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FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 31, 2026
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
SCOTTSDALE CAPITAL ADVISORS,
an Arizona corporation,
Plaintiff - Appellant,
v. No. 25-4000
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:18-CV-00504-CW)
Maranda E. Fritz, Maranda E. Fritz PC, New York, New York (Aaron D. Lebenta, Clyde Snow & Sessions, P.C., Salt Lake City, Utah, with her on the briefs), for PlaintiffAppellant.
Rachel M. McKenzie, Senior Appellate Counsel (Jeffrey B. Finnell, Acting General Counsel; Tracey A. Hardin, Solicitor; Daniel Staroselsky, Assistant General Counsel; and Stephen Silverman, Appellate Counsel, with her on the brief) Securities and Exchange Commission, Washington, D.C., for Defendant-Appellee.
Before HARTZ, KELLY, and TYMKOVICH, Circuit Judges.
HARTZ, Circuit Judge.
Plaintiff Scottsdale Capital Advisors is a retail brokerage firm and registered
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broker-dealer. It sued the Securities and Exchange Commission (SEC) in the United
States District Court for the District of Utah, challenging Exchange Act Rule 17a-8,
which requires brokers and dealers to comply with certain reporting and record-retention
requirements imposed by the Treasury Department under the Bank Secrecy Act (BSA).
Scottsdale claims that the SEC violated the Administrative Procedure Act (APA) by
using Rule 17a-8 to impose BSA requirements on broker-dealers.
To pursue a challenge under the APA, the challenger must identify an unlawful
“final agency action.” 5 U.S.C. § 704. The action selected by Scottsdale was the SEC’s
filing an enforcement action in New York federal court against Alpine Securities
Corporation, a self-clearing broker-dealer which shares common ownership with
Scottsdale. The Utah federal court dismissed Scottsdale’s complaint for lack of statutory
standing because Scottsdale had not challenged a final agency action. See Alpine Sec.
Corp. v. SEC (Scottsdale), No. 2:18-CV-00504-CW-CMR, 2024 WL 4681816, at *9–13
(D. Utah Nov. 5, 2024). Exercising jurisdiction under 28 U.S.C. § 1291, we agree and
affirm the dismissal.
I. BACKGROUND
A. Regulatory Background
The dispute before us concerns regulations requiring banks and other financial
institutions to maintain records of potentially suspicious financial transactions. In 1970,
Congress enacted the BSA, Pub. L. No. 91-508, 84 Stat. 1114 (1970), and the Treasury
adopted implementing regulations. See Financial Recordkeeping and Reporting of
Currency and Foreign Transactions, 37 Fed. Reg. 6912, 6912–15 (Apr. 5, 1972); see
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generally SEC v. Alpine Sec. Corp. (Alpine IV), 982 F.3d 68, 73–75 (2d. Cir. 2020)
(discussing history of BSA and Rule 17a-8). But it left to the SEC the task of ensuring
that “brokers and dealers in securities” complied with those BSA regulations. 37 Fed.
Reg. at 6915. To that end, the SEC relied on Section 17(a)(1) of the Exchange Act of
1934, 15 U.S.C. § 78q(a)(1), 1 to promulgate Rule 17a-8, requiring brokers and dealers to
“comply with the reporting, recordkeeping and record retention requirements” that had
been imposed by the Treasury under the BSA. Recordkeeping by Brokers and Dealers,
46 Fed. Reg. 61454, 61455 (Dec. 17, 1981). Critically, the SEC did not set out specific
recordkeeping requirements in Rule 17a-8 because it intended the rule to track, and
evolve with, the Treasury’s regulations. See id. (explaining that “[t]he rule does not
specify the required reports and records so as to allow for any revisions the Treasury may
adopt in the future”).
Since the SEC adopted Rule 17a-8 in 1981, there have been a handful of changes
to this regulatory scheme. In 1990, for example, the Treasury established the Financial
Crimes Enforcement Network (FinCEN) and delegated to it the authority to identify
noncompliance with the BSA. See Organization, Functions, and Authority Delegations:
Financial Crimes Enforcement Network, 55 Fed. Reg. 18433, 18433–34 (May 2, 1990).
Despite these changes, the division of labor between the Treasury and the SEC has
1
Section 17(a)(1) requires brokers and dealers to “make and keep for prescribed periods such records . . . and disseminate such reports as the Commission, by rule, prescribes as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter.” 15 U.S.C. § 78q(a)(1).
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remained the same: the Treasury updates the rules generally, and the SEC enforces them
insofar as they apply to brokers and dealers. See Alpine IV, 982 F.3d at 78–79 (“[T]he
Treasury and the SEC have plainly worked in tandem, issuing policy statements and
reports, and initiating enforcement actions since the BSA’s inception”).
Thus, when the Treasury expanded its regulations in 2002 to require brokers and
dealers to file Suspicious Activity Reports (SARs), it left it to the SEC and selfregulatory organizations (comprising registered securities associations and national
securities exchanges) to “address broker-dealer compliance” under Rule 17a-8. Financial
Crimes Enforcement Network; Amendment to the Bank Secrecy Act Regulations—
Requirement that Brokers or Dealers in Securities Report Suspicious Transactions,
67 Fed. Reg. 44048, 44049 (July 1, 2002). Scottsdale takes issue with this division of
labor. It contends that the SEC has violated the APA by relying on Rule 17a-8 as
authorization to enforce the Treasury’s SAR regulations without complying with the
notice-and-comment requirements of the APA to promulgate its own regulations. See
Alpine IV, 982 F.3d at 80–81 (rejecting Alpine’s claim that Rule 17a-8 violates the
APA by automatically incorporating future BSA requirements).
B. Procedural History
In June 2017 the SEC filed a judicial enforcement action against Alpine in the
Southern District of New York. The SEC alleged that Alpine had violated Rule 17a-8
thousands of times by failing to file SARs, filing deficient SARs, or failing to retain
documentation for filed SARs. Scottsdale was not a named party in that action, but it
shares common ownership with Alpine. And for most of the suspicious transactions at
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issue in the Alpine action, Scottsdale was the “introducing broker,” SEC v. Alpine Sec.
Corp. (Alpine III), 413 F. Supp. 3d 235, 240 (S.D.N.Y. 2019)—that is, it performed the
customer-facing services, see Henry F. Minnerop, Clearing Arrangements, 58 Bus.
Law. 917, 920–23 (2003) (explaining clearing arrangements and difference between
clearing and introducing broker-dealers).
Alpine moved for summary judgment “principally on the ground that the SEC is
not authorized to enforce BSA regulations via Rule 17a-8.” SEC v. Alpine Sec. Corp.
(Alpine I), 308 F. Supp. 3d 775, 795 (S.D.N.Y. 2018). It also moved for judgment on the
pleadings on the ground that the SEC had failed to plead that Alpine had the mens rea
required to violate the BSA. See id. at 797–98. The district court denied both of Alpine’s
motions and granted the SEC’s cross-motion for summary judgment on a number of
claims. See id. at 812.
Just four days after the New York district court denied Alpine’s requests for
reconsideration or appellate certification of the order granting partial summary judgment,
Alpine and Scottsdale jointly filed this lawsuit in Utah federal district court seeking
declaratory and injunctive relief against the SEC under the APA, 5 U.S.C. §§ 551–559,
701–706. The New York district court promptly enjoined them from pursuing the Utah
action until the conclusion of any appeal from that court’s final judgment. See Scottsdale,
2024 WL 4681816, at *5. The Utah court stayed this action in accordance with that
injunction. Meanwhile, the SEC won partial summary judgment on additional claims in
New York, decided not to pursue the claims on which it had not obtained a summary
judgment, and obtained a $12 million civil penalty against Alpine. See SEC v. Alpine Sec.
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Corp. (Alpine II), 354 F. Supp. 3d 396, 445 (S.D.N.Y. 2018) (summary judgment for
SEC); Alpine III, 413 F. Supp. 3d at 244, 251 (voluntary dismissal and civil penalty). The
Second Circuit affirmed both the summary judgment and the penalties. See Alpine IV,
982 F.3d at 76, 80–81, 86. Once the District of Utah lifted its stay, Alpine voluntarily
dismissed its claims. But Scottsdale proceeded.
Scottsdale’s amended complaint said that it sought to “establish the invalidity
of the SEC’s attempt to use Exchange Act Rule 17a-8, 17 C.F.R. § 240.17a-8, to
enforce, administer and interpret the . . . SAR . . . regulations of the Bank Secrecy
Act.” Aplt. App., Vol. I at 11. The SEC moved to dismiss Scottsdale’s amended
complaint, arguing that Scottsdale “failed to identify final agency action subject to
APA review, that it lacked Article III standing, and that its claims were untimely
because any final agency action subject to APA review occurred many years before
Alpine and Scottsdale filed this lawsuit.” Aplee Br. at 13.
In its brief in opposition, Scottsdale said multiple times that the final agency action
it was challenging was the filing of the Alpine enforcement action. See, e.g., Aplt. App.,
Vol. I at 136 (“The final agency action giving rise to Scottsdale’s claim is the filing of the
Alpine Enforcement Action”); id. at 160 (“To the extent it is necessary to pin-point a
more concrete final agency action than the SEC’s abject disregard of the procedures
imposed upon it by law, this can be easily accomplished by viewing such action as the
Commission’s approval of the filing of the Alpine Enforcement Action”). And at a
hearing before the district court, Scottsdale’s counsel reiterated that “[t]he final agency
action in this, under these peculiar circumstances, was the Alpine case.” Aplee. Suppl.
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App. at 94; see id. at 93. Until the Alpine action, argued Scottsdale, “the SEC had never
issued a statement, had never stated to the industry, and had never adjudicated the issues”
that the agency presented in that case. Id. at 94. 2 As Scottsdale saw it, it was the SEC’s
positions in the Alpine action that subjected Scottsdale to a new SAR enforcement regime
and exposed it to new regulatory burdens. The district court granted the SEC’s motion
to dismiss on several grounds, including that Scottsdale “lacks statutory standing to
bring its claims in this action” because the SEC’s decision to file the New York
action against Alpine “was not final agency action.” Scottsdale, 2024 WL 4681816,
at *13. 3
2
Scottsdale argues on appeal that the district court erred because it “narrowly focused” on the SEC’s decision to file the Alpine action. Aplt. Br. at 28. It says for the first time that the final agency action here could have been a “series of agency pronouncements.” Id. at 29 (quoting Barrick Goldstrike Mines Inc. v. Browner, 215 F.3d 45, 48 (D.C. Cir. 2000)). Scottsdale also relies on the Supreme Court’s decision in Corner Post v. Board of Governors of Federal Reserve System, 603 U.S. 799 (2024), to argue that it can challenge earlier final agency actions, such as the promulgation of Rule 17a-8 in 1981, because it was not injured until the Alpine action. We need not consider these arguments because they were not raised below. See Miller v. Pfizer, Inc., 356 F.3d 1326, 1336 (10th Cir. 2004). The only final agency action that Scottsdale identified below was the filing of the Alpine action. Scottsdale’s counsel conceded this at oral argument. See Oral Arg. Tr. at 1:48–2:25 (“The Court: You make those arguments on the merits thoroughly in your briefing, but the question is, or at least one of the questions is, you have to be challenging a final agency action, and the only action, the only thing you identified as final agency action in the district court, you repeatedly said, was the filing by the SEC of the complaint in federal district court in New York.” Counsel: “That is correct.”)
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The district court further held that even if there had been a final agency action here, Scottsdale still lacked statutory standing because it “ha[d] not alleged facts sufficient to show that it ha[d] suffered a ‘legal wrong’ or been ‘adversely affected or aggrieved within the meaning of the relevant statute’” because of the SEC’s decision to file the New York action against Alpine. Scottsdale, 2024 WL 4681816, at *13 (ellipsis omitted). Because we agree with the first ground relied on by the district court, we need not reach its alternative ground. Nor need we reach the issue of Article III standing. See
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II. DISCUSSION
A. Final Agency Action
There being no relevant factual disputes, we review de novo the district court’s
dismissal of Scottsdale’s APA claim for lack of subject-matter jurisdiction. See Custodia
Bank, Inc. v. Fed. Rsrv. Bd. of Governors, 157 F.4th 1235, 1248 (10th Cir. 2025) (treating
the final-agency-action requirement as jurisdictional). The sole question before us is
whether the SEC engaged in a final agency action when it decided to sue Alpine in
the Southern District of New York. We hold that it did not.
Where review of an agency action is not expressly provided for by statute, judicial
review under the APA is available only for “final agency action for which there is no
other adequate remedy in a court.” 5 U.S.C. § 704; see Custodia, 157 F.4th at 1249. Once
a final action has been identified, a reviewing court can “hold unlawful and set aside
[that] agency action [and the agency’s] findings[] and conclusions.” 5 U.S.C. § 706(2).
This court has recently set forth the requirements for agency action to be
considered final agency action for purposes of the APA. In Custodia we addressed the
issue as follows: Quoting the Supreme Court’s opinion in Bennett v. Spear, 520 U.S. 154,
177–78 (1997), we said that “[t]o be ‘final’, an agency action must (1) ‘mark the
consummation of the agency’s decisionmaking process—it must not be of a merely
tentative or interlocutory nature’; and (2) ‘be one by which rights or obligations have
Colo. Farm Bureau Fed’n v. U.S. Forest Serv., 220 F.3d 1171, 1173 (10th Cir. 2000) (no need to address Article III standing if statutory standing is lacking).
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been determined, or from which legal consequences will flow.’” 157 F.4th at 1249. And
we recognized that an agency action “must itself be the source of the parties’ obligations,
modifying the applicable legal landscape by interpreting the scope of their statutory rights
or duties.” Id. (brackets and internal quotation marks omitted).
Scottsdale challenges the SEC’s decision to file a complaint against Alpine in
federal court. But this action by the SEC does not satisfy the second part of the Bennett
test and therefore cannot be considered final agency action under the APA. We affirm the
dismissal of the complaint on this ground without deciding whether the SEC’s action
could satisfy the first part of the Bennett test. See Fairbanks N. Star Borough v. U.S.
Army Corps of Eng’rs, 543 F.3d 586, 593, 597 (9th Cir. 2008) (no jurisdiction where the
challenged action satisfied the first Bennett requirement but not the second).
Our analysis in Custodia is instructive. There, we considered whether an email
from the Federal Reserve Board (the Board) to the Federal Reserve Bank of Kansas City
(FRBKC) was a final agency action for purposes of the APA. Custodia Bank had
requested access from the FRBKC to a master account, which would have allowed it to
use various Federal Reserve services. See 157 F.4th at 1245. Although approval or denial
of such an account was a decision for the FRBKC, the Board had issued an internal
guidance document “provid[ing] that any Reserve Bank that is considering denying any
access request[] should consult the Board prior to communicating any decision to the
requesting institution.” Id. at 1245 (original brackets, ellipsis, and internal quotation
marks omitted). In compliance with this guidance, the FRBKC advised the Board of its
intent to deny Custodia’s request for access, and the Board responded with an email to the
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FRBKC saying that it had “no concerns” with that plan. Id. at 1249 (internal quotation
marks omitted).
We held that the Board’s email “fail[ed] the second prong of the Bennett test”
because it did not determine any rights or obligations and was not itself the source of any
legal consequences. Id. Nothing in the record suggested that the Board’s email “altered
the legal regime to which [FRBKC] was subject.” Id. (brackets and internal quotation
marks omitted). Rather, the email “was only an intermediate advisory step,” and “it was
still up to FRBKC to move forward with its plan to deny the request.” Id. (brackets and
internal quotation marks omitted).
We take further guidance from the application by the Supreme Court of the
second-factor test we applied in Custodia. In Bennett, ranchers and irrigation districts
challenged a Biological Opinion and an accompanying Incidental Take Statement (ITS)
issued by the Fish and Wildlife Service under the Endangered Species Act, 16 U.S.C.
§§ 1531–1544, determining that a longstanding irrigation project would likely jeopardize
two endangered species. See 520 U.S. at 158–59. The ITS required the Bureau of
Reclamation to initiate “‘reasonable and prudent alternatives,’” such as maintaining
minimum water levels in lakes and reservoirs affected by the irrigation project. Id. at 159.
Addressing the second part of its two-part test, the Court held that the biological opinion
and the ITS had “direct and appreciable legal consequences” because they “alter[ed] the
legal regime to which the [Bureau] [was] subject, authorizing it to take the endangered
species if (but only if) it complies with the prescribed conditions.” 520 U.S. at 178; see
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also 16 U.S.C. § 1532(19) (defining take as to “harass, harm, pursue, hunt, shoot, wound,
kill, trap, capture, or collect”).
In U.S. Army Corps of Engineers v. Hawkes, 578 U.S. 590, 593 (2016), the
plaintiff challenged an “‘approved jurisdictional determination’” (JD) by the Corps
that a parcel of property contained “waters of the United States.” The determination
expressed the agency’s “definitive view,” id., and was binding for five years on the
Corps and the Environmental Protection Agency, which enforce the Clean Water Act,
33 U.S.C. §§ 1251–1389. See id. at 595. A negative determination would “limit[]
potential liability a landowner faces for discharging pollutants without a permit,”
because it “create[s] a five-year safe harbor from [agency civil-enforcement
proceedings] for a property owner.” Id. at 598–99. On the other hand, a positive
determination would expose the landowner to such enforcement actions. Thus,
“[b]ecause legal consequences flow from approved JDs, they constitute final agency
action.” Id. at 599 (ellipsis and internal quotation marks omitted).
In Sackett v. EPA, 566 U.S. 120, 122 (2012), the plaintiffs challenged an EPA
compliance order declaring that their land was subject to the Clean Water Act and that
they had violated the Act, and directing them to restore their property immediately in
accordance with a work plan prepared by the agency. The compliance order had
several legal consequences. In addition to having to restore their property and “give
the EPA access to their property” and records, the plaintiffs were also exposed to
“double penalties” in future enforcement proceedings and would be limited in their
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ability to obtain certain permits. Id. at 126. Those consequences were sufficient to
satisfy the second part of the Bennett test. 4
And although it predates Bennett, the opinion in FTC v. Standard Oil Co. of
California, 449 U.S. 232 (1980), established that the burden of litigation is not the type
of burden that renders an agency action final. That opinion considered whether an
agency’s decision to initiate an administrative complaint constituted a final agency action.
See id. at 233. The Court acknowledged that it takes a “flexible view of finality” in the
APA context and recognized that “the issuance of the complaint is definitive on the
question whether the Commission avers reason to believe that the respondent to the
complaint is violating the Act.” Id. at 240–41. But it held that, “[s]erving only to initiate
the proceedings,” the complaint could not be considered a final agency action. Id. at 242.
The Court explained that the complaint had “no legal force or practical effect upon
[plaintiff’s] daily business other than the disruptions that accompany any major
4
The Supreme Court recently applied Bennett in a challenge to President Biden’s efforts to rescind and terminate President Trump’s Migrant Protection Protocols (MPPs). See Biden v. Texas, 597 U.S. 785 (2022). After a district court enjoined and vacated the Biden administration’s initial memorandum rescinding the MPPs, the administration issued a second memorandum in which it rescinded the first memorandum and offered a new justification for its decision to terminate the MPPs. See id. at 793–95, 808. The Supreme Court declared, without elaboration, that the second memorandum was a final agency action because it satisfied both prongs of Bennett—it “marked the consummation of the agency’s decisionmaking process and resulted in rights or obligations being determined.” Id. at 808 (brackets and internal quotation marks omitted). But see id. at 832–33, 833 n.7 (Alito, J., dissenting) (stating that the second memorandum could not be implemented until vacatur of the district-court injunction against implementation of the first memorandum and suggesting that the majority was taking an “expansive, formalist approach” to the second Bennett factor contrary to the Court’s longstanding “‘pragmatic’” approach to finality).
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litigation.” Id. at 243. And to the extent the complaint imposed upon plaintiff “the burden
of responding to the charges made against it,” id. at 242, that “expense and annoyance”
was “part of the social burden of living under government.” Id. at 244 (internal quotation
marks omitted). Such burdens are “different in kind and legal effect from the burdens
attending what heretofore has been considered to be final agency action.” Id. at 242.
Neither Bennett nor any other later Supreme Court opinion has suggested any
discomfort with Standard Oil, and lower courts continue to treat it as authoritative. See
Energy Transfer Partners, L.P. v. FERC, 567 F.3d 134, 140–41 (5th Cir. 2009) (applying
Standard Oil and holding that agency order alleging violations and initiating
administrative proceeding imposed a substantial burden, but one that was “different in
kind and legal effect” from what is needed to be considered a final agency action (internal
quotation marks omitted)); Am. Fed’n of Tchrs. v. Bessent, 152 F.4th 162, 174 (4th Cir.
2025) (citing Standard Oil for proposition that the initiation of enforcement proceedings
is the “type[] of agency action that traditionally fail[s]” the two-part Bennett test),
abrogated on other grounds by Am. Fed’n of State, Cnty. & Mun. Emps., AFL-CIO v. Soc.
Sec. Admin., 172 F.4th 361 (4th Cir. 2026) (en banc); Ukiah Valley Med. Ctr. v. FTC,
911 F.2d 261, 264 (9th Cir. 1990) (applying Standard Oil and holding that agency’s
decision to issue an administrative complaint was not final where it imposed only
litigation expenses and the mere possibility of financial loss).
B. Application to This Case
Scottsdale contends that filing the Alpine suit was final agency action. It
argues that “[t]he SEC’s assertion of jurisdiction and its interpretations of the BSA
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requirements have legal consequences for broker-dealers . . . who are subject to that
authority.” Aplt. Br. at 34–35. According to Scottsdale, the SEC, in filing its
complaint against Alpine, “effectively created its own new and harsher SAR
enforcement regime” under which it could “pursue its claims on a strict liability basis
and impose higher penalties” than those allowed under the BSA. Id. at 18. And, it
continues, through this enforcement regime the SEC created new “bright-line”
obligations, id. at 37, including an “objective obligation to file a SAR whenever
[a broker-dealer] is alerted to a red flag in a sizeable transaction of low-priced
securities.” Id. at 36. Because Scottsdale was left with “no choice” but to comply, id.
at 37, it “had to hire additional compliance personnel, implement changes to its BSA
program and significantly increase the number of SARs it filed and the time involved
to prepare SARs,” id. at 38.
But the only obligation or legal consequence of filing the Alpine suit was that
Alpine had the burden of defending itself, a burden that does not suffice to create
final agency action. See Standard Oil, 449 U.S. at 242–44. And Scottsdale did not
even have that burden because it was not named as a party in the action and had no
duty to respond to the complaint. Unlike the plaintiffs in Sackett, Alpine (much less
Scottsdale) was not ordered to immediately comply with anything. See Sackett,
566 U.S. at 126; see also S.F. Herring Ass’n v. Dep’t of the Interior, 946 F.3d 564, 580
(9th Cir. 2019) (orders being challenged required “immediate compliance” (internal
quotation marks omitted)). Scottsdale was not exposed to enhanced penalties as a
result of the filing of the complaint against Alpine. See Sackett, 566 U.S. at 126. In
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short, the complaint itself did not “alter the legal regime” to which the SEC,
Scottsdale, or any regulated party was bound, even if the ultimate judgment would
constitute law. Bennett, 520 U.S. at 178. It therefore cannot be a final agency action
under our approach set forth in Custodia.
Scottsdale suggests, however, that we take a pragmatic approach to Bennett and
consider the practical, day-to-day effects that the Alpine action has had on Scottsdale’s
business. Although this court has not adopted that approach, we do not reject it out of
hand.
To begin with, there is some support in Supreme Court opinions for a more
flexible approach that focuses on the practical consequences of an agency action rather
than parsing the nitty-gritty of legal rights and obligations. See William Funk, Final
Agency Action After Hawkes, 11 N.Y.U. J.L. & Liberty 285, 293 (2017) (stating that the
Supreme Court has left unanswered the question whether a final agency action must have
legal consequences or determine rights or obligations, or whether it is “sufficient that the
action have a direct and immediate impact on the person bringing the claim”). And some
sibling circuits have taken that approach in certain circumstances. The D.C. Circuit, for
example, has held that the second prong of Bennett was satisfied in a challenge to a
document that the EPA characterized as a nonbinding interpretive policy guidance, but
which in effect departed from the agency’s prior interpretation of the governing statute
and now told each State to “search for deficiencies in [the State’s] existing monitoring
regulations and replace them through terms and conditions of a permit.” Appalachian
Power Co. v. EPA, 208 F.3d 1015, 1023 (D.C. Cir. 2000); see id. at 1019–23. More
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recently, the Fifth Circuit held that the second prong of Bennett was satisfied in a
challenge brought by the State of Texas to a guidance issued by the Equal Employment
Opportunity Commission (EEOC) stating when employers may screen out candidates
with a criminal record. See Texas v. EEOC, 933 F.3d 433, 437–38 (5th Cir. 2019). The
guidance “ha[d] the effect of committing the agency itself to a view of the law that, in
turn, force[d] the plaintiff either to alter its conduct, or expose itself to potential liability.”
Id. at 446 (internal quotation marks omitted). It also “purport[ed] to bind EEOC staff”
when investigating certain Title VII disparate-impact claims. Id. at 445. And it
established two safe harbors by which employers could avoid Title VII liability. See id.
at 443–44. The court concluded that the guidance affected potential Title VII plaintiffs “in
a way that carrie[d] legal consequences and dictate[d] employers’ rights and obligations.”
Id. at 443.
But even if we fully endorsed the “pragmatic” approach employed in those cases,
there are two independently sufficient grounds for declining to treat the SEC complaint
against Alpine as a final agency action. First, the consequences of which Scottsdale
complains were not caused by the filing of the Alpine action. Scottsdale says that it was
the SEC’s positions in the Alpine action that “created onerous new regulatory costs,
burdens and uncertainty, particularly for broker-dealers (like [Scottsdale]) specializing in
the microcap/OTC markets, with respect to the SAR filing obligations under the BSA.”
Aplt. App., Vol. I at 142 (Brief in Opp’n to Mot. to Dismiss). In Scottsdale’s view, the
SEC, simply by asserting that it could enforce SAR requirements under Rule 17a-8, had
subjected securities broker-dealers to a secondary SAR enforcement regime that imposed
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“different standards” than did the Treasury “as to, inter alia, what constitutes a violation,
the applicable mens-rea, and the penalty amounts and other remedies for a violation.” Id.
at 143. As a result, Scottsdale had to “devote substantial time and resources to implement
changes to its BSA compliance program and SAR preparation to avoid regulatory inquiry
and enforcement action.” Id.
To say that these burdens arose from the filing of the Alpine complaint, however,
is to ignore history. The position of the SEC on these matters was unambiguous well
before the complaint was filed. In 2002 FinCEN extended the SAR requirements to
brokers and dealers, explicitly stating not only that that broker-dealers would be subject
to an objective standard for SAR compliance, but also that those requirements would be
enforced by the SEC under Rule 17a-8. See 67 Fed. Reg. at 44049, 44053. If Scottsdale
could somehow have thought this was an empty threat that the SEC would never seek to
carry out, it should have been disabused of that hope when the SEC publicly stated in
announcements of several settlements that it could enforce BSA regulations via Rule
17-a-8, see, e.g., Park Fin. Grp., Inc., Exchange Act Release No. 56902, 92 SEC
Docket 232, at *3–4 (Dec. 5, 2007) (imposing a cease-and-desist order and
sanctions), or when the SEC expressly incorporated the 2002 SAR requirements in its
2011 technical amendments, see Technical Amendments to Rule 17a-8: Financial
Recordkeeping of Currency and Foreign Transactions, 76 Fed. Reg. 11327, 11327–28
(Mar. 2, 2011).
And to the extent that Scottsdale says that the Alpine complaint broke new ground
by claiming violations based on “strict liability,” Aplt. Br. at 35, (rather than the
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negligence required under the BSA) and sought remedies not provided in the BSA, it is
ignoring that there was nothing new about such claims and remedies in SEC actions. Not
only had the SEC contended for decades that no scienter was required for sanctions to be
imposed for violations of record-keeping regulations under Section 17(a), but the SEC
had prevailed in court on that contention. See Stead v. SEC, 444 F.2d 713, 716–17
(10th Cir. 1971) (stating that defendant’s knowledge that the securities deposited were not
recorded was sufficient to establish recordkeeping violation under Section 17(a) of the
Exchange Act, without mention of a need to have knowledge of the recordkeeping
regulations); SEC v. Drexel Burnham Lambert, Inc., 837 F. Supp. 587, 610 (S.D.N.Y.
1993) (“Scienter need not be shown to prove a violation of section 17(a)(1) of the
Exchange Act and the rules thereunder”); cf. SEC v. McNulty, 137 F.3d 732, 740–41
(2d Cir. 1998) (deferring to SEC position that scienter is not a required element for civil
penalties for failure to comply with reporting requirements under Section 13(b) of the
Exchange Act because that section of the Act “contains no words indicating that Congress
intended to impose a scienter requirement” (internal quotation marks omitted)). Once it
was clear that the SEC intended to proceed under the Exchange Act for violations of the
BSA by broker-dealers, broker-dealers were on notice of the risk of liability under SEC
standards (with which they would have been quite familiar).
Hence, none of the consequences Scottsdale complains of actually “flow” from the
filing of the Alpine action. Bennett, 520 U.S. at 156. And it is the purported final agency
action being challenged that must “itself be the source of the parties’ obligations,
modifying the applicable legal landscape by interpreting the scope of their statutory rights
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or duties.” Custodia, 157 F.4th at 1249 (brackets and internal quotation marks omitted);
see Sinclair Wyo. Ref. Co. v. EPA, 72 F.4th 1137, 1144 (10th Cir. 2023) (agency action
was not final where it “tread no new ground, leaving the world just as it found it”
(brackets and internal quotation marks omitted)). That is true whether a court limits its
inquiry to purely legal obligations, see, e.g., Sackett, 566 U.S. at 126 (identifying legal
obligations imposed on plaintiffs “[b]y reason of” the action), or instead considers
practical, everyday effects, see, e.g., Appalachian Power, 208 F.3d at 1023 (taking a
pragmatic approach but nevertheless emphasizing that the agency “created” obligations
“[t]hrough the Guidance” (emphasis added)).
Second, as long as we are being pragmatic, treating a court-filed complaint as a
final agency action reviewable under the APA would be a nonstarter. To begin with, APA
review of final agency action is available only if “there is no other adequate remedy in a
court.” 5 U.S.C. § 704. The party being sued obviously has a remedy in a court—namely,
it can defend itself in the court in which the complaint was filed and seek appellate
review in that circuit. But it would be ironic if those who are not defendants could seek
APA review of the complaint in another court when the defendant cannot. And an APA
suit challenging the propriety of the agency’s filing the complaint while (or after) the
complaint itself is being litigated “cannot be permitted . . . without seriously undercutting
the orderly process of the law.” Celotex Corp. v. Edwards, 514 U.S. 300, 313 (1995)
(judgment creditors in bankruptcy proceeding cannot collaterally attack Florida
bankruptcy court injunction against executing a bond when they seek to execute on bond
in Texas federal court).
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We recognize that Scottsdale disagrees with the Second Circuit’s decision in
the Alpine action. As Scottsdale suggested to the Utah district court, it filed this
lawsuit in the hopes of creating a circuit split by having its issues reviewed by the
Tenth Circuit, which it views as “perhaps slightly more independent” than the Second
Circuit and as having “a pretty good track record in terms of looking at this kind of
issue.” Suppl. App. at 92–93 (Tr. of Hr’g on Mot. to Dismiss). Of course, there is
nothing inherently wrong with trying to create a circuit split. Just not by attacking the
proceedings in another circuit.
III. CONCLUSION
Because Scottsdale did not challenge a final agency action below, the district court
correctly dismissed its suit for lack of statutory standing under the APA. We AFFIRM.
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