Practice Areas
Practice Areas

Regulatory Litigation

Practice Leader: Marc D. Machlin

Pepper Hamilton LLP’s regulatory litigation practice is dynamic and broad in scope. To achieve the desired results for our clients, we draw upon our knowledge of the regulatory process and our understanding of particular sectors of the economy.

The firm’s regulatory practice extends into the following substantive areas:

  • strategic advice to utilities, railroads and other firms confronting deregulation or restructuring
  • representing utilities, marketers and industrial energy users in proceedings before the Federal Energy Regulatory Commission (FERC), the U.S. Department of Energy (DOE) and state public utility commissions
  • representing rail carriers, motor carriers, aviation services providers and manufacturers of automotive equipment in proceedings before the U.S. Department of Transportation and its various sub-agencies
  • representing foreign and domestic companies in international trade disputes and in a wide array of import-export matters
  • representing defense sector clients and other companies in government contracts litigation
  • assisting manufacturers, e-commerce companies and other clients affected by the Federal Trade Commission’s rules and policies pertaining to advertising, labeling and deceptive trade practices.
While many of our representations involve contested administrative proceedings or appeals from agency orders, we also have an active counseling practice, focusing on avoiding enforcement actions or other lengthy proceedings. In addition, we advise clients on the regulatory aspects of major transactions, such as mergers, acquisitions and divestitures.

Strategic Advice to Network Industries Undergoing Deregulation or Restructuring

For more than 20 years, Pepper lawyers have advised clients in network industries undergoing a full or partial transition from regulation to competition. By their nature, network industries, such as public utilities, railroads and certain telecommunications firms, pose the problem of how to structure relationships between competing, but interconnecting firms. A related question is how to organize business relations between suppliers of network services and their customers in a way that is consistent with the public interest. The transition of a regulated industry to competition raises profound issues that can affect a company’s structure, business plan and corporate culture; among other things, the enterprise must free itself from certain forms of regulation and move from an operational or service focus to a market focus.

We employ an inter-disciplinary approach that involves economists, accountants, management consultants, engineers, scientists and other technical personnel. We use litigation only when necessary and have the capacity to solve problems without resort to the courts or to the regulatory agencies. In addition, Pepper draws on the experience of its clients and outside resources, as appropriate. We are willing to challenge the conventional wisdom inside a corporation or within an industry, always calibrating our efforts with our client’s willingness to accept risk.

We have found the theoretical and practical issues that arise in these representations lead to insights that can be used in other industries. The details of access pricing, essential facility issues, network antitrust theories and organizational restructuring learned in one industry can be helpful in assessing similar issues in another. In fact, these cross-industry perspectives facilitate creative approaches that may be beyond the perception of those with experience in only one regulated industry.

Energy Regulation

Pepper practices before FERC, DOE and state public utility commissions. We advise clients on energy projects, counsel on ratemaking issues and advise on energy regulatory aspects of transactions. In the electric power sector, our clients include investor-owned utilities, power marketers, independent power producers, industrial customers and an independent transmission company. In the natural gas sector, our clients include local gas distribution companies, energy marketers and industrial gas consumers.

Representative Engagements
  • an electric utility in connection with an antitrust investigation by the Federal Trade Commission, which focused on a proposed merger between another electric utility and a fuel supplier
  • an owner of a cogeneration plant in resolving a tariff dispute with an electric cooperative that provides backup power
  • a passenger railroad in connection with a 180-megawatt frequency converter project with a cost in excess of $100 million; provided counseling on interconnection and other regulatory issues involving both an electric utility and an independent system operator (ISO)
  • one of the largest purchasers of electricity in the mid-Atlantic region in a proceeding before the Maryland Public Service Commission involving the restructuring of an electric utility, the development of unbundled rates and the establishment of a mechanism allowing the recovery of appropriate stranded costs
  • an industrial company hosting a cogeneration facility in connection with federal court litigation and related FERC proceedings arising under the Public Utility Regulatory Policies Act of 1978 (PURPA); counseled the client on a settlement ending the dispute.
Transportation Law

We practice before the U.S. Department of Transportation and its sub-agencies, including the Federal Aviation Administration, the National Highway Traffic Safety Administration, the Surface Transportation Board and the Motor Carrier Safety Administration. In addition to handling licensing, permitting and rulemaking proceedings, we assist clients with regulatory aspects of major transactions, such as mergers, acquisitions and divestitures. Our clients include rail carriers, motor carriers, barge lines, large shippers, aviation services firms, manufacturers of automotive equipment and manufacturers of aircraft components.

Representative Engagements
  • a Class I rail carrier in connection with a line sale opposed by another rail carrier holding trackage rights over the transferred line; obtained a favorable STB decision authorizing the transaction
  • a trucking company in a successful administrative appeal of an unfavorable safety rating issued by the U.S. Department of Transportation
  • a producer of sand, gravel and asphalt in connection with the abandonment of a rail segment that bisected a quarry and the resolution of Rails-to-Trails issues
  • the Association of American Railroads in rulemaking proceedings relating to the determination of the industry’s cost of capital and its overall revenue requirements
  • a mirror manufacturer in connection with the development of procedures necessary to ensure compliance with the automotive safety standards issued by the National Highway Traffic Safety Administration
  • a manufacturer of aircraft engine parts; provided advice on FAA policies pertaining to parts manufacturing approval and successfully resolved a dispute with an engine manufacturer.
International Trade

We provide assistance in three broad areas of international trade law: (1) international trade litigation; (2) customs and import restrictions; and (3) export controls and economic sanctions. Our international trade litigation experience includes antidumping and countervailing duty investigations and reviews, Section 337 investigations, Section 201 “Safeguard” cases and Section 301 actions. We have represented clients in proceedings under the World Trade Organization (WTO) agreements and before the U.S. Department of Commerce, the U.S. International Trade Commission, the Office of the U.S. Trade Representative, the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit and the U.S. Supreme Court.

We advise clients on compliance with U.S. customs laws and represent clients in making determinations or obtaining rulings from the Bureau of Customs and Border Protection regarding the classification, valuation and marking of merchandise, quotas, prior disclosures, audits, seizures, and NAFTA, GSP and other preferential program issues.

We handle export control issues such as registrations, commodity jurisdictions, classifications, licenses, compliance programs, audits, voluntary disclosures and enforcement actions before the Directorate of Defense Trade Controls of the U.S. Department of State and the Bureau of Industry and Security of the U.S. Department of Commerce. We also provide guidance on the economic sanctions enforced by the Office of Foreign Assets Control of the U.S. Department of Treasury. In these various and diverse international trade matters, we represent foreign and domestic clients, including private companies and governments.

Representative Engagements

  • representing U.S. petitioners and foreign respondents in antidumping and countervailing duty actions before the U.S. Department of Commerce, the U.S. International Trade Commission, the U.S. Court of International Trade and NAFTA panels; representative industries include lumber, cement, sulfanilic acid, magnesium, manganese sulfate, cookware and red raspberries
  • representing domestic and foreign interests before the Office of the U.S. Trade Representative, the U.S. Congress and WTO panels involving Section 201 “Safeguard” actions, Section 301 and the Generalized System of Preferences; representative industries include steel, wheat gluten and rubber chemicals
  • advising domestic and foreign parties on various import and export regulatory and transportation matters, including issues involving the Federal Maritime Commission, the U.S. Department of Transportation and the Office of Foreign Assets Control, and export licensing questions before the U.S. Departments of State and Defense, and the Commerce Department Bureau of Industry and Security
  • assisting companies in obtaining commodity jurisdiction determinations and necessary export licenses, making voluntary disclosures of violations of the export control laws, assisting in agency investigations of violations and implementing export control compliance programs
  • assisting companies when goods have been excluded or seized by the Bureau of Customs and Border Protection under violations of customs laws or other U.S. laws, including negotiations over return of seized property. Assisting importers in determining the correct classification and country of origin marking of imported merchandise, preparing customs compliance programs and counseling importers during customs audits, including audits under NAFTA by all three signatory countries.
Government Contracts

Our government contracts practice includes counseling and litigation, and covers a broad spectrum of government contract-related provisions. We have represented clients prosecuting and defending bid protests, in a wide range of industries, in all available fora. We also have represented clients in claims arising out of non-payment and improper terminations, both at the Court of Federal Claims and in boards of contract appeal. Our counseling practice covers most sections of the Federal Acquisition Regulation (FAR), including provisions dealing with human resources, foreign origin, cost principles and selection criteria. In addition, we are experienced in advising clients concerning subcontracts and in litigating subcontract issues that cannot be resolved amicably.

Representative Engagements

  • defending successfully the award of a contract by the Defense Supply Center Philadelphia to supply subsistence food to all American servicemen and women in South Korea
  • protesting the award of a contract for privatizing on-base housing at Ft. Meade; Pepper also advised a different offeror in connection with its offer to provide private housing at Ft. Lewis
  • protesting successfully the award by the Army’s Operations Support Command of a contract for yellow dye, on the grounds that the Army had violated the Trade Agreements Act
  • protesting successfully the award by the Army’s Military Traffic Management Command of a contract to supply towing services to Guantanamo Bay, Cuba
  • litigating defective specification and cardinal change claims against the Army Corps of Engineers arising from an environmental cleanup contract
  • protesting a Navy award of a contract for guard services at Vieques Island, Puerto Rico
  • litigating against the Department of Defense in the federal district court over the Army’s award of a cooperative agreement to establish and maintain an electronic circuit board manufacturing development center. This was one of the last protests litigated in a federal district court, and one of the only protests ever filed concerning the Department of Defense’s regulations concerning cooperative agreements.
  • defended successfully in federal district court and in the court of appeals the award of a contract by the General Services Administration for a new federal building.
FTC Regulation of Labeling, Advertising and Marketing

We counsel clients on compliance with Federal Trade Commission rules and policies applicable to labeling, advertising and marketing. We also assist clients in developing or fine-tuning marketing campaigns. A substantial portion of this work involves online marketing and customer rewards programs.

In addition, we represent clients injured by deceptive marketing campaigns or deceptive advertising. Where appropriate, we aggressively challenge deceptive marketing practices in the courts. If a client is facing substantial economic harm due to deceptive advertising or marketing, we often work closely with the FTC staff to discourage the unlawful conduct.

Representative Engagements

  • a medical device manufacturer in connection with an independent review of the company’s advertising claims
  • an e-commerce company in the successful development of marketing practices that comply with all FTC regulatory standards
  • a medical device manufacturer in connection with an independent review of the “Made in the USA” claims included in the company’s packaging, labeling and advertising
  • an online sweepstakes company; provided counseling on regulatory requirements in connection with the successful launch of new services
  • an e-commerce company in connection with the successful development of an online customer rewards program.

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