U.S. Aims to Dismiss Lobbyist Suit

Trade groups claim First Amendment rights are being violated.

WASHINGTON — The Justice Department on Wednesday filed a motion to dismiss a lawsuit brought by executives from the American Apparel & Footwear Association, National Council of Textile Organizations and National Retail Federation challenging the Obama administration’s ban on federally registered lobbyists serving on trade advisory boards and commissions.

This story first appeared in the December 15, 2011 issue of WWD.  Subscribe Today.

The lawsuit charges that the Executive Branch’s policy to exclude federally registered lobbyists from serving on the Industry Trade Advisory Committees, or ITACs, that are managed by the Commerce Department and the U.S. Trade Representative’s office, is unconstitutional because it violates their First Amendment rights and denies “equal protection of the laws.” Plaintiffs are seeking an injunction directing Commerce and USTR to consider their applications for membership to the ITACs, as well as a declaration that the policy is unconstitutional.

The government, in its motion to dismiss, argued the plaintiffs do not meet the standing requirements to challenge the advisory board policy “because they have not demonstrated that they have suffered an injury-in-fact…that they have been deprived of a ‘legally protected interest.’” The government also argued the plaintiffs failed to state a First Amendment or Equal Protection claim in their suit.

“Plaintiffs do not have a legally protected interest in ITAC membership under the First Amendment,” the government argued. “Indeed, the Constitution does not even require trade officials to listen to their views.”

The government also argued that USTR and Commerce solicit industry views, not personal views through the ITACs and “members serve in a purely representative capacity.”

The government said the advisory board policy does not violate the First Amendment’s petition clause because “it does not impair any of the numerous channels of communication outside of the ITAC structure that plaintiffs may use to express the views of those they represent to the government.” In other words, the government argued that lobbyists can participate in public and stakeholder meetings hosted by trade officials, in written submissions, in trade “road shows,” and other private sector events that trade officials attend.

The government charged that the complaint is silent on any alleged economic injury or “concrete injury” to plaintiffs’ employment or future prospects as lobbyists as a result of being excluded from the ITACs.

Erik Autor, vice president and international trade counsel at the NRF; Stephen Lamar, executive vice president of the AAFA; Nathanael E. Herman, director of government relations at the Travel Goods Association; Cass Johnson, president of NCTO; William Reinsch, president of the National Foreign Trade Council, and Andrew Zamoyski, who formerly represented the Society of Chemical Manufacturers & Affiliates, filed the suit against acting Secretary of Commerce Rebecca Blank and USTR Ron Kirk in U.S. District Court in the District of Columbia in early September.

Plaintiffs are seeking an injunction directing Commerce and USTR to consider their applications for membership to the ITACs, as well as a declaration that the policy is unconstitutional.

Attorneys for the plaintiffs argued in the lawsuit that the Supreme Court has “made repeatedly clear that lobbying is a quintessential example of the exercise of the rights to petition that is protected expressly by the First Amendment. Whichever level of scrutiny is applied, the policy prohibiting registered lobbyists from serving on ITACs violates the First Amendment, both because the burden on constitutionally protected activity is not justified by sufficiently weighty government interest and because the ‘fit’ between the challenged policy and the asserted interest does not satisfy the constitutional standards.”

“This exclusion cannot be justified by the government’s stated goal of limiting the influence of ‘major special interests’ because the Trade Act established ITACs so that the DOC and USTR could better promote U.S. industries by seeking the advice of businesses that have an economic interest in U.S. trade policy,” the complaint said. “Plaintiffs’ lobbying activities on behalf of these industries are consistent with — and, indeed, supportive of — the statutory purpose of ITACs.”

The lawsuit alleges that DOC and USTR “lack a legitimate basis to deny ITAC membership to plaintiffs for exercising their First Amendment rights.”

The lawsuit stems from a policy directive handed down by the White House and President Obama in September 2009, informing federal agencies to bar federally registered lobbyists from serving on agency advisory boards and commissions. That move made it more difficult for the fashion industry’s cadre of lobbyists to influence the government’s trade policy and forced retailers and apparel brands, as well as the industry’s trade associations, to rethink their lobbying strategies with federal governmental agencies.

President Obama pledged during the presidential campaign in 2008 and his first days in office to “clean up” Washington by reducing the influence of big-money special interest groups in shaping policies that affect the entire country.

“The President recognizes that some lobbyists advocate for public interest goals shared by this administration,” Norm Eisen, special counsel to the President for ethics and government reform, said in the White House directive in 2009. “Nevertheless, the President made a commitment to the American people to reduce the influence of lobbyists in Washington out of a belief that lobbyists have too often in the past achieved disproportionate impact on government decision-makers.”

USTR shares jurisdiction with the Commerce Department over 16 industry trade advisory committees. The Obama administration’s policy left company executives, academics and other nonregistered experts to serve on the advisory committees.

A percentage of the textile and apparel ITAC 13, which has 34 members, were removed when the guidelines were enforced. The advisory committee now includes executives from companies such as Jockey International Inc., Mount Vernon Mills Inc., PVH Corp., Levi Strauss & Co. and American Eagle Outfitters Inc. Some members of trade associations still sit on the ITACs, but they are not registered lobbyists.

“A number of people were kicked off the ITAC who believe that was an illegal action by the U.S. government in denying our right to represent our industry and also inhibiting or hurting our ability to represent our industry’s views in Washington,” said Johnson of NCTO. “It goes back to the fact that simply because we represent our industry before Congress [under current law, an individual that spends 20 percent of his-her time engaging Congress on policy issues must register as a lobbyist] does not mean we should be barred from representing our industry before the government.”

NCTO still has a nonregistered representative on ITAC 13, but Johnson said the lawsuit challenges the First Amendment rights of him as an individual and the other plaintiffs.

“I have been the main adviser from the industry to the administration for the past 10 years and now that experience and knowledge base is no longer available directly to the government, all because I meet with members of Congress about textile issues,” Johnson said. “That does not make sense and it is ludicrous. Our industry is equally impacted by the administration and by the things the government does and the things Congress does.”

He added that big corporations can hire a new person to sit on the ITACs that is not a federally registered lobbyist, but small and medium-size companies and associations are put at a disadvantage because it is costly to hire someone or assign a new person.

The case has been assigned to District Court Judge Amy Berman Jackson. The plaintiffs have until Jan. 25 to reply to the government’s motion.