Legal News for Thurs 12/12 - Biden Admin Pushes SCOTUS to Avoid Climate Cases, 5th Circuit NASDAQ Diversity Rule Case, and DOJ's Stance on TikTok Ban

Minimum Competence

This Day in Legal History: Joseph H. Rainey Sworn in to U.S. House of Representatives

On December 12, 1870, Joseph H. Rainey was sworn in as the first Black member of the U.S. House of Representatives. Born into slavery in South Carolina in 1832, Rainey and his family gained their freedom when his father purchased their emancipation. Rainey became a successful businessman and returned to the United States after living in Bermuda during the Civil War. During the Reconstruction era, he was elected to Congress as a representative for South Carolina's 1st Congressional District, where he served until 1879.

In Congress, Rainey was a vocal advocate for civil rights, emphasizing the need for laws to protect Black citizens from discrimination and violence. He supported the Enforcement Acts, which aimed to curb the activities of groups like the Ku Klux Klan, and championed education and economic opportunities for freedmen. Rainey’s tenure was marked by his resilience in the face of racism and his efforts to uphold the principles of equality during a tumultuous period in American history.

Also on this day in 1787, Pennsylvania became the second state to ratify the U.S. Constitution. This significant decision was instrumental in encouraging other states to adopt the Constitution, ensuring the establishment of a unified federal government. Pennsylvania's ratification, occurring just five days after Delaware’s, helped build momentum for the creation of the United States as a constitutional republic.

Both events reflect crucial turning points in American history: one symbolizing progress in representation and civil rights, the other laying the foundational framework of the nation's governance. Together, they highlight the evolving journey of equality and democracy in the United States.

The Biden administration has advised the U.S. Supreme Court to avoid taking up cases brought by oil companies and Republican-led states aimed at blocking state and local climate change lawsuits. Solicitor General Elizabeth Prelogar urged the Court to decline appeals from oil companies challenging a Hawaii Supreme Court decision that permits Honolulu to sue major fossil fuel companies for allegedly deceiving the public about climate change. She also recommended rejecting efforts by 19 Republican-led states to prevent Democratic-led states from pursuing similar lawsuits.

Prelogar argued that the oil companies’ constitutional claims are still being addressed in lower courts and that the Republican-led states lack standing to block lawsuits that target private companies. She dismissed the argument that the lawsuits attempt to regulate emissions—a federal issue—stating the claims do not conflict with federal common law on air pollution. The Republican-led states contend that the Democratic-led lawsuits improperly attempt to regulate global emissions via state courts.

These cases involve prominent oil companies such as Exxon Mobil, Chevron, and Shell, as well as multiple state governments. The Supreme Court’s conservative majority had earlier sought the solicitor general’s opinion on these matters. The cases reflect ongoing legal battles over the intersection of state-level climate accountability and federal jurisdiction.

US Supreme Court should avoid climate change cases, Biden administration says | Reuters

The Fifth Circuit Court of Appeals struck down Nasdaq’s board diversity rules, reversing a prior SEC-approved mandate requiring Nasdaq-listed companies to diversify their boards or explain why they could not. The 9-8 decision emphasized that the SEC lacked the authority to enforce such requirements under the 1934 Securities Exchange Act, which primarily governs fair trading practices.

The regulations, implemented in 2023, required companies to include at least one woman, minority, or LGBTQ+ board member and disclose diversity metrics annually. Conservative groups, led by figures such as Edward Blum, argued that these rules exceeded the SEC’s legal scope, ultimately persuading the majority of Republican-appointed judges. Writing for the majority, Judge Andrew Oldham stated that diversity disclosures are not an ethical or customary obligation in securities trade.

The dissenting opinion, authored by Judge Stephen Higginson and supported by a mix of Democratic and Republican-appointed judges, argued that the SEC had acted within its authority. Higginson contended that market forces, not judicial intervention, should resolve disputes over the desirability of diversity disclosures. Despite disagreement, Nasdaq has announced it will not appeal the ruling, while the SEC is reviewing the decision.

For much more context than I could ever provide, I would encourage a perusal of the excellent Professor Ann Lipton's Mastodon thread breaking down some of the tacit and overt shifts, like the overall reorientation of securities laws to be solely about preventing fraud and the jettisoning of other goals, like accurate pricing.

Nasdaq Board Diversity Rules Struck Down by Fifth Circuit (2)

Fifth Circuit Strikes the NASDAQ Diversity Rule

The U.S. Justice Department has urged a federal appeals court to reject TikTok’s emergency bid to block a law requiring its parent company, ByteDance, to divest the app by January 19 or face a nationwide ban. TikTok argued in its filing that the law could effectively shut down the platform, which has over 170 million U.S. users. The Justice Department countered that Chinese control of TikTok remains a national security risk, emphasizing that the ban is a necessary precaution.

If implemented, the ban would not immediately stop users from accessing TikTok but would eventually render the app unusable due to restrictions on support and updates. A panel of judges upheld the law last week, and TikTok has since appealed to the U.S. Supreme Court. The companies hope a delay would allow time for the incoming Trump administration to determine its stance, as President-elect Donald Trump has stated he opposes a TikTok ban.

This ruling affirms the U.S. government’s broad authority to regulate or ban foreign-owned apps over national security and data privacy concerns, echoing previous legal challenges involving WeChat. TikTok's fate now hinges on whether Biden grants a 90-day extension of the divestment deadline and on the Trump administration’s next steps.

US asks court to reject TikTok's bid to stave off law that could ban the app | Reuters

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