Perhaps the "end-of-the-day" dry martini is one of a handful of things still held sacred on Wall Street.  But it's likely that no person and no institution is untouchable and that everyone and everything is vulnerable. On Friday, this concept was demonstrated when the Commodity Futures Trading Commission was sued by two financial trade groups - SIFMA and ISDA.  The Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association filed the lawsuit to challenge the CFTC's so-called position limits rule. Lawsuit Widely Expected. Admittedly, such a suit had been widely-expected given the years of fierce debate over this provision, which industry groups say is procedurally flawed and "lacked a reasoned basis."  Over the last year, several financial trade groups have issued thinly veiled threats of legal action.  In March, the Futures Industry Association urged the commission to scrap its position limits plan, saying it “may be legally infirm.” Facts and Circumstances. The CFTC adopted the rule in October - a measure designed to prevent excessive speculation on commodities traders.  The rule calls for limits on traders accumulating position in 28 commodities, including energy products and metals like oil and gold.  Previously, the limits covered only 9  agricultural commodities, including corn and wheat. The vote marked a crucial step in the Obama administration’s effort to enforce the Dodd-Frank regulatory overhaul, in response to the financial crisis.  As adopted, the new rules crack down on commodity speculation - a significant thrust of the Dodd-Frank Reform Act, which was enacted to prevent a recurrence of the great financial crisis that brought markets on Wall Street and around the world to their knees. The lawsuit itself was a first - the first ever filed against a CFTC rule.  SIFMA and IDSA filed the complaint in federal court in the District of Columbia, charging the Commission with failing to evaluate the rule’s economic impact on Wall Street.  Here are some of the groups' most pointed statements:

• “The evidence is overwhelming that position limits are, at best, unnecessary and may, at worst, negatively impact commodity markets and users.” -- ISDA CEO Conrad Voldstad.

• "It has the potential to harm markets at a time when they can least afford it." -- Voldstad and SIFMA President & CEO Timothy Ryan, Jr.

• The rule was “poorly crafted” and based on “an incorrect reading of the law.

The Battlefront Shifts from the Backroom to the Courts. The lawsuit is the latest indication that Wall Street is shifting fronts in the battle over Dodd-Frank - moving from backroom lobbying to the courtroom.  A federal appeals court in July struck down the SEC's so-called proxy access rule, another Dodd-Frank policy that would have made it easier for shareholders to nominate company directors.  That was was rejected because the SEC’s cost-benefit analysis was inadequate. Following that decision, regulators became fearful that rules mandated by Dodd-Frank were vulnerable to legal challenges, which led several federal agencies to reexamine their Dodd-Frank rules.  The CFTC, in fact, delayed several times its vote on the position limits rule, the rule it finally adopted provided for delays in enforcing many new position limits for at least a year. A Deeply Divided Commission. When the CFTC voted on the rule in October, its Commissioners were fiercely divided.  The 3 Democratic commissioners - including Chairman Gary Gensler - voted for the crackdown,  and the 2 Republican Commissioners voting against it. CFTC Commissioner Bart Chilton, a Democrat who's been a chief advocate of position limits, tried earlier this year to rebut the detractors.  In a September speech before a U.N. panel, argued that Wall Street was “trying to dance on the head of a legal pin.” Scott O’Malia, a Republican CFTC Commissioner, made a prophetic statement at the October hearing, saying the cost-benefit section left the rule “vulnerable to legal challenge.” And ISDA and SIFMA even took the unusual step of using a statement by Democratic CFTC Commissioner Michael Dunn - who voting for the rule - in which he said in October that he feared position limits “are a cure for a disease that does not exist or at worst, a placebo for one that does.” Pros and Cons of the New Rule. Wall Street lobbyists say the rule didn't improve with time.  ISDA and SIFMA say that Dodd-Frank leaves it up to regulators to enforce position limits only “as appropriate,” and contend that the regulators should have taken the position that no limits were appropriate. In Friday's lawsuit, the pair accused the CFTC of writing a woefully inadequate cost-benefit analysis - one that did not allow the industry to adequately comment on the rule proposal.  Some 15,000 comment letters were submitted to the Commission. On the flip side, supporters of the rule view it as the nation’s best hope for protecting consumers from speculative commodities trading.  Over the last few years, the financial industry has increased its speculation in the futures market.  At the same time, the prices of the underlying commodities have fluctuated wildly, driving up prices at the gas pump and the grocery store. It is unclear what the next step in the legal battle will be, and a CFTC spokesperson declined to comment. For further details, go to:   [DealBook, 12/2/11]  and/or  [Reuters, 12/2/11]