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GOP lawmakers target corporate law firms over hot-button issues

Houston Chronicle 11/23/2022 By Allen Pusey and Mark Curriden, texas lawbook
© Charlie Riedel, AP

Republican lawmakers in Texas and Washington, D.C., are threatening some of the nation’s largest corporate law firms if they provide what the lawmakers consider to be improper advice on issues such as climate change, diversity and abortion.

Texas legislators have even threatened business lawyers with criminal prosecution and disbarment.

In letters sent Nov. 3, five GOP senators on the Judiciary Committee told 51 of the nation's largest law firms, including 33 with offices and lawyers in Texas, that they have a "duty to inform clients of the risks they incur by participating in climate cartels and other ill-advised ESG schemes."

The memo doesn't describe what a "scheme" involving environmental, social and governance principles might look like. Nor does it say what is objectionable about efforts to defend the environment or democratize corporate capitalism.

In July, 11 members of the politically conservative Texas Freedom Caucus sent a letter to Sidley Austin Dallas partner and chair Yvette Ostalaza, threatening her and other corporate law firms operating in Texas with criminal prosecution, civil sanctions and a ban on practicing law if they help their employees in the state get an abortion in another state. 

POLITICS: Texas mail-order abortion requests nearly doubled after new bans, study finds

The three-page letter to Sidley Austin, which has nearly 200 lawyers in Houston and Dallas, accused the firm of being “complicit in illegal abortions.” The Freedom Caucus members posted the letter on the group's website and sent a copy to Texas Attorney General Ken Paxton. Sidley declined to comment about the letter.

The letters, legal experts say, show that conservative Republican lawmakers believe they can score political favor with their base by attacking corporate lawyers, which they see as facilitating more liberal causes.

“Corporate law firms, especially in Texas because of the political environment, are taking these letters very serious,” said Kent Zimmermann, a consultant who works with several Texas law firms. “These are pure political hit jobs, but the law firms do not want to give any of these threats oxygen by responding.”

"It puts law firms in an unfair position in what amounts to a play to the (GOP) base," Zimmermann said.

Law firm leaders need to respect the lawmakers, even if the demands are not legally sound, Zimmermann said.

"The ESG movement attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box," states the letter from the U.S. senators. "Of particular concern is the collusive effort to restrict the supply of coal, oil and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad."

"To the extent that your firm continues to advise clients regarding participation in ESG initiatives, both you and those clients should take care to preserve relevant documents in anticipation of those investigations,” the letter concludes.

Randy Johnston, a legal ethics expert in Dallas, said at least some of the authors should've known better than to engage in thinly veiled threats. 

"It's a stupid letter; a totally stupid letter," Johnston said. “It's kind of offensive in concept. Some of the authors are also lawyers and are flirting with an ethical violation by this attempt to intimidate other lawyers in connection with those lawyers’ representation of advice to clients.”

Dru Stevenson, a professor at the South Texas School of Law in Houston, describes the letter as "mostly political theater," but he cautions that it needs to be taken seriously.

Stevenson, who studies the legal issues associated with the ESG movement, says antitrust litigation may prove to be the only real weapon to curb increasingly popular trends toward climate change mitigation and, more specifically, energy transition and decreased use of carbon-based fuels such as oil, natural gas and coal.

"The senators can't sue, only threaten legislation,” Stevenson said. “For now, they are stuck (with the Biden administration), but the issue is worth keeping in mind. The political pendulum goes back and forth.”

Neither of Texas' U.S. senators -- John Cornyn and Ted Cruz -- signed the letter to the corporate firms, though both serve on the Judiciary Committee. Neither Cornyn nor Cruz responded to requests for comment. 

The lawmakers also threatened to introduce new bills next year that would “prohibit any employer in Texas from paying for elective abortions or reimbursing abortion-related expenses — regardless of where the abortion occurs and regardless of the law in the jurisdiction where the abortion occurs.” 

The Texas Lawbook identified more than 20 national corporate law firms operating in Texas — including Sidley, Kirkland & Ellis, Gibson Dunn, Latham & Watkins and Simpson Thacher — that have stated publicly or in memos to employees that the firms will provide financial assistance to those who wish to seek reproductive health care in other states.

Three Texas-based law firms — Akin Gump, Susman Godfrey and Vinson & Elkins — have publicly made such a commitment. 

Houston-based V&E, which is the largest law firm in Texas, told the Texas Lawbook that the firm “will, as part of its health plan, provide a travel benefit for covered health care services that are unavailable locally.” V&E was the first Texas law firm 25 years ago to offer same-sex benefits to its lawyers and staff.

Two leading academic experts, Professor Joanna L. Grossman of Southern Methodist University's Dedman School of Law, and Professor Josh Blackman of the South Texas College of Law Houston, say members of the Texas Freedom Caucus should be taken seriously.

”As absurd as the letter is, I think Sidley has no choice but to take it seriously,” said Grossman, who serves as the Ellen K. Solender Endowed Chair in Women and the Law at Dedman. “This is not because the Freedom Caucus is making good points. However, the anti-abortion legislators and executive branch officials in Texas have made clear that they intend to take extreme positions, whether supported by the law or not, and intend to target people to use as examples.”

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