Noted conservative lawyer C. Boyden Gray has been fighting against the Dodd-Frank Wall Street Reform and Consumer Protection Act almost from the moment it was enacted in July 2010. But his fight against the principles enshrined in the law goes back nearly two decades.
In 1996 Gray, then a partner at Wilmer Cutler Pickering Hale and Dorr, marshaled opposition to several Environmental Protection Agency regulations relating to the Clean Air Act. Arguing that the CAA violated the nondelegation doctrine, which forbids one branch of government from ceding its authority to another, Gray believed the law was unconstitutional because it gave the EPA too much discretion and power. He cochaired the Air Quality Standards Coalition, an advocacy group representing hundreds of businesses—including oil and automotive companies—that was dedicated to getting the EPA regulations invalidated. During the legal challenge to the EPA rules, he wrote an amicus brief encouraging the U.S. Supreme Court to take a broad view of the nondelegation doctrine. His efforts, however, came up short when the Supreme Court ruled the act was ­constitutional.
Today, Gray is applying that same legal strategy in challenging Dodd-Frank. Since the law was enacted, he has testified before the U.S. House of Representatives and the Senate multiple times, given dozens of speeches, and written several op-eds calling the act unconstitutional and damaging to small banks. In June, alongside cocounsel Gregory Jacob of O’Melveny & Myers, Gray filed suit on behalf of lead plaintiff State National Bank of Big Spring, Texas, asking the U.S. district court in Washington, D.C., to invalidate three major sections of the law.
In February, Gray’s suit got additional firepower when it was joined by attorneys general from Alabama, Georgia, Kansas, Montana, Nebraska, Ohio, Texas, and West Virginia. (Three other states, Oklahoma, Michigan, and South Carolina, joined in September.)
Gray and the AGs are challenging several major prongs of the law. They assert that the Consumer Finance Protection Bureau violates the nondelegation doctrine because it has near-unlimited powers and is not subject to congressional oversight. They also challenge the constitutionality of an interagency council that designates certain banks to be "systemically important," resulting in an unfair advantage, as well as a provision granting the Federal Deposit Insurance Corporation expanded powers to take over financial companies and liquidate them.
A former White House counsel to George H.W. Bush who runs his own Washington, D.C., law firm, C. Boyden Gray and Associates, Gray sits on the board of the Federalist Society, and serves as cochairman of FreedomWorks, a Tea Party group founded by former House majority leader Richard Armey. And although the 11 state AGs who joined the suit are all Republicans, Gray is adamant that this is not a partisan issue. "This is about the unconstitutional violation of separation of powers," says Gray. "This law is worse than anything I’ve ever seen."Hogan Lovells partner Daniel Meade, who helped draft the Dodd-Frank Act while working for the House Committee on Financial Services, disputes Gray’s assertions. "I think that most if not all of it would pass constitutional muster," says Meade. If the State National Bank case makes it to the Supreme Court, we’ll find out.