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Regulation is dead; long live litigation?

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The temporary block on new federal overtime rules is a victory for the camp that argues too many rules are stifling the economy and killing job growth. But it would be foolish to believe the road to lessened regulation is straightforward.

The election of Republican Donald Trump, coupled with GOP control of the U.S. Congress, certainly clears one path to lifting regulations on business.

The U.S. Supreme Court also may be more open to persuasion once Trump makes his pick to replace the late Justice Antonin Scalia.

But Washington, D.C., is not the only power center in the U.S. People who take it as their mission to hold corporations accountable, often through lawsuits, will look for other venues.

One of them could be Harrisburg.

Republicans enjoy a majority in Pennsylvania’s legislature, but the state has a Democratic governor, attorney general, auditor general and treasurer. They have power to shape policy, or resist it.

Indeed, Republican governors often balked at directives from President Barack Obama’s administration on issues ranging from transgender bathrooms to the expansion of Medicaid. Will Wolf and his Democratic peers do the same under Trump?

State attorneys general, meanwhile, have been flexing their muscles ever since they banded together in a successful lawsuit against tobacco companies in the 1990s.

A Republican attorney general, Adam Laxalt, of Nevada, has been leading the charge against the overtime rules, which had been scheduled to take effect on Dec. 1. Others have taken up the baton against the Clean Power Plan, Obama’s regulatory effort to clamp down on carbon emissions from power plants.

New York’s attorney general, Democrat Eric Schneiderman, has already come out swinging against any efforts by Trump and the federal government to undercut his office’s authority to regulate Wall Street. It was Schneiderman, after all, who sued Trump University, which recently settled the case for $25 million

Where will Pennsylvania’s incoming attorney general, Josh Shapiro, focus his energy?

The lower courts will be another venue to watch, not just for the cases they might hear but for efforts to hamper lawsuits in the first place.

Business groups have long pushed changes that would hobble what they consider nuisance suits, many pushed by plaintiffs’ attorneys on slim evidence. The vice president-elect, Mike Pence, was an advocate as governor of Indiana. But Trump said little about the issue during the campaign.

“He has filed a number of lawsuits himself so he does not fit into the traditional Republican tort-reform category in that sense,” said Christopher Robinette, a professor at Widener University Commonwealth Law School in Susquehanna Township, Dauphin County.

Trump’s ultimate direction is unpredictable. But, Robinette said, “I can tell you it seems like the traditional defense-oriented groups, like the Chamber of Commerce, are optimistic and the traditional plaintiffs-oriented groups, like the trial bar, are pretty pessimistic.”

A lot of the changes, however, depend on action at the state level. The issues include transparency around outside law firms contracting with government entities to pursue businesses; disclosure of how class-action lawsuits are funded; and control over so-called venue shopping, in which plaintiffs’ lawyers file cases in jurisdictions where they expect a bigger payout from juries.

“Pennsylvania is well behind on a number of things that should be fixed legislatively,” said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry in Harrisburg.

Ahead or behind, ready or not, Pennsylvania could soon become a battleground in the war over how much regulation is too little or too much.

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Joel Berg

Joel Berg

Joel Berg is editor of the Central Penn Business Journal. Born in Philadelphia, raised in Northern Virginia and now living in York, he's a graduate of Franklin & Marshall College and the University of Maryland. Have a question or story idea? Email him at jberg@cpbj.com. Follow him on Twitter, @JoelBYorkPa.

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Bob Evans June 27, 2017 1:00 am

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