Eugene, who happens to represent MetLife.
Judge Patricia Millett of the United States Court of Appeals for the District of Columbia said the regulators’ conclusions lacked “concreteness.”
“You’re not specific enough when you say, ‘Well, it’s a really bad situation so we assume bad things are going to happen,’” she said….
While the line of questioning at the hearing appeared sympathetic to MetLife’s arguments, the judges also asked some pointed questions of the insurer’s lawyer, Eugene Scalia, son of Antonin Scalia, the late Supreme Court justice. They pressed him about whether regulators had acted within the law in applying the SIFI designation, even if they did not conduct the exact analysis that the insurer itself would have preferred.
In addition, the judges asked Mr. Scalia about whether it was the job of the regulatory council to estimate the potential costs and benefits of the SIFI label.