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Another Scalia Vexes Regulators

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by Publius
Posted October 03, 2012, 10:29 AM

The Wall Street Journal reports:

When Eugene Scalia stands up in court Friday to argue against new rules for mutual funds that trade commodities, he will be looking to serve Wall Street with a fresh win against the government.

A former Labor Department lawyer and the son of Supreme Court Justice Antonin Scalia, Mr. Scalia has emerged as one of the industry's go-to guys for challenging financial regulations.

Just last week a federal court ruled in favor of Mr. Scalia's clients in a similar case, overturning limits on trading in commodity markets that Mr. Scalia had challenged on behalf of trade groups. Mr. Scalia is now 5-0 in recent cases challenging financial regulators.

Justice Scalia has said he limits his legal opinions to the original meaning of the words in the Constitution, while the younger Scalia says he is using the letter of federal statute to keep the government from interfering with his clients' business.

While Justice Scalia was largely on the losing side of arguments in the Supreme Court case challenging the Obama health-care law, his son has been slowly chipping away at another accomplishment touted by President Barack Obama's re-election campaign: the rules based on the 2010 Dodd-Frank law passed following the financial crisis.

"This is not a country where we look lightly at tens of millions of dollars in lost direct costs in restructuring entire industries, and say, well, that's not irreparable harm, it doesn't concern us," Mr. Scalia said at a hearing in February for the case on commodities-trading limits.

Eugene Scalia, who is 49 years old, doesn't argue before the Supreme Court or share in any revenue that his law firm earns as a result of Supreme Court cases, since having a financial stake in a case could lead his father to recuse himself. Justice Scalia declined to be interviewed for this article.

The latest rule the junior Scalia is fighting: a requirement for mutual funds trading in gold, oil or other commodities to register with the Commodities Futures Trading Commission. In his brief prepared for court on Friday, he argues that the regulator has "replicated some of the errors" of the Securities and Exchange Commission that "led the D.C. Circuit court to invalidate SEC rules in four recent cases," all argued by Mr. Scalia.

In this latest case, Mr. Scalia is arguing on behalf of the U.S. Chamber of Commerce, as well as the Investment Company Institute, a trade group

Mr. Scalia declined to answer questions about his father or the relationship between their two careers. Colleagues say his upbringing as the second of nine children in the Scalia household helped make him a good litigator. "He's grown up in the law, particularly this kind of law," says Ted Olson, a former solicitor general and fellow partner at Gibson Dunn & Crutcher LLP who has argued many cases at the Supreme Court.

In these recent cases, Mr. Scalia has focused on how regulators analyze the cost of new rules, building a legal strategy that echoes a political argument of Republican presidential candidate Mitt Romney—that added regulations are holding back the economy.

Mr. Scalia, who worked in Ronald Reagan's Education Department before going to University of Chicago Law School, says his legal positions don't involve politics. Regulators should be held to the requirement that they consider the economic impact of their rules, he says.

 

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