Biglaw

Tech Company Skirmishes Highlight Biglaw's Revolving Door With The FTC

That everyone being investigated by the FTC is represented by FTC attorneys is... problematic.

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While Trump rails against Facebook for having the gall to occasionally fact-check the nonsense passed around its platform and Democratic candidates are seriously discussing breaking up Amazon, it’s becoming clear that the leeway big technology firms have had for years is going to be reined in regardless of who controls Washington. In the meantime, the FTC is ratcheting up enforcement of tech companies, having secured a pair of big wins last month over Facebook and Equifax.

But as the FTC does its job, these tech companies are lawyering up with former FTC lawyers who’ve decamped to Biglaw.

Facebook enlisted Sean Royall, an attorney with the firm Gibson Dunn, who was previously a deputy director in the FTC’s Bureau of Competition from 2001 to 2003, according to the law firm’s website. Current FTC Chairman Joseph Simons was the bureau’s director at the time.

And Edith Ramirez, a Democrat who was selected by then-President Obama in 2013 to chair the FTC, represented Equifax over privacy charges stemming from their massive 2017 data breach. Ramirez, who left the agency in February 2017 to join the law firm Hogan Lovells, has also defended Google-owned YouTube against a class action lawsuit over children’s privacy. A federal judge in South Carolina threw the case out in April.

On the one hand, this makes a lot of sense. Who could possibly know the procedures and motivations of an investigating agency better than someone who used to work there? Former agency officials offer insight and experience that’s hard to find among practitioners who’ve spent their whole life on the outside.

On the other hand, just as there are many excellent criminal defense attorneys who’ve never worked as prosecutors, it’s possible to build expertise defending antitrust actions without being on the other side. And the risk that the rapid-fire revolving door system could undermine the mission of the FTC is high:

“There’s just an enormous expectation that either you yourself will revolve if you’re at the FTC, or that in almost any important matter someone opposite you at the table is a former colleague, and maybe a former boss who gave you a promotion or a friend,” [Executive director of the Revolving Door Project Jeff] Hauser told The Hill.

“I mean, there’s a lot of ongoing social connections between current and former FTC lawyers, who are often going to be ostensibly on the opposite side of tables,” he added. “And I think it would be an act of robotic perfection for that to not influence the tenor of the conversations at those tables.”

The adversarial system breaks down when the other side of the table is approaching the matter as if they’re an alternative agency viewpoint instead of an opponent. The whole conflict changes when one side is acting like a dissenting commission member rather than an outside attorney and that influences how the sausage is made — more likely than not in ways that inure to the benefit of the company.

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Still, these folks can’t stay in the government forever and they’ve made their livelihood in trade commission litigation. They wouldn’t have much to bring to the table of the firm if forced to do only slip and falls the rest of their lives. The legal academy can’t absorb a bevy of new FTC professors every year, so some of these folks have to get back into private practice. But the government can do a better job of policing conflicts of interest.

Peter Kaplan, a spokesman for the FTC, told The Hill in a statement, “The FTC strictly adheres to all federal government ethics rules and guidelines.”

Those include a lifetime ban on former officials representing any companies that they were personally involved in overseeing in cases before the federal government.

That’s a good start, but the agency should consider making employees above a certain level off-limits to practice in this area for a longer blackout period. If a line attorney wants to move to Biglaw that’s one thing, but if a commission member who actively shaped policy jumps ship they should be forced to sit out. A ban on representing a specific company doesn’t address the conflict involved when a defense attorney has real knowledge of how overarching policy is being shaped and the sort of deep personal connections with the people making the supervisory calls on cases.

There may not be an easy answer, but with tech companies increasingly being hauled in front of the FTC with their former FTC attorneys in tow, everyone should at least start thinking about what can be done.

Tech fight puts former FTC officials in high demand [The Hill]

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HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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