Eugene Scalia is a well-known name in Washington — his father is U.S. Supreme Court Justice Antonin Scalia. The younger Scalia is a partner at Gibson Dunn & Crutcher who has carved out a niche representing business groups against regulatory agencies over corporate rules they consider unnecessary. His track record suing the Securities Exchange Commission is 4-0. Last month, he and Gibson Dunn partner Daniel Davis sued the Commodity Futures Trading Commission on behalf of the U.S. Chamber of Commerce and the Investment Company Institute, a trade group for investment companies, in an attempt to shoot down a new rule that would require investment companies and mutual funds to register and be regulated by the CFTC.
This month, Scalia and Gibson Dunn partner Ted Olson were recently retained by Reston wireless provider LightSquared in what could be litigation against the Federal Communications Commission. The agency recently revoked approval to allow the wireless company to build a high-speed wireless network because it might interfere with GPS signals used by the military and aviation industry.
Scalia, 48, was an English major at the University of Virginia and once considered becoming an English literature professor. Instead, he went to law school at the University of Chicago, landed a job in the speechwriting office of the Education Department, then moved to Los Angeles in 1990 to work at Gibson Dunn’s West Coast headquarters. Eighteen months later, he returned to Washington and has stayed ever since, and in 2002 was appointed solicitor (chief legal officer) for the Labor Department by President George W. Bush. He now heads Gibson Dunn’s 45-attorney labor and employment group in Washington.
Scalia spoke to Capital Business last week. The following is an edited version of that conversation:
Why are the Chamber and Investment Company Institute opposed to this new CFTC rule?
[Investment companies] would have to register with CFTC to be regulated by CFTC, and be regulated by the National Futures Association, which is the self-regulating industry association that issues rules. Investment companies would get two new regulators, even though they have two existing regulators — the SEC and FINRA. In addition, they have to make numerous filings, some monthly, with CFTC. It’s going to cost millions to assemble and file. The CFTC rules conflict in some places with SEC rules. SEC rules say you can’t publicize certain things and the CFTC rules say you must. They adopted the new rule not knowing the ultimate obligations and burdens [for businesses].
What is the significance of this case? Is it representative of the financial industry pushing back against more regulations passed after the 2008 economic collapse? [The rule is not part of Dodd-Frank, but rather comes after a request by the National Futures Association.]
The case reflects how much more headway needs to be made in eliminating costly unnecessary and duplicative regulation. Last year and this year, the White House has emphasized the importance to our economy of eliminating unnecessary and burdensome regulations, yet time and again you see rules like this adopted by the CFTC, which impose costs on businesses, costs on investors and don’t deliver any real benefits.
No one has suggested that mutual funds or other investment companies had a role to play in the financial debacle of 2008. No one has suggested that CFTC regulation of investment companies would’ve prevented it.
You were once the chief legal officer at the Labor Department. What are the big labor and employment issues businesses should be watching?
Litigation over companies’ overtime practices remains intense. DOL has shown particular interest in pursuing inappropriate independent contractor relationships, that’s something employers should be thoughtful about. I spend a significant part of my employment practice advising companies on what to do to comply with the law. Effective internal complaint whistleblower procedures are valuable to comply with wage-and-hour laws, sexual harassment laws and other important requirements. One of companies’ greatest fears is employment class action litigation. It make sense to examine pay and promotion policies.