New episode of our video podcast, Speaking of Litigation: When businesses face regulatory uncertainty, how can they effectively adapt, respond, and, if necessary, challenge government action?
In this episode, Epstein Becker Green attorneys Mike Brodlieb, Jim Flynn, Jimmy Oh, and Jack Wenik navigate the complexities of regulatory action and inaction. The conversation dives into the changing administrative landscape and covers how businesses can strategize to challenge regulations, the pros and cons of litigation, and the critical importance of aligning legal goals with practical business objectives.
The panelists also explore how agencies’ evolving processes create both challenges and opportunities, including how internal agency relationships and unexpected legal arguments can shape outcomes. From assembling the right legal team to balancing risk and reward in high-stakes scenarios, they discuss real-world tactics for crafting solutions that address uncertainty while keeping business interests front and center.
Gain insight into how legal professionals are managing the intricate interplay between government regulation, litigation strategies, and client priorities in today’s dynamic environment.
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Transcript
[00:00:00] Mike Brodlieb: Today on Speaking of Litigation, we're discussing regulatory action and inaction. We'll be covering three topics: the pros, cons, and alternatives to challenging regulations, arguments that are gaining traction, and considerations in the face of governmental inaction or uncertainty. Hello everyone. I'm your host today, Mike Brodlieb.
[00:00:19] Mike Brodlieb: I'm an attorney in Epstein Becker Green's litigation practice, and I'm based out of our New York offices. With the end of the Biden administration and the start of the Trump administration, we've seen a flurry of executive actions and dramatic changes to the administrative state. Today we're talking about the legal implications of those regulatory changes and how businesses and stakeholders can adapt effective strategies in the face of this changing landscape and uncertainty.
[00:00:44] Mike Brodlieb: Joining our discussion today is Jim Flynn. Jim is the managing director, and a member of the firm in our Newark and New York offices. Jim handles many types of litigation as well as engaging in processes designed to achieve client objectives without litigation, and his work includes addressing state and federal regulatory issues.
[00:01:02] Mike Brodlieb: So Jim, welcome.
[00:01:03] Jim Flynn: Michael, thanks for inviting me. Glad to be part of the discussion.
[00:01:07] Mike Brodlieb: Also with us is Jack Wenik. Jack is a member of the firm also in our Newark office. Jack is a former federal prosecutor who has been with EBG for more than a decade. His practice frequently interfaces with the DOJ, the FTC, the FDA and other federal agencies in negotiations and litigation on behalf of dietary supplement and health care companies.
[00:01:28] Mike Brodlieb: Jack, welcome.
[00:01:29] Jack Wenik: Thanks for having me, Mike.
[00:01:30] Mike Brodlieb: Also with us is Jimmy Oh. Jimmy is a member of the firm in our Chicago office. Jimmy's practice at EBG traverses all three of the firm's core practices. Employment, labor and workforce management, health care and life sciences, and litigation and business disputes.
[00:01:46] Mike Brodlieb: Pertinent to the discussion today, Jimmy has been lead counsel on lawsuits that have challenged both federal and state government regulatory action. Jimmy, welcome.
[00:01:54] Jimmy Oh: Thanks. Looking forward to the discussion.
[00:01:57] Mike Brodlieb: Thank you all for being here. Jim Flynn, I'd like to address the first question to you. So given the rapidly changing regulatory landscape, is there a common question that clients are coming to you with?
[00:02:09] Jim Flynn: So it's really one of three, right? Clients come to us in this regulatory setting usually to either say, can we stop what the government's doing, question one, or question two, can we get the government to do something that we want them to do?
[00:02:29] Jim Flynn: And increasingly now, with the change in administration, the third question is, we're not sure what the government is going to do or is not going to do. Can you help us figure it out? What should we be seeing down the road? All three of those questions are common and always have been, but particularly in the present administration that last question's getting a lot of play.
[00:02:51] Mike Brodlieb: And Jimmy Oh, are you seeing that as well?
[00:02:53] Jimmy Oh: Just today it was announced that HHS is going to be reducing force by 10,000 or so employees in addition to the people who have already left. And so the questions that I know are going to come in are, how is this going to affect my application for approval of a drug or a medical device with the FDA?
[00:03:23] Jimmy Oh: Is this going to affect, eventually, the rate of reimbursement on Medicaid and Medicare. How are my claims going to be handled timely? So those are all questions that, because of the disruption going on in the federal government now, yes, people have questions. We don't necessarily have answers just yet.
[00:03:50] Mike Brodlieb: Thanks. And Jack, in your practice areas, are you seeing the same?
[00:03:54] Jack Wenik: I'm seeing, as Jim's laid out, all three. You know, what is going to happen going forward. I have clients, particularly in the dietary supplement space, asking for action by the government in particular from guidance on what regulatory issues there are with certain ingredients and what advertising claims they can make.
[00:04:19] Jack Wenik: And certainly in my criminal practice, there's a lot of angst as to what we could do to negotiate resolutions of investigations and that sort of thing. And as Jim pointed out there's just a lot of uncertainty out there, with a new sheriff in town, for lack of a better word.
[00:04:42] Mike Brodlieb: And when a client calls you with an issue or a problem, what are the first questions you would ask?
[00:04:47] Jack Wenik: We all have our own reactions to what's going on and reading the newspapers, and I always try to focus clients to put their emotions aside, put their ideologies aside, and what is the practical objective that they have?
[00:05:03] Jack Wenik: What is it that they want to achieve? And regardless of what administration is in power, to me as lawyers in private practice, that should always be our focus. Because once you know what the practical objective of the client is, then you can mold the approach around that.
[00:05:26] Jack Wenik: As lawyers, you know, to corporate America if you will, we're not, our goal isn’t to establish policy. Our goal isn’t to establish arguments. Our goal is to achieve a goal for the client, to implement whatever that goal is, and that, I think, sometimes lawyers lose sight of. The client typically has a specific, practical thing they want to achieve, and that's the first and foremost question I think one needs to focus on.
[00:05:55] Mike Brodlieb: And Jimmy Oh, what questions in your practice area do you tend to ask clients when they call you with an issue?
[00:06:03] Jimmy Oh: An example of something that's happening right now is that the NIH has canceled, terminated, a number of grants to a number of different organizations. And so as Jack was saying, practically speaking, what are you trying to accomplish?
[00:06:26] Jimmy Oh: What do you think we can accomplish together? And in a situation where your grant has been canceled, it is fairly black and white as to what the options are. However, there are just things playing out in different agencies right now where I do think that over the course of the year, a record will be built as to whether or not your client, or my client, will be harmed during the course of the year by either government action or inaction.
[00:07:03] Jimmy Oh: It might not necessarily be regulatory. It's really the staffing cuts, I think, at this point that have the potential for creating situations where there's potential non-compliance with statutory requirements that affect our clients, or non-compliance with regulatory requirements that affect our clients.
[00:07:27] Jimmy Oh: But it remains to be seen. So part of the counsel that I'm giving now is, let's wait and see. And be patient about it, but also get ready and be prepared if we have to take action.
[00:07:41] Mike Brodlieb: So the theme that I'm hearing is that it's about the client's goals and objectives and really zeroing in on that.
[00:07:48] Mike Brodlieb: Jim Flynn, once you know what the client wants and you get a sense of their objectives, how do you assemble a team to address the goals?
[00:07:58] Jim Flynn: So, look, a lot of it is going to be based on what that goal is and what the status of the situation is. Take, for example, someone who has a problem with a particular regulation.
[00:08:12] Jim Flynn: What you want to do is lay out for the client the options. You can go very aggressively and try to invalidate the regulation by, you know, bringing a court action or something like that. But on the other hand, maybe the regulation itself is a little ambiguous, and you might get this client's goal fulfilled simply by getting some guidance, formal or informal, from the regulators.
[00:08:43] Jim Flynn: So when you're talking about putting together your team, what you want to do is have a team that gives the clients the options. So you may have people like, you know, Jimmy and Jack and me, who may be directing things and setting up a record that will be helpful in litigation if we get there. But you're going to want regulatory experts and subject matter experts on the underlying substance to be part of the communications with the client so that we have other alternatives, like seeking informal guidance or like looking at technological alternatives that may get the client’s goal of avoiding the imposition of that regulation on them because there are other alternatives available. So when we put together a team, we're not only looking across Epstein Becker Green for the right attorneys with the right experience.
[00:09:43] Jim Flynn: And we have people who used to work for CMS and used to work for, you know, NIH and things like that. But we may also be looking to add to the team people who aren't attorneys, but who bring some technological proficiency or some experience with the regulators that we can fold in. So whether it's somebody through Epstein Becker and Green Advisors who may be, you know, a physician or a former chief medical officer or somebody on the, you know, the billing and pricing side.
[00:10:11] Jim Flynn: So that we can inform our arguments and give our clients sort of total subject matter solutions, not just, you know, individual legal bullets to fire, but a real sense of how we're going to go after this. That's what I look at when I'm trying to put together the team.
[00:10:27] Jimmy Oh: To your point, Jim, about assembling a team, I think that it's important to consider at least, when you are, well before anytime you might even be filing a lawsuit. Nonetheless, to have a litigator involved from inception of an issue that's potentially one of an existential nature to a business line or business, so that the litigators can help the regulatory people, the subject matter experts.
[00:11:05] Jimmy Oh: Those who have the lines of communications with the regulatory agencies who know the regulations inside and out, who know the statutes inside and out, know the processes inside and out within the FDA or NIH, such that they can communicate and try to get something resolved short of litigation.
[00:11:32] Jimmy Oh: That would ultimately, I would think, almost always be the goal, but then nonetheless, have the litigator look at, let's say, submissions, a letter to a regulator, for A, making sure that you're not making some admissions you don't want to see come back to haunt you in court or in a filing. And then B, potentially plant some seeds, perhaps some might call them time bombs, that if in litigation you get into litigation, you have that record established through the eyes of a litigator.
[00:12:17] Jim Flynn: Hey, look, I agree with you, Jim. I said at the beginning of my answer, me, you or Jack was going to be in charge of that team,
[laughter]
[00:12:20] Jim Flynn: So I was not looking to downplay all the litigators at all.
[00:12:27] Jimmy Oh: Jim, we’re going to be co-heads with our partners, our subject matter experts, as a team.
[00:12:34] Jimmy Oh: But yes, ultimately, in litigation, there has to be one person in charge of the trial team. I agree with that.
[00:12:41] Jack Wenik: Let me weigh in on this for a minute because I'm just giving you some stream of consciousness here. You know, one thing that I think, it’s a real strength of our firm, and why I enjoy being here, is there's a wide range of viewpoints, wide range of politics.
[00:12:57] Jack Wenik: We've got Democrats, we've got Republicans, we've got conservatives, we've got liberals, and so much, at least in my practice, is about relationships. And I think particularly with this new administration, on one level maybe even more important than the merits of whatever arguments we're advancing on behalf of our clients, is who has that personal relationship at whatever agency we are dealing with.
[00:13:22] Jack Wenik: Which has always been important, for sure, but I think even now, more so. Because let's face it, a lot of the appointees of the president, you know, are of a similar personality.
[00:13:57] Jack Wenik: And it's those personal relationships that, for better or for worse, are even more important in the current environment, that they'll take your phone call and have the meeting with you. It's always been important, but I think more so in this environment, and I think one of our firm's strengths is that we're not known as a firm that's, you know, beholden to one particular party or ideology or whatever.
[00:14:20] Jack Wenik: We always can find folks that are going to have that connection with the regulators, both at the state and federal level. That's been a real strength I think of EB G for the 10 years I've been here.
[00:14:32] Jimmy Oh: I think to amplify that thought, Jack, just from a point of litigation strategy and optics going into court, if you can demonstrate to a judge that pre-suit you attempted to work things out directly with decision makers within an agency, with people who have the authority to make a decision. Those discussions were amicable. Well, we just couldn't reach a resolution and we had to file this lawsuit. Then, you know, I think you can position the beginning of that lawsuit and hopefully the conduct of the lawsuit throughout in such a way that it isn't total knives out.
[00:15:19] Jimmy Oh: It isn't totally contentious because at some point, even after you filed a lawsuit, you may end up back in negotiations with these folks with whom you talked before the lawsuit got filed, and therefore you want to be able to sit down with them at any point of the way and have a good civil discussion.
[00:15:42] Jimmy Oh: And you may end up having those conversations with your opposing counsel and the decision makers in the midst of a trial. Right? But you still want to come across as, we're playing as well as we can in the sandbox with everyone.
[00:15:58] Mike Brodlieb: So what I'm hearing from everyone is that there are very good options in terms of avoiding litigation by using EBG's relationships and so forth.
[00:16:07] Mike Brodlieb: What happens if litigation can't be avoided? What does the process of challenging the regulatory action or the regulation look like?
[00:16:15] Jim Flynn: There are a couple things that you want to consider right off the bat. One is forum and location. Where are you going to bring this action? That's often going to be dictated by what agency you're dealing with.
[00:16:30] Jim Flynn: Obviously if it's a state agency you're gonna be somewhere within that state. But if you're talking about the options you have at the federal level, you may be filing things in Washington because that's where the agency is. But you also have the option frequently of, you know, considerations of whether you file in your client's home district.
[00:16:50] Jim Flynn: So you're going to want to try to figure out if there's a place where you think you have a better shot. You know, obviously in Washington there's a lot of experience at the federal district court level in dealing with these issues. There may be less of that experience in your home district or your client's home district.
[00:17:09] Jim Flynn: That may be an advantage or a disadvantage to you. You gotta look at the particulars of that situation. But the primary thing I'm looking at is, you know, where am I gonna bring this? Because once I know where I'm gonna bring it, and I may do some research, is the law more favorable in the Second Circuit versus the Seventh Circuit?
[00:17:27] Jim Flynn: So, you know, it makes sense for me to file it in New York or for Jimmy to file it in Chicago. You know, things like that, we'll be looking at very strongly with the client and trying to inform them of, you know, what makes sense. Is the institution that we're representing very important to a particular community, right?
[00:17:49] Jim Flynn: If there's something that's gonna affect the licensure of a hospital or the ability of a large health care provider to get, you know, reimbursement from CMS, you might want to do that in the home district because the judge will feel the impact of what could happen to the community if this, you know, institution needs to shut down.
[00:18:13] Jim Flynn: And you know, I see Jimmy nodding because I know Jimmy's faced exactly that choice and exactly how, you know, to do these things. But that's a primary consideration for me.
[00:18:22] Jimmy Oh: One point I want to amplify that you just made, Jim, was looking at circuit case law. Because in a suit against the government, if the government loses, which you know, that would be the outcome we'd be looking for on behalf of our clients.
[00:18:43] Jimmy Oh: They're more than likely to appeal. And so you need, when you file, I do think you really have to know whether or not the circuit court of appeals case law is favorable or unfavorable for you, and that can really be determinative of where you file. So there are circuit splits on many different issues, and so depending on how that circuit decides an issue, that's going to be a big factor in where you file.
[00:19:16] Jack Wenik: What I would add to the mix here, so anytime you file any sort of complaint under the Administrative Procedure Act challenging something the government's doing, inevitably there's going to be some motion to dismiss from the government. For sure. And what I've done, at least in the context of the dietary supplement industry, is if I can, I try to see if I can line up, even before I filed my complaint, if I'm going to have any amicus aids, if you will.
[00:19:46] Jack Wenik: So I'll look to see if there are any trade associations in the dietary supplement industry that's going to be willing to back the position that my client takes. And I think it's important to look into that sort of thing, even before you file your litigation, because if you know what you have in your back pocket, that your client's gonna be able to rely on some sort of amicus brief from other players in the industry or a trade association, what have you, I find that's enormously helpful.
[00:20:17] Jim Flynn: Yeah, Jack, I mean that's a great point, and in fact I'd take it a step further and probably should have said this earlier on. You wanna have that discussion with your client, not only about recruiting potential allies as amicus, but really, hey, is there a way to get the trade association to take this on as the plaintiff?
[00:20:43] Jim Flynn: Because, you know, and maybe even particularly in this day and age, you know, to be the one out there fighting the government, you may not want to do it on your own. And whether you can get it done in the name of a trade association, you know, even though your client may provide some funding through dues or otherwise to promote that, or to get multiple members of the trade association to participate, even if not under the umbrella of the trade association, just because of relationships.
[00:21:07] Jim Flynn: Because you want to understand, is the regulatory issue that you're battling and your client's battling, is it something that will affect everybody in the industry? Such that you'll have some natural allies? Or is there something about this regulation that helps part of the industry and hurts part of the industry, in which case you may get people in, in different contexts who are your competitors, who, you know, they coat their particular medical device with one substance that's different than what you code yours with. And that creates a reimbursement distinction or the like, you know, those situations are ones where understanding who's gonna be on your side and who's not is, is really important.
[00:21:59] Jim Flynn: And I think it plays into everything we've talked about before. So I agree a hundred percent. Looking at what the industry and the trade associations could do is an important, important factor.
[00:22:10] Jimmy Oh: A lot of this discussion has been on some legal, both tactics and strategy. But in terms of when you're teeing up a lawsuit, I think in terms of the practical considerations that clients need to understand, if they haven't been through a lawsuit where you are taking on a federal or state government, is that everyone needs to understand that this is an all hands on deck situation. It's a big deal. You need to make sure your PR and communications department are ready to answer the question that comes from those reporters who are checking the dockets every day as to lawsuits that get filed, to have a comment or not with regard to the lawsuit.
[00:23:01] Jimmy Oh: If you have a governmental affairs person while the lawsuit is ongoing, you can still have your governmental affairs people maybe working the phones, working back channels, side channels, as they normally would do, which might help bring about a resolution of the actual lawsuit that got filed.
[00:23:27] Jimmy Oh: And so when the trial team is communicating with the legal department as to, here's the plan, we are going to need help internally to get what we need to put on the case. That message needs to come from on high down to whatever level of the organization, that this is all hands on deck. The trial team needs this.
[00:23:55] Jimmy Oh: So when they ask for it, you need to get it for them yesterday. I know it sounds a little bit on the demanding, perhaps presumptuous side, but when there's that much at stake and it's at so high profile and the reputation of the organization is on the line, the trial team, when they ask for something, it's because they really think they need it to move the case forward in a successful way.
[00:24:24] Mike Brodlieb: So when you've started the litigation, are you still continuing to pursue alternative ways of resolving the action with the government? And if so, what does that look like?
[00:24:33] Jim Flynn: So, yeah, certainly. Right? You certainly are, and courts are going to push you toward that anyway. You know, when Jimmy talks about the all hands on deck thing.
[00:24:44] Jim Flynn: I think implicit in that is he's imagining the scenario where, you know, you're not only challenging a regulation, but you are seeking some interim or preliminary relief. And so those tend to go quickly. You know, federal district court judges are hesitant. The standards are high for granting preliminary relief in any case.
[00:25:11] Jim Flynn: You know, there are separation of powers and other issues that come up that make judges even more hesitant potentially to enjoin an executive branch agency. And so they're constantly saying, hey, is there a way we can avoid this? You know, I don't have to rule on this right now, or can you guys talk or the like? And so, you know, when we talk about those kinds of, you know, all hands on deck cases, we're making a couple of assumptions.
[00:25:43] Jim Flynn: What's important to do with the client is not only to find out what they want to happen or what they don't want happening. Right? Because that's going to frame the type of either affirmative or negative relief you're asking for, but you also gotta find out from them how important this is. Like, hey, is this regulatory conduct or is this regulation something that goes to the heart of your business and there's really no number or monetary amount or anything else that's going to save it?
[00:26:15] Jim Flynn: You need this invalidated? Or is it, you know, I don't like, I don't love this regulation, or I don't love this interpretation of a regulation because it's going to wind up costing me, you know, an extra hundred thousand dollars a year. That's going to be a very different case and a very different approach then, you know, hey, if this regulation stays in place, I basically go out of business. So it's not only what do you want, but it's how important is it? Because that's then gonna trigger and inform the notion of getting the endorsement from the C-suite for, you know, what's important. If this is, you know, an X thousand, and I mean single X thousand type of issue, C-suites are not gonna tell everybody to jump through hoops for the legal team, even if it's a really interesting, arcane legal issue.
[00:26:59] Jim Flynn: On the other hand, if it basically puts you out of business or puts you at a serious disadvantage in the marketplace, then hopefully the client's interests in getting this addressed fully and speedily is aligned with their litigation strategy.
[00:27:25] Jim Flynn: So it's important to consider, you know, all those things, but really understand, hey, what relief am I seeking? And ultimately it's, am I getting my client the solution? Sometimes that means getting a court decree. Sometimes that just means trying to get a court decree, but ultimately using that as leverage to get to a regulatory result that you and the government can live with.
[00:27:51] Jack Wenik: One other thing I'd like to point out here, and Michael, you asked about, you know, if you're still negotiating, is that there is a lot of uncertainty because the processes that this administration is putting in place are so novel. One thought that occurred to me is if you read through the thicket of some of President Trump's orders, he talks about we need to eliminate 10 regulations for every one we implement and stuff like this.
[00:28:18] Jack Wenik: But one thing that's really interesting is he's having the Office of Management and Budget approve and review all regulations, even those from independent agencies, and whereas in the past, my understanding was that sort of thing was more of like a technical type review, making sure the language, you know, does what government bureaucracy should do.
[00:28:44] Jack Wenik: I think now it’s more substantive. So, you know, we may have to think out of the box and not only, or maybe perhaps in addition to, or in lieu of dealing with the regulatory agency at issue, we may want to be reaching out to the OMB. He's also said in his orders that he wants the attorney general to weigh in on whether all regulations are appropriate or not.
[00:29:08] Jack Wenik: So you, there may be different avenues of attack, for lack of a better word, in this administration that you wouldn't see in past administrations because it's just a different way of looking at things and thinking of things. So I think as lawyers, we need to think outside the box and maybe go on pathways that we're not used to going down given some of these executive orders and the processes they've set up.
[00:29:36] Jim Flynn: Yeah. And Jack, I think that that really highlights what Jimmy said earlier about the litigation perspective and what you plant in your communications. Because even if we don't presently reach out to OMB or to the Justice Department ...
[00:29:57] Jim Flynn: we probably want to include in our submissions about the particular agency or to the particular agency, arguments that normally would go to those other channels, so that when the attorney general looks at our issue from the side, we've already anticipated the kind of arguments that she might be or her delegates may be interested in.
[00:30:25] Jim Flynn: And similarly, we may make a budgetary argument, even just in passing, that we wouldn't normally make to, or about, a particular office or agency that, you know, wasn't a budgetary one within, for example, FDA or NIH or what have you. So I think it really brings home in a very specific, and I think, you know, appropriate way, an example of what Jimmy was alluding to earlier,
[00:30:54] Jimmy Oh: To Jack's point about thinking outside the box, there's a new agency, or is it an agency, called DOGE that we've been hearing a heck of a lot about since even before January 20th.
[00:31:12] Jimmy Oh: Since then, DOGE has been a force. It's definitely been a force. But how do you as a company that's being regulated by the federal government, how do you characterize DOGE in a pleading right now? How do you characterize an action that an agency takes that really may have been ordered by DOGE, and so it's the agency that's really just following the orders of DOGE.
[00:31:53] Jimmy Oh: So really, who made the decision that's affecting you? Is it DOGE or is it the agency? So these are really kind of fascinating questions that are outside the normal box of what we have dealt with under prior administrations. And so yeah, we're gonna all have to be creative and brainstorm and fit these facts now into the law as it exists, or that we make.
[00:32:22] Mike Brodlieb: This is a great segue to our next discussion topic, which is what arguments are gaining traction in the wake of all the changes we've seen?
[00:32:30] Jim Flynn: I think there are a couple and just to pick it up where where Jimmy just took us, you know, we're seeing courts pick up on this DOGE issue and saying if you're gonna exercise this kind of influence then we're going to say that your documents are open to FOIA requests or, you know, things of that nature.
[00:32:55] Jim Flynn: And so we definitely see people finding out more about what DOGE is doing, as an example, than we might otherwise have seen. There certainly have been a number of, you know, due process arguments and related arguments that have, you know, gotten some traction in the case in DC in front of Judge Howell regarding the executive order directed at another law firm. And so we see those arguments. Certainly due process arguments have been part of some of the immigration cases and the efforts to deport immigrants under the 1798 statute that all of a sudden has gotten a lot of play.
[00:33:51] Jim Flynn: So we're seeing some arguments, at least at the trial court level, that are gaining some traction. But one of the things that's clear is that it does matter what circuit you're in because certain circuits have affirmed the trial courts in, you know, what they've said about removal of non-citizens, as an example.
[00:34:15] Jim Flynn: But others have taken a different view in terms of the enforceability what the administration's trying to do in the diversity, equity, and inclusion space. And so it matters, you know, where you filed because the Fourth Circuit acts differently than the, you know, than the federal circuit or what have you, from different circuits.
[00:34:40] Jim Flynn: So it becomes important, but those are arguments that I've seen at least gaining some traction.
[00:34:47] Jack Wenik: So if I could follow up. I thought, Jim, that your due process point was interesting because I think we can apply that outside, you know, the immigration type area where you're talking about individuals.
[00:35:00] Jack Wenik: Cause I recall some years back, I think the case was called FCC v. Fox Television. Fox had allowed an obscenity during an award show and the FCC tried to find them for an indecency, all the way to the Supreme Court. And it was, I think, a unanimous decision. And basically there was a due process argument saying, well, you can't fire somebody for doing something if the regulation is so vague that no one really understands how they're supposed to conform their conduct.
[00:35:31] Jack Wenik: And it seemed to me that that sort of thinking, to be applied for sure in so many contexts we're in under now where things are novel, we don't know what's happening. And so many of these executive orders are so poorly drafted, so vague, and get really no mention whatsoever as to how to conform one's conduct.
[00:35:55] Jack Wenik: And to me it's the same sort of thing that Fox Television fought about, about a decade ago, that you can't fine us for allowing a fleeting expletive on an FCC regulation where no one understands what it means and how to conform one's conduct. And I think that, in any circuit, it's gonna be a powerful argument to make.
[00:36:16] Jim Flynn: Yeah, I mean, look, the other arguments that we've seen come out of some of the cases directed at lawyers and law firms suggest to me that they'll be subject to challenge as ex post facto laws because, you know, this is conduct that was engaged in under a totally different interpretation of the law and with no one thinking that there was anything inappropriate about what went on.
[00:36:40] Jim Flynn: And so you have that question, and whether that's just part of a due process argument or something separate, I think, is there. There's also a notion potentially of, and I've seen reference to it, that things speak to, you know, being bills of attainder, because it's directed at, you know, not lawyer X, but every lawyer at law firm Y because of an association with somebody else.
[00:37:08] Jim Flynn: And that's a classic, you know, bill of attainder. And so there are a lot of arguments that are, you know, sending us all back to con law textbooks and stuff that we don't usually think about in, you know, in other times. But in this time, as Jack said, because people are taking, in the administration, taking a very different approach. It's opening up or reopening a whole bunch of arguments, you know, looking at things beyond traditional due process, beyond traditional equal protection, to really some other potential arguments.
[00:37:52] Jimmy Oh: One further point I'd make along these lines is that the administration now has gone back to the 1798 Alien Enemies Act.
[00:38:03] Jimmy Oh: And use that statute as justification for deporting some people who they basically are claiming are enemy combatants of the United States. The administration, and there are lawyers within the administration supporting the administration who are scouring the statute books for statutes that will help justify the policies that they're trying to follow.
[00:38:32] Jimmy Oh: Well, the flip side of that is that the actions that are being taken that some might say don't seem to be too well thought out, that they are painting with too broad of a brush. They've got too big of a saw, like a chainsaw perhaps, that is cutting off limbs, and without prior thought in doing so inevitably is going to, I think in many circumstances, violate a law that's on the books or be contrary to settled case law.
[00:39:02] Jimmy Oh: And so actually I think one of the arguments, and one of the legal strategies that people or companies who want to challenge a regulation can be is, well go back to the statute that's been in place since 1992 and has been reauthorized every five years on a bipartisan basis, that requires certain levels of staffing, let's say at the FDA. And then all the cuts at HHS and FDA potentially could be violating the statute, the plain simple language of the text of the statute.
[00:39:57] Jimmy Oh: As Elena Kagan said, we're all textualists now, right? Go back and read these statutes and these texts and I think we will be able to come up with some good legal theories.
[00:40:07] Jack Wenik: Well, the other thing I would mention is, getting back to negotiating and using our relationships with the regulators.
[00:40:16] Jack Wenik: If whatever your client's goal is, if we can mold that and pitch it to whatever regulator we're dealing with, that this actually is furthering some underlying policy goal of this administration. I think that goes a long way. Because with all the craziness that's going on, you know, though, the president wants more manufacturing done here and wants more sourcing in the US.
[00:40:44] Jack Wenik: So for example, if you could convince a regulator that this regulation that you're implementing is going to raise their costs, and going to make it not feasible for us to produce goods here and we're gonna lose American jobs. That may go a long way, you know, because again, you're trying to pitch these things that, you know, we want to further some of these policy goals.
[00:41:08] Jack Wenik: And that's, I think, what Jim has emphasized as well, is sometimes, you know, we need to put ideology and emotion aside and cast things as best we can to achieve whatever that practical result is for the client. I know in the dietary supplement space, for example, my clients are going nuts over these Chinese tariffs, because for dietary supplements, many of these ingredients that they use are available only from Chinese sources.
[00:41:39] Jack Wenik: And you know, the pitch I am reading about, that people are making in the industry is, this is going to jeopardize US jobs and US production. Because if we can't get the raw materials, then we can't manufacture these products here. So again, this whole point that Jimmy Oh said, thinking outside the box and how can we frame things to advance that client's ultimate goal?
[00:42:06] Mike Brodlieb: What do you say to a client who's faced with that situation? A regulatory action that is clearly contrary to what's been on the books. What are the problems they face and how do you help them cope with that issue?
[00:42:21] Jim Flynn: As Jack said earlier, we try to take some of the emotion out of it.
[00:42:26] Jim Flynn: If they feel they're being unfairly targeted or victimized or being the subject of an unreasonable interpretation or application of law, you still gotta find out, okay, but what does it mean? Like, again, are you just offended? Do you just feel that this is unfair? Or does it have a real business and economic impact?
[00:42:49] Jim Flynn: Because if there are alternatives that are less expensive and less risky than challenging it and can get you doing your business uninterrupted through some modification, then that may be the right counsel. It doesn't make the activity of the government any more legal or any less unreasonable, but it's about how you're going to react to it.
[00:43:14] Jim Flynn: So you gotta go back to the questions Jack talked about, the ones that I mentioned. You know, what does it all mean? But you gotta get your clients' head in the right head space of, “let's stay practical.” Let's move this forward. Look, once we pull the trigger, we're gonna fight with everything we have.
[00:43:36] Jim Flynn: But, you know, is pulling the trigger the best thing for you here? And always be ready to, you know, find the path of least resistance to the goal that you have.
[00:43:49] Jimmy Oh: I think ultimately one of the first questions that you have to ask if a client comes to you is, do you want to be a named plaintiff in a lawsuit against the federal government?
[00:44:02] Jimmy Oh: Do you want to stick your neck above the foxhole on this one? Because it's a different world right now, since January 20th of this year.
[00:44:16] Mike Brodlieb: So a few final questions. Jim Flynn, what are the biggest pros and cons to challenging regulations?
[00:44:23] Jim Flynn: Look, the biggest pro is your client sees you in action and sees you helping them towards, you know, towards their goal. That's a conditional pro because you better win.
[00:44:37] Jim Flynn: Or you better at least get a reasonable settlement and resolution. You know, the con of challenging governmental action is inevitably and frequently the same agency that you just challenged will regulate you thereafter. And so clients often feel as if, even though they think they can win, they don't want to do that because they feel the natural human tendency is to you know, for the regulators to say, okay, you beat me on that one, but now I'm going to, you know, make you cross every t, dot every I, and really be very aggressive in my other enforcement activity..
[00:45:18] Jim Flynn: And so there's a fear level, I think, with clients, and it just has to be part of the initial and ongoing analysis. How important is this? How much is this worth? And, you know, what risks are you willing to bear? So it's definitely on the scale and part of what we have to talk to clients about and they have to make determinations about.
[00:45:47] Mike Brodlieb: Thanks. And Jimmy Oh, in your practice, what are the biggest pros and cons when it comes to challenging regulations?
[00:45:53] Jimmy Oh: I endorse entirely what Jim just said, and I augment it by saying that when you're taking on a certain agency that you know is going to be regulating you again, that's why your approach during the case, during the litigation, during the trial, is one where no personal attacks on anybody at the agency, no questioning the integrity. It's all about what's right and what's wrong under the law, respecting what the agency does. But we think that in this one instance, unfortunately, you've got it wrong. Everything else you do, we support you.
[00:46:40] Jimmy Oh: We think the programs that you run benefit the country, but in this particular issue, it's an issue that's hurting our client and it's not justified under the case law and the regulations and in the statute. So you try, I think, you thread that needle and then you can therefore potentially mitigate any future risk that the agency doesn't look kindly upon you for having sued them.
[00:47:09] Mike Brodlieb: Thanks. And Jack, in your practice areas, what are the pros and cons?
[00:47:13] Jack Wenik: What I would mention as part of this discussion is the costs, that litigating against the government is enormously expensive. When I've done this for the dietary supplement industry, not only is it the cost of us the lawyers, but you need to get scientific experts frequently to challenge the agency's inaction or lack of action or the effect of regulation.
[00:47:33] Jack Wenik: And it's a diversion of resources at the client to deal with the litigation. So when I'm talking about pros and cons I'm always trying to get my clients to manage their expectations. This is what this is going to cost you both in internal and external resources, and are you willing to do that, and is that going to be acceptable to you? So that to me has to be the number one factor in the pros and cons. Can the client bear these costs? And is the result at the end of all this something that's going to justify all those costs?
[00:48:20] Jimmy Oh: Is the juice worth the squeeze, right Jack?
[00:48:22] Jack Wenik: Exactly, exactly right. [laughter]
[00:48:25] Mike Brodlieb: Is the juice worth the squeeze? Well, that's a great place to end. Thank you Jack, Jimmy Oh, Jim Flynn for speaking with us. Thank you to everyone who's watching and listening. You can subscribe to Speaking of Litigation on YouTube or wherever you get your podcasts. Thank you.
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