LDN - Business

As private lawyer, Trump high court pick was friend to business

[February 02, 2017] By Lawrence Hurley

WASHINGTON (Reuters) - As a lawyer in private practice for a decade, President Donald Trump's U.S. Supreme Court nominee Neil Gorsuch often fought on behalf of business interests, including efforts to curb securities class action lawsuits, experience that could mould his thinking if he is confirmed as a justice.

Gorsuch, a conservative federal appeals court judge from Colorado nominated by wealthy businessman Trump on Tuesday, could turn out to be a friend to business, having represented the U.S. Chamber of Commerce in fending off securities class actions, one of the most hotly contested areas of corporate law.

The chamber is the largest U.S. business lobbying group.

If confirmed, Gorsuch would be one of the only current justices with extensive experience on business issues in private practice.

Securities class action lawsuits are filed by investors who allege misconduct by a company whose stock price has tanked, hurting investors' portfolios. These once-common lawsuits now face higher hurdles and are filed less often.

Congress passed laws in 1995 and 1998 making it harder to bring securities class actions. Later court rulings, including one in which Gorsuch was involved, clarified the requirements under the laws.

From 1995 to 2005, Gorsuch worked at boutique law firm Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington, becoming a partner in 1998. He had a wide range of clients, including individuals and nonprofits, as well as various business interests. While there, he filed two briefs on behalf of the Chamber of Commerce seeking limits to securities class actions.

One of Gorsuch's briefs came in a securities fraud case called Dura Pharmaceuticals v. Broudo. The Supreme Court in 2005 ruled unanimously for the company, but did not issue the kind of broad ruling Gorsuch had sought, said Patrick Coughlin, the lawyer who argued the case on behalf of the investors who sued.

Of Gorsuch's role, Coughlin said representing the Chamber of Commerce is the epitome of corporate defense work for a lawyer.

"The chamber had always been against us," Coughlin said, referring to class action lawyers. "He'd always been on the other side of what we were doing, so it was not surprising he was selected by Trump."

Prior to the ruling, Gorsuch co-wrote an article in the Legal Times trade publication for lawyers in which he described some securities class actions as a "free ride to fast riches" for plaintiffs' lawyers.

He said the Dura case was a chance for the court to "curb frivolous fraud claims" in which plaintiffs cannot prove a stock price drop was caused by misrepresentations by a company.

Gorsuch's background promises to be valuable on the Supreme Court, which hears a significant number of business disputes among the roughly 70 cases considered each annual term.

Businesses have been trying with mixed success to get the Supreme Court to put new curbs on class action litigation beyond the securities context. Class actions can lead to huge jury awards against companies and is harder to defend against than lawsuits brought by individuals.

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U.S. President Donald Trump and Neil Gorsuch (L) smile as Trump nominated Gorsuch to be an associate justice of the U.S. Supreme Court at the White House in Washington, D.C., U.S., January 31, 2017. REUTERS/Kevin Lamarque

If confirmed by the U.S. Senate in time, Gorsuch could play an immediate role in a major case on whether companies can head off costly class action lawsuits by forcing employees to give up their right to pursue work-related legal claims in court as a group.

MERITLESS CASES

Paul Bland, executive director of consumer advocacy group Public Justice, said he hoped Gorsuch, if confirmed, would see that "most of what he saw as meritless cases in 2005 have been weeded out, and that the vast majority of the cases that remain raise substantial issues that protect investors."

Chamber of Commerce official Tom Collamore joined Trump at the White House on Wednesday for a meeting with advocacy groups touting Gorsuch's pick, calling it "a fantastic nomination."

The chamber declined comment on Gorsuch's work for the group. In a statement issued after the nomination was announced, chamber President Tom Donohue congratulated Trump on the selection.

When Democratic President Barack Obama last March nominated appeals court judge Merrick Garland to fill the same vacant seat on the court, there was no press release from the chamber. Senate Republicans refused to act on Garland's nomination, a move that paved the way for Trump to nominate Gorsuch to replace fellow conservative Antonin Scalia, who died in February 2016.

Describing his career in private practice, Gorsuch said in his Senate questionnaire prior to his appointment by Republican President George W. Bush to the Denver-based 10th U.S. Circuit Court of Appeals in 2006 that he was "involved in matters large and small for clients ranging from individuals to nonprofits to corporations," on such issues as racketeering, securities fraud and antitrust.

His former Washington law firm stressed in a statement that Gorsuch had a "wide variety" of clients and cited a case in which he represented people who had been targeted over payday loans. David Frederick, a lawyer at the firm, called Gorsuch "a dogged, very determined lawyer."

"He's the kind of lawyer you would want to have representing you," Frederick said.

After leaving the firm, but before becoming a judge, he spent just over a year in Bush's Justice Department. One of his roles was overseeing antitrust litigation involving the government.

(Reporting by Lawrence Hurley; Editing by Kevin Drawbaugh and Will Dunham)

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