November 22, 2024
Conservative law’s new superstar has a familiar name: Scalia
 #NewsMarket

Conservative law’s new superstar has a familiar name: Scalia #NewsMarket

CashNews.co

Few people have done more to stymie US President Joe Biden’s bold attempts to rein in big business than Eugene Scalia.

In recent months, his legal arguments have thrown roadblocks in front of climate disclosure rules, regulations for private funds and the Federal Trade Commission’s ban on non-compete agreements that make it hard for workers to change jobs.

The second child of the late Supreme Court Justice Antonin Scalia, Scalia has taken up his father’s intellectual mantle as a critic of powerful government agencies and built a high-profile legal practice around it.

His enviable client roster at law firm Gibson Dunn & Crutcher has included Walmart, Boeing, MetLife and a host of powerful Wall Street and business groups including the US Chamber of Commerce, the Managed Funds Association and the Business Roundtable.

“I love the principles and ideas that [this] country was founded on, and those include a government that is respectful of liberty,” Scalia told the Financial Times in an interview. “When government intrudes on rights, treats people unfairly and claims power the people never gave it, I find it rewarding to call that out.

“Challenging that sort of government behaviour is a way of furthering American values.”

Eugene Scalia embraces his wife, Patricia, during a Senate hearing on his nomination to serve as labour secretary
Scalia embraces his wife, Patricia, during a Senate hearing on his nomination to serve as labour secretary © Cliff Owen/AP

Long respected as a talented litigator, Scalia, now aged 61, drew attention early for defending big employers against worker protection rules and fighting off a 2014 attempt by the Obama administration to regulate insurer MetLife more tightly as a “systemically important financial institution”.

But Scalia’s litigating prowess has never found more fertile ground than today. The Biden administration has been on a vigorous — critics say unprecedented — rulemaking blitz, as Democratic appointees at the FTC, Securities and Exchange Commission and other agencies seek to redress what they see as decades of under-regulation.

At the same time, the conservative majority on the Supreme Court has been gradually curbing the power of federal agencies, known collectively as the administrative state. Earlier this year, a series of rulings made it harder for regulators to introduce new rules, limited their use of in-house courts for enforcement and opened the door to companies that want to challenge existing ones.

“The Supreme Court has shown an interest in identifying cases of regulatory over-reach, and the Biden administration has responded by saying, ‘hey, here are a few for you to take a look at’,” Scalia said. “They’ve been pitching the Supreme Court softballs.”

The high court’s anti-regulatory tack has in turn emboldened conservative judges in the lower courts, many of them appointed by Donald Trump, to look more favourably at a wide range of industry lawsuits. Scalia and his clients have taken full advantage of sympathetic judges in Texas and the Fifth Circuit Court of Appeals, where they filed challenges to the private funds rule and the non-compete ban.

Critics say Scalia is simply riding a political wave. “He latched on to the judiciary at a time when the Republican blockades in the Senate and then the Trump presidency were turning it into a right-wing redoubt and when Wall Street lobbies were opening their wallets to stop good policy aimed at helping investors and consumers,” said Carter Dougherty of Americans for Financial Reform.

Even those who disagree with Scalia acknowledge that he has been very successful at persuading judges from across the political spectrum to rule for his clients.

He is “in the top handful of people influencing the development of the administrative state with a conservative judiciary”, said Joshua Macey, associate professor at Yale Law School.

“As a legal craftsman, he’s really, really talented,” Macey said. “He seems to understand . . . what will speak to different courts, taking advantage of jurisdictions that will be favourable to his client, and knowing how to write briefs and give oral argument that will be highly effective.”

One of nine children, “Gene” Scalia attended the University of Virginia and briefly considered getting a PhD in medieval literature. He worked for outspoken conservative William Bennett at the Department of Education before attending law school at the University of Chicago.

Donald Trump and Eugene Scalia
Donald Trump and Scalia. Scalia served as secretary of labour in the Trump administration © Andrew Harnik/AP

After a stint at the justice department, he moved to Gibson Dunn. There, Scalia helped Walmart win a ruling that struck down a Maryland law aiming to force large companies to contribute more to workers’ healthcare and defended amusement park owner SeaWorld from a government lawsuit after an orca killed an employee. Scalia, a married father of seven, also helped build legal precedents that require regulators to provide a cost-benefit analysis when imposing new rules.

“He is a very intense lawyer” and “very savvy about how to position a case to win”, said Helgi Walker, who co-chairs Gibson Dunn’s administrative law practice with Scalia. “Some people may be intimidated by Gene because he is so impressive . . .[but he] is so much fun to be around . . . [He has] a razor sharp and somewhat dry sense of humour”.

He did two stints at the labour department, most recently serving as secretary during the Trump administration. Union groups hated his tenure atop the department because they saw him as more interested in easing strictures on employers than protecting workers. “The fox wasn’t just guarding the henhouse — he sat inside it, feasting on all the worker protections he was charged with enforcing,” said Jody Calemine, AFL-CIO’s director of advocacy.

His experience inside the regulatory state is valued by his current clients. When the Managed Funds Association was considering its first-ever lawsuit against the SEC, it consulted Scalia not only about the case’s chance of success but also about the likely impact on its relationship with the watchdog. “He has been sued as a regulator and he was able to provide that perspective,” said Jennifer Han, general counsel of the MFA. “He had clients who then sued him at the Department of Labor and he wasn’t offended.”

Since returning to private practice in 2021, Scalia has become the go-to lawyer for financial services firms and business groups looking to fight back against actions taken not just by the Biden administration but also Democratic state and local governments.

“It’s disturbing if regulators are issuing orders that infringe rights and impose costs, knowing that ultimately their action probably won’t be legally acceptable,” Scalia said.

When big banks began to mobilise against new capital rules, known as the Basel endgame, they hired Scalia. The American Farm Bureau turned to him to lead their challenge to California’s new climate disclosure rules. He is also leading a so-far unsuccessful effort to prevent New York City pension funds from divesting from fossil fuel.

“Gene’s litigation experience and administrative law expertise are a powerful combination when it comes to challenging government over-reach,” said Daryl Joseffer, chief counsel at the US Chamber of Commerce, which has turned to Scalia for multiple lawsuits, including last week’s victory against the FTC’s non-compete ban.

The FTC is “seriously considering an appeal” against the ruling in the Texas non-compete case, in part because a Pennsylvania judge upheld the ban in a separate case not brought by Scalia. “The FTC’s authority stands on clear statute, firm precedent and decades of congressional debate that support our ability to issue rules,” a spokesperson said.

Scalia has clashed particularly frequently with the SEC, where chair Gary Gensler has promulgated 41 new rules aimed at increasing transparency and protecting investors. Scalia and his clients contend the agency has repeatedly overstepped its legal authority on issues ranging from private fund disclosure to the rules for hedge funds and traders operating in the US Treasury market.

The SEC said: “We act within the law and how courts interpret the law.”

In court and in written briefs, Scalia is a master of making scathing legal arguments. In person, he is far gentler and unassuming, clients and colleagues said. “He’s a really nice guy . . . very courteous and gentlemanly,” said Mark Chenoweth, president of the New Civil Liberties Alliance, which specialises in suing agencies for government over-reach.

Clients praise his willingness to listen and help them think through issues. “Gene is a phenomenal counsellor — he’s strategic and he’s also very responsive,” said Rebekah Goshorn Jurata, general counsel of the American Investment Council, who worked with Scalia on the private funds rule case. “He’s very calm, cool and collected.”

Scalia’s detractors see him as an enabler of corporations looking to short-change workers, investors and the public. “Every hard-won pro-worker regulation, designed to give working families a fair shake or keep a worker alive, has been like a legal game to him, to be deconstructed and destroyed,” said the AFL-CIO’s Calemine.

Legal analysts and rival lawyers predict that Scalia’s influence will grow as industries look to take advantage of the Supreme Court cases that came down earlier this year.

“Scalia is going to make $1bn from representing industries,” said a Washington lawyer at a rival white-shoe law firm. “It’s oil and gas, tobacco, it’s alcohol, firearms, everyone is going go to him . . . Everyone is looking for a lawyer to fight against the government.”

Additional reporting by Joshua Franklin in New York