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Kavanaugh had vote on overturning ‘Merrill Lynch rule’

Supreme Court nominee Brett Kavanaugh

Brett Kavanaugh, who was nominated to the Supreme Court late Monday, during his 12-year tenure on the U.S. Court of Appeals for the District of Columbia Circuit has challenged the Supreme Court precedent that courts should defer to regulators' interpretation of law when there is ambiguity, and questioned the power of federal agencies.

In a 2017 dissent, Mr. Kavanaugh said while the so-called Chevron deference applies to federal agencies when issuing ordinary rules, another doctrine prevents them from relying on that deference when issuing major rules.

In other writings, Mr. Kavanaugh questioned the Chevron deference — based on a 1984 decision in Chevron vs. Natural Resources Defense Council, stating: "In many ways, Chevron is nothing more than a judicially orchestrated shift of power from Congress to the executive branch," and that encourages the executive branch "to be extremely aggressive in seeking to squeeze its policy goals into ill-fitting statutory authorizations and restraints."

And in 2007, he voted to overturn the Securities and Exchange Commission's 2005 "Merrill Lynch rule" that exempted brokerage firms charging asset-based fees from investment advisory regulations under certain conditions. The ruling, written by Judge Judith Rogers, said the SEC exceeded its authority by issuing the exemption.

In a White House ceremony announcing the nomination, President Donald Trump praised Mr. Kavanaugh for his "impeccable credentials, unsurpassed qualifications and a proven commitment to equal justice under the law."

If confirmed by the Senate, Mr. Kavanaugh, a staunch conservative, would fill the vacancy left by retiring Justice Anthony Kennedy, who often served as the swing vote, and give court conservatives a 5 to 4 majority.

At the White House announcement, Mr. Kavanaugh pledged that if he is confirmed by the Senate, "I will keep an open mind in every case."

Asked to comment on Mr. Kavanaugh's appointment, David Tittsworth, a lawyer with Ropes & Gray and former president and CEO of the Investment Adviser Association in Washington, said, "It's impossible to extrapolate how Judge Kavanaugh would view the SEC's pending best interest rule proposal – or any other SEC rule that might be challenged and make its way to the Supreme Court.

"Having said that, it's pretty clear that he is not a big fan of giving agencies like the SEC a lot of leeway in interpreting statutes."