Saturday, May 25

A potentially huge Supreme Court case has a hidden conservative backer

The Supreme Court on Wednesday will hear arguments that, on paper, concern a group of commercial fishermen who oppose a government tax they say is unreasonable. But the lawyers who helped bring their case to the nation’s highest court have a far more powerful backer: petrochemical billionaire Charles Koch.

The case is one of the most important to come before the courts in recent years. A victory for fishermen would do more than set aside the monitoring fee, part of a system meant to prevent overfishing, which they oppose. It would most likely dramatically limit the power of many federal agencies to regulate not only fisheries and the environment, but also health care, finance, telecommunications and other businesses, legal experts say.

“It might all seem very innocuous,” said Jody Freeman, founder and director of the Environmental and Energy Law Program at Harvard Law School. and a former Obama White House official. “But it’s connected to a much larger agenda, which is essentially about disabling and dismantling federal regulation.”

The lawyers representing New Jersey fishermen work pro bono and belong to a public interest law firm, Cause of Action, which does not disclose any donors and says it has no employees. However, court documents show the lawyers work for Americans for Prosperity, a group funded by Koch, chairman of Koch Industries and a supporter of anti-regulatory causes.

The law firm’s board of directors includes one of the firm’s top lawyers who has represented Koch Industries in a number of cases, such as the company’s past defense of lawsuits related to its handling of petroleum coke, a byproduct of petroleum refining, and in his opposition to stricter substance regulations.

The attorney also represents Koch Industries in an ongoing lawsuit filed by the Minnesota attorney general accusing the company of deceptive practices related to climate change.

Other board members include executives from groups financed mostly by Koch or by Koch Industries, America’s second-largest private company, after Cargill.

Ryan Mulvey, an attorney for Cause of Action and one of the lawyers arguing the case before the Supreme Court, said the focus “should be on the fishermen and what they are fighting.”

“This case concerns the livelihoods of hard-working, family-run fishing businesses that are under threat due to unconstitutional intervention by the government,” Mulvey said.

A spokesperson for Cause of Action said the group was within its constitutional rights not to reveal its donors. The spokeswoman, who wished to remain anonymous, said Cause of Action and Americans for Prosperity were separate organizations. Neither Mr. Koch nor Koch Industries is involved in the case, she said. Koch Industries did not respond to requests for comment.

Reducing the state’s power to regulate business has been a long-standing goal of conservative legal activists and their donors, who have been engaged in a years-long effort to use the court system to rewrite environmental law. In 2022, they scored a victory with a Supreme Court decision that could dramatically limit the federal government’s authority to reduce carbon dioxide from power plants. Emissions from the burning of fossil fuels are one of the main causes of climate change.

The legal doctrine contested in the fisheries case, Loper Bright Enterprises v. Raymond, No. 22-452, has broader implications. The doctrine, known as Chevron deference after a 1984 Supreme Court ruling involving the oil and gas giant, authorizes federal agencies to interpret ambiguities in laws passed by Congress.

Congress is not equipped to handle the day-to-day administration of the legislation it passes, the reasoning goes, so it should rely on federal agencies to implement laws and policies. Weakening or eliminating Chevron deference could limit the power of federal agencies to interpret the laws they administer.

The Biden administration has defended the rule, arguing that executive agencies, unlike courts, are politically accountable.

Supporters of the law say that the case is a vehicle for other interests in addition to the complaint of the fishermen.

“These fishing workers are providing cover for what is ultimately a Koch campaign,” said Lisa Graves, executive director of the progressive watchdog group True North Research and a former top Justice Department official.

With the Supreme Court’s shift to the right in recent years, free-market advocates appear to see an opportunity to clip the wings of federal power, in part by bringing carefully selected cases before sympathetic judges.

This shift was aided by groups, including those linked to Koch, who worked to support the nomination and confirmation of the five most recent Republicans appointed to the bench.

At a forum hosted in November by the Federalist Society, a conservative legal group, a lawyer laid out the strategy.

“To successfully run such a campaign, you need three things,” Damien M. Schiff, senior attorney at the Pacific Legal Foundation, told the forum. “Money, legal staff and a judiciary receptive to strategically selected and planned legal topics.”

Conservative groups and their supporters now have all of these things, Schiff said, according to a video. In particular, “money will never be a problem,” she said. “You can easily go to the Supreme Court on the cheap.”

“Congratulations,” responded David Doniger, a lawyer at the event who, 40 years ago, argued the Chevron case on behalf of the Natural Resources Defense Council. “But for me this means openly disguising private interests with high-sounding constitutional arguments.”

In an interview, Schiff said cases like these are quickly becoming a favorite way for groups to fight federal regulations. “When you compare the impact you can have on society through litigation, and especially winning in the Supreme Court, with lobbying with administrative agencies or through political campaigns,” she said, “it’s much more efficient.” .

His group, Pacific Legal Foundation, is part of a network of conservative research organizations that have received funding from Mr. Koch and other donors.

The Loper Bright case, now consolidated with a similar case involving Rhode Island fishermen, has in many ways offered litigants a compelling storyline of small businesses fighting for survival. The fishermen are featured prominently on a page offering information about the case, promoted via Google ads.

“Nobody in a family business wants to be the last one to do it, everyone wants to pass it on and my fear is that I might not be able to do it,” says Stefan Axelsson, introduced as a third-generation commercial fisherman, in one video featured, titled “Fishermen Fight Against Illegal, Job-Killing Government Mandate.” Mr. Axelsson could not be reached for comment.

The page does not mention Koch’s affiliations, although a contact form generates an email to Cause of Action, as well as Stand Together, a nonprofit group founded by Mr. Koch, which remains one of his donors.

The Cause of Action Institute has revealed little about its funding: A year before its creation, the Supreme Court’s Citizens United ruling allowed billions of dollars in spending by groups that don’t disclose their donors.

Cause of Action founder Daniel Z. Epstein was previously a fellow at the Charles G. Koch Foundation. The group’s first known address was the same as Americans for Prosperity.

In an interview, Epstein, who later served as an advisor to Donald J. Trump’s first presidential campaign and transition team and is now an associate professor at St. Thomas University, said Cause of Action’s work with fishermen it did not arise from a motivation to overturn the Chevron doctrine. “It has everything to do with an observation program that spies on fishermen,” he said.

He declined to discuss financing.

According to Stand Together’s tax returns, Cause of Action received two cash injections, both from Mr. Koch’s Stand Together, including more than $4 million in 2019 and $1.1 million in 2020. In its most recent tax return, which covers the period in which it was working on the fishermen’s case, the group reported that it had no employees. The case was brought by lawyers working for Americans for Prosperity, including Mr. Mulvey.

The board leading Cause of Action includes William Burck, managing partner of the law firm Quinn Emanuel, who has represented Koch Industries in environmental regulatory litigation. Burck is the lead attorney in the defense of Koch Industries in a separate case before the Supreme Court, the lawsuit brought by Minnesota that accuses Koch and other oil and gas companies of undermining the public’s understanding of the dangers of burning fossil fuels.

Other board members include Emily Seidel, CEO of Americans for Prosperity, former director of special projects for Koch Companies Public Sector, the lobbying arm of Koch Industries; and Kurt Level, the current deputy general counsel for the public sector at Koch Companies.