* Chamber, API say SEC failed to weigh costs/benefits
* SEC rule was required by Dodd-Frank law
* Rule requires companies to disclose payments to govts
* Attorney Scalia to argue the case for the industry
* SEC says its economic analysis is sound
By Sarah N. Lynch
WASHINGTON, Oct 10 (Reuters) - Four business groups on Wednesday filed a lawsuit against the Securities and Exchange Commission’s new rule requiring oil, mining and gas companies to disclose payments they make to foreign governments.
In the latest legal challenge to a rule required by the 2010 Dodd-Frank Wall Street reform law, the groups including the Chamber of Commerce and the American Petroleum Institute allege that the SEC failed to properly weigh the rule’s costs and benefits.
The suit also claims that the SEC “grossly misinterpreted its statutory mandate” in how it crafted the rule, and in doing so created a regulation that violates companies’ First Amendment rights.
SEC spokesman John Nester said the agency is still reviewing the lawsuit, but the agency believes it is on solid legal footing.
“We believe our legal interpretation and economic analysis are sound and we look forward to defending the rule that Congress directed us to write,” Nester said.
The challenge to the SEC’s rule is being headed up by Gibson Dunn attorney Eugene Scalia, the son of Supreme Court Justice Antonin Scalia who has a winning-streak in knocking down other SEC regulations such as the proxy access rule last year.
Late last month, Scalia helped other trade groups win a court battle against the Commodity Futures Trading Commission over another Dodd-Frank rule that would have imposed trading curbs on speculators.
The SEC’s resource extraction rule has been among some of the most controversial Dodd-Frank requirements.
Championed by humanitarian organizations, the rule aims to combat bribery abroad by U.S. energy companies.
But industry groups have argued the rule is far too costly and would give rivals sensitive business information.
The SEC adopted the rule in August.
The other two groups to challenge the rule on Wednesday were the Independent Petroleum Association of America and the National Foreign Trade Council.