Trump’s U-Turn in Big Law Fight Shows White House Fury for Firms

The Trump administration surprised everyone last week when it first dropped an appeal in its fight against four law firms and then, less than 24 hours later, reversed itself and declared the case to be back on.

The White House and Justice Department have yet to explain what prompted the dizzying two-day stretch. Late last week, a DOJ lawyer instead pressed an appeals court to overturn four separate rulings striking down Trump’s executive orders against the firms last year.

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The about-face has highlighted questions about the legal rationale behind Trump’s orders, targeting firms over ties to lawyers and causes the president sees as threats to his administration. But even if Trump ends up losing the appeal, he’s already gained a significant amount of leverage from the legal industry in hard-to-quantify ways, according to Bloomberg Law reporters Meghan Tribe and Justin Henry.

On this episode of our podcast, On The Merits, they speak with host Jessie Kokrda Kamens about the chaotic events of last week and where the president’s battles against the legal industry may be heading next.

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

This transcript was produced by Bloomberg Law Automation.

Jessie Kamens: Hello and welcome to On the Merits, the news podcast from Bloomberg Law. I’m your host, Jessie Kamens.

The Trump administration’s war on big law took a significant and, frankly, strange turn last week. It all began, of course, about a year ago when the president started firing off punitive executive orders against some of the biggest law firms in the country. The orders sent a panic throughout the industry and nine firms responded, in some cases preemptively, by promising hundreds of millions in pro bono work to avoid White House attacks.

However, four other firms went to court to challenge the legality of these orders, and they all won. The Trump administration was appealing these lower court rulings, but early last week, Justice Department lawyers said they were dropping their consolidated appeal. Then, less than 24 hours later, they did an about-face and told the court that, actually, never mind, the appeal is still on.

Today, we’re going to get into this dizzying series of events with Bloomberg Law reporters Justin Henry and Meghan Tribe, who have been covering it every step of the way. We’re going to get into the ramifications this might have on the appeal, but also about whether, even if the administration ultimately loses, it might still have gained something from this whole exercise.

I started off by asking Meghan to tell me about the reaction on Monday, when everyone thought the court case between the firms and the White House was finally over.

Meghan Tribe: The law firms all issued statements saying, essentially, that this showed that their position was indeed correct, that they had the law on their side, and that the fight was worth it. Less than 24 hours later, there was a bit of confusion, I think. I don’t think the law firms had any sense that, once this was filed, that the administration would reverse course so quickly, or at all, because it is an unusual move.

Jessie Kamens: Do we have any sense about why this happened?

Justin Henry: Well, I think it’s worth noting that the decision to withdraw from an appeal effort, the decision to drop a case, is not made lightly. It usually requires some authorization from senior members of the Department of Justice, which under this administration, we’ve seen to be working in close coordination with the Trump White House. It just speaks to how unusual it is that they would, presumably, get authorization from on high, and then change course pretty quickly.

The former federal prosecutors that I talked to say that it reeks of a political motivation involved. There’s a feeling that maybe the Trump White House didn’t love the news reporting that came out, and the feeling of vindication that the four law firms expressed.

Jessie Kamens: Have we heard from the White House whether they stepped in on this? Is there an official word?

Justin Henry: So we’ve been repeatedly reaching out to the Department of Justice lawyer who’s assigned to the case, Abhishek Kambli. And he has not responded to our multiple requests for comment.

Jessie Kamens: Meghan, I know that you and Justin spoke to some former prosecutors and other court watchers. What struck them about this development?

Meghan Tribe: I think what struck the former federal prosecutors and former DOJers was just how unusual this reversal was. Like Justin mentioned, this withdrawal had to go through several levels to get the sign off. And then within 24 hours, the Justice Department reversed course.

In talking with former federal prosecutors, they said initially that the withdrawal kind of intimated that their case wasn’t as strong against the law firms. One federal prosecutor said, you know, it just draws out the litigation and delays the likely victory for law firms. But the indecision makes the Justice Department look, in their words, less competent. And that might lead the court to be less deferential going forward to government lawyers.

Justin Henry: One of the pieces of feedback that I heard from another former federal lawyer is that, you know, this is widely being seen as a concession on the part of the DOJ, that this is kind of a losing argument. And there is a lot of good reasons to believe that it’s going to play into the arguments of the four law firms who can now tell the appeals panel, hey, look, even the DOJ was willing to, at one point, drop out of this case. That goes to show their confidence on the merits of their argument.

There’s another litigation ongoing between the Trump administration and the American Bar Association and at a hearing last week the lawyer for the ABA actually brought up the DOJ’s abrupt reversal, where they basically used that as evidence to say “See, the Trump administration is doubling down on their vindictive campaign against the legal industry.”

Jessie Kamens: So the DOJ filed a brief late on Friday in the case against the law firms. Did we learn anything new from that, Justin?

Justin Henry: I think we learned a couple new things. Some of my big takeaways from their brief are just seeing how the deals that the nine law firms that we’ve been talking about have been incorporated into the litigation against the four law firms who took a different route in taking the Trump administration to court over these executive orders.

In one of the first pages of the opening brief, the DOJ attorney litigating the case, Abhishek Kambli, says basically to the court, you know, in contrast to the four law firms that took us to court over these executive orders, we have nine law firms who pledged pro bono services to serve the public good. Kind of saying like, why did these four law firms have to be so difficult in taking an adversarial approach?

And the DOJ basically referenced those nine firms to say “See, these nine firms recognized the issues that President Trump was taking with Big Law, which is that in some cases it’s posing a national security risk and in other cases it’s engaging in what the President refers to as “DEI discrimination.”

Jessie Kamens: And do we have a date for argument yet?

Justin Henry: So as of the time of this recording, there has not been a date set or a judicial panel set to hear this case. And the reason for that is because the appeals court decided that this case should be heard on the same day and before the same judicial panel as another case involving a lawyer in the private sector who was targeted by Trump, and this lawyer’s name is Mark Zaid[HJ1.1], who represented a whistleblower member of the intelligence community who brought allegations that led to President Trump’s first impeachment.

So the four law firms have until March 27th to file their brief in this case and it’s pretty fair to assume that the DOJ’s abrupt reversal last week is going to factor into their argument.

Jessie Kamens: So this calls for a little bit of speculation. But if the law firms were to win, ultimately, in this case, do we know if the deals that Trump made with nine other law firms, leading to hundreds of millions of dollars in pro bono work for the Trump administration and for causes he cares about, would remain intact?

Justin Henry: I think it would make it a lot more difficult for the Trump administration to come knock on the doors of the nine law firms and say, what have you done for me lately? Given the fact that at multiple levels of the court system, if indeed we see the appeals panel side with the federal judges in their rulings, overturning the executive orders, it would make it very difficult for the Trump administration to have any kind of leverage in enforcing those agreements with the nine firms.

However, on the other side, I think we’re also learning that a lot of the impacts of the Trump administration’s interactions with law firms are outside of the courtroom. There’s a whole PR liability involved in being seen as on the outs with the Trump administration. And that’s something that the law firms want to avoid, regardless of what a judge says.

Meghan Tribe: The deals themselves are very opaque. They were announced on True Social. The deals that we’ve seen come down don’t really differ much from there. But is it a contract? I mean, that’s an arguable question for the Trump administration. Is this a contract that these law firms entered into? These deals, I think, have all led to a lot more questions than we probably can even battle them at this point.

Jessie Kamens: And if the law firms win, it does seem that, you know, Trump’s threat would be off the table in terms of either being able to make more deals with firms or leveraging executive orders against law firms.

Meghan Tribe: I think I know what you’re getting at, which is like, what else could he do to potentially come at law firms? And that was something that, you know, I discussed with a source last week, which was the Trump administration in these executive orders specifically targeted access to federal courts, access to federal contracts. But there is perhaps an alternative world where the punitive measures aren’t as strong as that, which the court has said those are unconstitutional. You cannot restrict a lawyer’s access to a court or tell anyone who they can have as their counsel.

So rather than have those extremely restrictive measures, the source said, perhaps, you know, there could be something as small as you don’t get deference to have a meeting with a justice department official or an official in any capacity, perhaps to get a deal done for your clients. You don’t get that premier access that current law firms enjoy in order to best serve their clients. So perhaps there is an alternative, you know, strategy being milled about right now in the Trump administration to say, okay, perhaps we don’t go that far now that we know where the courts have said we can’t go, but perhaps we can do something else.

And we’ve already seen it in terms of the EEOC investigations. There was the recent FTC letter sent to law firms regarding their connection to diversity lab. So this is an administration that is going to explore every avenue it can to exact its agenda.

Justin Henry: I also think we can’t underestimate the political advantage to the Trump administration for being seen as cracking down on a big law industry that the president perceives and that his allies perceive to be slanted against conservatives and slanted in favor of the political left. I think that is a very salient feeling among President Trump’s allies. And so even if the cards are stacked against the Department of Justice’s legal argument at the appellate level, the political advantage of being seen as cracking down on an industry that is systematically against us is a political win, regardless of the outcome of a judge’s decision.

Jessie Kamens: Well, we will be keeping up with the two of you to find out what happens next in this very important and very fascinating case. Thank you.

Justin Henry: Thank you. Great to be here.

Meghan Tribe: Same.

Jessie Kamens: And that’s it for today’s episode of On the Merits. For more updates, visit our website at news.bloomberglaw.com. Once again, that’s news.bloomberglaw.com.

The podcast today was produced by myself, Jessie Kamens, and David Schultz. Our editors were Chris Opfer and Alessandra Rafferty, and our executive producer is Josh Block. Thanks, everyone, for listening, and we’ll see you next time.