Lawyers are watching policy changes and new initiatives that might affect their practices as the Trump administration’s direction takes early shape, and many say they already see areas likely to create new work.
The Business Journal’s Deirdre Newman asked several OC attorneys what they believe will be some of the most impactful issues emanating from the White House. Here are edited excerpts of their responses.
Wylie Aitken
Founding Partner
Aitken Aitken Cohn
Santa Ana
The hot legal issues will be almost impossible to predict and will change as the tweets fly in and ‘the well-oiled machine’ continues.
Since Trump has openly suggested that federal judges, most of whom were appointed by Republicans, lack the depth of ‘dumb high school students,’ one wonders how his positions will be received and to what extent Congress will follow his lead.
The hot-button issues will probably be the attempt to erode pro-choice and civil rights; Wall Street over consumer rights; obvious further limitation on immigration measures and diversity; and most importantly whether Ivanka Trump has a constitutional right to feature her line of clothes at Nordstrom.
Richard Bridgford
Founding Partner
Bridgford, Gleason & Artinian LLP
Newport Beach
I believe access to the courts will be a hot issue under the Trump administration. This is particularly true should the Senate confirm President Trump’s recent Supreme Court nominee. In that event, I fear aggrieved parties will be faced with fewer remedies and less access to the courts. Already, the courts have upheld especially onerous waivers of citizens’ rights to jury trials and, within the context of arbitration, those citizens’ rights to assert small claims through the class-action mechanism. The predictable result is less corporate accountability as recourse to any true redress is denied.
As Justice Breyer noted in the seminal case of AT&T v. Concepcion, which upheld class-action waivers in civil arbitration agreements, ‘What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?’
Unfortunately, one unsung side effect is that diminished corporate accountability for bad corporate actors penalizes good corporate actors. If bad actors are allowed to profit by cheating because true access to the courts and thus accountability is barred, it effectively increases the costs of doing business to their competitors who play by the rules. This distorts competition. As such, diminished access to the courts for real grievances is bad economics.
Moreover, anyone who has actually litigated a class action or obtained a verdict for punitive damages knows that steep procedural safeguards against frivolous claims and a high bar are already in place. Therefore, as a trial attorney I intend to work hard to reverse this trend toward eliminating access to the courts and redress for real grievances. In that regard, it is my hope that the UCI Law Civil Justice Institute will prove a pivotal player in Orange County and the nation under the leadership of UCI Law Dean Erwin Chemerinsky.
Mitchell Wexler
Managing Partner
Fragomen, Del Rey, Bernsen & Loewy LLP
Irvine
Aside from the presently playing out travel ban on citizens of certain designated countries, there are a few other hot business immigration law issues, considering the Trump administration.
U.S. Immigration and Customs Enforcement audits of businesses’ I-9 forms is expected to increase. The forms are used by employers to verify an employee’s identity and to establish workers are eligible to accept employment in the United States.
The EB-5 immigrant investor program is under the microscope, and we fully expect significant changes to that program in terms of investment amounts and rigor around regional center administration.
There has also been mention of tinkering with other work visa categories, such as the H-1B visa, in terms of prevailing wage calculations and the annual selection process as an alternative to the current lottery. The Deferred Action on Childhood Arrivals program will be reviewed, as well.
William Marticorena
Partner
Rutan & Tucker LLP
Costa Mesa
Under President Trump, we expect innovative project delivery for infrastructure to be a hot legal topic. According to the president’s election victory speech, within his first 100 days in office, he originally hoped to work with Congress to generate $1 trillion in private investment to ‘rebuild our highways, bridges, tunnels, airports, schools, [and] hospitals.’ Trump’s 100-Day Plan initially anticipated achieving increased infrastructure investment through an American Energy and Infrastructure Act that would ‘leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years.’ While it now appears that Congress will not pass any major infrastructure bill in the first 100 days—as always, the devil is in the details—nonetheless, we still expect major national infrastructure legislation, likely including at least some funding, in the near future.
We believe that forthcoming national infrastructure legislation will embrace innovative project delivery, including public-private partnerships. Not only did the president’s proposal expressly say so, but also there is bipartisan momentum for movement in this direction, as reflected by the Feb. 7 reintroduction of the Public Buildings Renewal Act, based on increasing recognition that public-private partnerships can prove a strong tool for effective delivery of infrastructure projects.
In 2016, California successfully used a public-private partnership delivery method for two large-scale social infrastructure projects, the Long Beach Civic Center Project and the UC Merced 2020 Campus Expansion Project. Other major public-private partnership projects in California’s pipeline include the Los Angeles Convention Center, the Los Angeles World Airports rental car facility and people mover, and Napa’s downtown renovation project.
Sage Knauft
Partner
Walsworth
Orange
With stories of Russian hacks and interference with the U.S. election process continuing to dominate the news cycle, cybersecurity has become a major topic of interest in this age of increased threats caused by the theft and dissemination of private digital information. In apparent recognition of the importance of increasing the nation’s cyber defenses, the Trump administration has issued a draft executive order that will set up a series of review panels designed to identify the most critical U.S. cyber vulnerabilities and threats that may be looking to exploit them. Once these are identified, the panels will reportedly focus on developing needed improvements to adequately protect U.S. critical infrastructure and, finally, to incentivize private-sector adoption of effective cybersecurity measures. At this point, it is unclear if the administration will issue new regulations to protect against cyberattacks at the federal government level. It also remains to be seen whether any new privacy regulations will be imposed on businesses, retailers and online providers who collect and maintain private digital information of their employees, customers and consumers.
Jeffrey Golden
Co-Founding Partner
Lobel Weiland Golden Friedman LLP
Costa Mesa
We believe one of the hot legal issues under the Trump administration will be in the bankruptcy/insolvency arena. With the limited focus on bankruptcy reform laws and what the current administration describes as a more business-friendly economic environment, we expect to see an increase in commercial bankruptcies in Orange County and nationwide.
We are also confident inflation and interest rates will rise and a number of companies will find themselves with limited access to capital and facing tremendous financial challenges. Many commercial loans are coming due, and borrowers will soon have to face limited options.
In Orange County, we understand that our local economy is tied to the real estate market. With the probable rise in interest rates, we can expect a dip in real estate and local businesses looking for ways to financially restructure, either through insolvency, selling of assets or other alternative avenues. On the other hand, opportunistic companies in a healthy financial situation will likely find ways to acquire assets and grow. In this case, the bankruptcy process will be used more to acquire assets and businesses.
Greg Michelson
Administrative Partner
Haynes and Boone LLP
Costa Mesa
President Trump has proposed a number of possibly far-reaching changes to the regulatory environment, including revising immigration policy, reducing income taxes and corporate taxes, cutting regulations of corporate America by ‘75% or more,’ renegotiating trade agreements, and curtailing various Obama-era energy and environmental policies.
We are closely monitoring the new administration’s policies and preparing for rule-making that could affect a broad swath of our client base, including businesses across Orange County. For example, in anticipation that the administration may seek to amend the North American Free Trade Agreement, we have formed a NAFTA Task Force group involving many of our 70 international practice lawyers, who have been helping clients prepare for the impact of potential changes and any new opportunities that may arise.
For our technology clients, major issues include possible changes to current International Trade Commission guidelines that would enable U.S.-based companies to more easily prevent foreign companies from selling patent-infringing products in the U.S., as well as new guidance on how companies can maintain or supplement expertise provided by non-U.S. workers.
Mark Spring
Partner
Carothers DiSante & Freudenberger LLP
Irvine
The top labor and employment issues to watch under President Trump’s administration include the U.S. Department of Labor’s minimum salary requirements for overtime compensation; changes to immigration; and more rigorous state and local laws.
Last year, the Department of Labor raised the federal salary requirements for exempt employees to $47,476 annually. This regulation is currently stayed, based on injunctions issued in several pending court cases. It is unclear what the Trump administration will do with it. It is possible that President Trump and his nominee for Labor Secretary, Alexander Acosta, may completely repeal this regulation, or they may push Congress for a statute providing for a lower salary threshold, thereby decreasing the burden on employers for meeting the salary basis test for overtime exemption purposes. This area is likely to get more attention if Acosta is confirmed, which I suspect will happen.
We are already seeing significant movement in the area of immigration. One question that remains to be answered is what will President Trump do with e-Verify, which is an optional electronic method of verifying employment status. Many experts believe that employers may soon be required to use the federal e-Verify system before hiring employees. This change, if implemented, would curb any hiring of undocumented workers, as employers would be required to electronically verify the authenticity of identification documents prior to hiring.
And employers operating in typically regarded employee-friendly states, such as Massachusetts and California, should expect these states to play an activist role on behalf of employees and enact a variety of additional legal protections to curb President Trump’s efforts at rolling back many of the Obama executive orders and other initiatives. Expect liberal municipalities like San Francisco and Santa Monica to continue to enact employment regulation to provide protections for workers in those cities.
Michael Flynn
Co-Partner in Charge
Gibson, Dunn & Crutcher LLP
Irvine
In early February, President Trump made two executive actions relating to U.S. financial markets and institutions. Together, these actions indicate that the new administration is prepared to undertake a vigorous reappraisal of a number of the restrictions imposed on financial institutions during the Obama administration. This is likely another early signal of the Trump administration’s intent to reduce the regulatory burdens on American businesses in general and the financial services industry in particular. This is a sign that it may be a busy year for financial services and regulatory lawyers.
Serge Tomassian
Senior Managing Partner
Tomassian Throckmorton & Inouye LLP
Irvine
The critical or hot legal issues are primarily going to be constitutional in nature and derived by either individual states or separate branches of government, including executive agencies, that wish to challenge or negate any executive orders or policy statements emanating from President Trump’s administration.
This will arise in the context of state versus federal government rights, including the issues of immigration laws and their enforcement, sanctuary cities, deportations, abortion, gun control, healthcare etc., where states, especially those with a Democratic-controlled legislature, wish to challenge and pursue a completely different policy than the Trump administration’s and in some cases the legislation passed by Congress.
Brett Williamson
Partner
O’Melveny & Myers LLP
Newport Beach
Healthcare is the most obvious segment that will be impacted; regardless of what changes are actually made, e.g.—repealing and replacing the Affordable Care Act entirely, versus merely amending it—any alterations to the regulatory structure will lead to increased work for health care attorneys, whose practice involves helping their clients navigate the complex legal requirements and ramifications.
The same is likely to happen in other highly regulated industry segments, such as energy and transportation. Also, if President Trump is able to put together a majority in Congress to push infrastructure spending, attorneys in the project finance area will undoubtedly be in demand. In terms of practices that may see less activity due to President Trump, I suspect antitrust enforcement will be significantly less active than was the case under the Obama administration.
