Akin Gump Attorneys Discuss 2014’s Big Matters with Law360

Law360, as part of its “Cases To Watch In 2014” series, interviewed several Akin Gump attorneys to get their views on significant upcoming matters in their respective area of practice.

Regarding class action lawsuits, Akin Gump appellate practice head Rex Heinke discussed Halliburton Co.  v. Erica P. John Fund, which involves the “fraud-on-the-market” theory and its development since the 1988 Basic v. Levinson decision that established it, particularly the notion that an investor is presumed to have relied on a public company’s misrepresentation in purchasing a security.

Heinke believes that the case raises two questions for the Court: Should the fraud-on-the-market rule stand and allow a presumption of reliance? And assuming there is a presumption, can a defendant prevent certification by introducing evidence that its alleged representations didn’t affect the price of a stock?  Law360 notes that he expects the Court “to draw a line of how far the parties can get into the merits of a case before certifying a class.”

In “International Trade Developments To Watch In 2014,” Law360 spoke to partner Thomas McCarthy on reforms to U.S. export controls, including removal of certain items from the U.S. munitions list.  McCarthy believes that the changes may, in the long run, make life easier for companies navigating the U.S.’s export control regime.  However, in the short term, these companies will need to adjust their compliance programs to adapt to these changes.

He noted that, because reforms are advancing by category, different industries will need to make these adjustments at different times: “If you're in the aerospace sector, you've already been hit hard. [But] this is all coming onto the shores of the other industries.”

For “Energy Cases To Watch In 2014,” litigation partner Brian Antweil discussed proposed class actions filed by landowners in North Dakota against 10 oil and gas companies, claiming millions of dollars in lost royalties for flared natural gas, that is, gas that is burned off by companies due to cost considerations and infrastructure constraints.  He said, “It's going to be an interesting thing to see how courts deal with flaring gas because you're trying to produce but are stymied because the gas isn't economical. This notion of waste ... everyone wants to tie up properties and drill wells, but the market isn't there for gas right now.”

For its look at upcoming energy regulation and legislation, Law360 spoke with Julia Sullivan, who co-heads Akin Gump’s energy regulation, markets and enforcement practice, on legislation making its way through the U.S. Congress designed to allow renewable energy projects to be structured as master limited partnerships, an option currently limited to oil, gas and coal projects.  Sullivan noted of this movement, “That'll be important, especially if the [production tax credit] isn't renewed. It's not the same as the PTC, but it does create some tax incentives. It's something Congress can do to boost the industry."

Global project finance practice co-head Ed Zaelke was quoted in Law360’s look at project finance in the upcoming year.  Looking at the challenges to projects in the United States, he noted that states and municipalities are working with depleted budgets that can’t keep pace with the demand to maintain and expand transportation and energy projects: “The cost of capital continues to be critical to all these projects. Whereas in the past, we saw the banks taking a large percent of debt themselves, we're seeing more and more that borrowers are accessing the bond markets for long term debts.” 

Looking at global challenges, he noted that Asia remains hard to get into for foreign developers, particularly in the area of renewable energy.  Discussing the growing need for law firms to go international, Zaelke said, “There's pressure to be able to serve clients in foreign markets. It may be offices, it may be alliances. We just have to recognize that we have clients who are moving domestic activities overseas.”