WASHINGTON (Legal Newsline) - A prominent business defense attorney foresees an unprecedented role for trial lawyers in the regulatory aspirations of federal agencies invigorated under a Joe Biden presidency.
“The trial lawyers haven’t been this close to any other president in history,” Victor Schwartz, co-chair of Shook, Hardy & Bacon’s Public Policy Practice Group, told Legal Newline. “They’ve supported him over the 47 years he’s been in elected office, and were big contributors during his presidential campaign.”
The regulation/litigation interplay under the Biden Administration, Schwartz says, will shift to “regulation as a springboard to litigation” from “regulation through litigation” during the Trump years.
“An activist judge during Trump years believing that more regulations are needed would broaden tort law to open the door for more litigation,” Schwartz explained.
As example, Schwartz said a judge could broaden the law of nuisance, “a malleable tort,” historically used against offending actions like polluting waterways, to target a product, like guns.
Under Biden, newly adopted regulations themselves -- in some cases adding a private right of action -- will result in more litigation.
He cited a change in tax law to allow for the write-off of expert witnesses as soon as the expense is incurred. Currently the trial lawyers must wait until the end of a trial to submit the deduction, and only if they lost the trial.
“Immediately deducting an expense that can run into hundreds of thousands of dollars will allow them to take on more cases,” Schwartz.
Another sought-after change by the trial bar is the banning of pre-dispute arbitration agreements, which inhibit class action lawsuits in consumer and employment contracts.
Regulatory activism might be unnecessary if the two Democratic Senate candidates in Georgia win their runoff elections on Jan. 5, giving the Democrats effective control of the Senate. The Republican Senate has stymied past efforts by the House to expand avenues for litigation. In September 2019, for instance, the House approved the Force Arbitration Injustice Repeal (FAIR) Act, banning pre-dispute agreements. The Senate never took up the bill.
But if the Republicans keep Senate control, then federal agencies can push the changes through. The Department of Treasury has the authority to allow immediate tax write-offs for expert witnesses. The Consumer Financial Protection Bureau (CFPB) could ban pre-dispute agreements.
In July 2017, in fact, CFPB adopted a rule prohibiting the use of the agreements in contracts for consumer financial products and services. The Republican-controlled Senate quickly blocked it.
Another desired change in tort law, which Schwartz says would be “huge” for the trial bar, would be to establish a private right of action for the misuse of personal data. That change could as well be accomplished through regulation, if legislation, which has been introduced in the House, fails to make it to the new president.