US law firms smell opportunity as Supreme Court guts agency powers
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[July 03, 2024] By
Mike Scarcella
(Reuters) - Law firms are capitalizing on client uncertainty sparked by
a flurry of new U.S. Supreme Court rulings that favored opponents of
federal agency powers, even as lawyers themselves differ on the
decisions' immediate and long-term effects.
Within hours of the decisions, major U.S. law firms began sending out
client-focused emails and webinar invitations to discuss the cases and
showcase their expertise, a marketing strategy that often follows major
legal developments.
Law firms known for challenging federal regulations stand to be
particularly busy, but lawyers said it will take time for the new
landscape to take shape.
In the space of three days, the high court clamped down on agencies' use
of their own internal judges, overturned the 1984 precedent known as
"Chevron deference" that required judges to defer to agency
interpretations of laws deemed ambiguous, and revived a regulatory
challenge over statute of limitations that could open a window to more
lawsuits over old regulations.
Helgi Walker, who co-leads the administrative and regulatory law
practice at Gibson, Dunn & Crutcher, predicted the rulings would be "a
shot in the arm to administrative law challenges."
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Her firm has led a number of industry challenges to rules by the
Securities and Exchange Commission and other agencies.
"We no longer have to go into court with an anvil tied to our ankles,"
said Walker. "That's what it feels like when you are pushing against
Chevron."
Alston & Bird’s Daniel Jarcho, who also handles litigation involving
federal regulators, said he received a “flood of inquiries” from current
and potential clients looking to understand the rulings.
He said the deference that U.S. judges accorded to agencies under the
Chevron standard had chilled litigation by businesses of all sizes. Now
companies will be inclined to sue because the likelihood of success is
greater, he said.
The statute of limitations decision could also lead to more litigation.
The Biden administration warned before Friday's decision that widening
the window to sue would expand the class of potential challengers and
keep the court busier.
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A view of the U.S. Supreme Court, following the ruling on former
U.S. President and Republican presidential candidate Donald Trump's
bid for immunity from federal prosecution for 2020 election
subversion in Washington, U.S., July 1, 2024. REUTERS/Kevin Mohatt/File
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The rulings will play out in cases brought by individuals, companies
and industry groups opposing regulations, or defending themselves
from agency lawsuits.
Not everyone expects a sudden crush of new case filings, however.
Some attorneys said clients were asking how the Supreme Court’s
orders applied to cases already in the courts, and not whether to
bring new ones.
Litigator Danielle Desaulniers Stempel of Hogan Lovells called the
demise of Chevron deference a reckoning that was years in the
making.
“I don't know how many companies have been holding off on filing
lawsuits” and would suddenly sue now, she said.
Bryan Killian of Morgan, Lewis & Bockius called the post-Chevron
world a dynamic situation that was sparking questions from clients
in all kinds of industries.
Some tax clients had imminent filings due and wanted to know how
they could preserve challenges to IRS regulations, he said.
Lynn Calkins of Holland & Knight said she expected the Supreme
Court's rulings would embolden some companies to take a more
aggressive litigation tack, but not across the board. Some may turn
to lobbying instead to challenge regulations, she said.
Most corporate clients "don’t relish litigation," Calkins said.
“They're not chomping at the bit to increase legal spend.”
(Reporting by Mike Scarcella; Editing by David Bario and Stephen
Coates)
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