Hunton & Williams fires up lobbying practice

The U.S. Supreme Court’s decision last April that the Environmental Protection Agency (EPA) could regulate greenhouse gases under the Clean Air Act was a loss for Hunton & Williams’s legal team, which had argued the opposite.

But the firm’s partners could take solace in one thing: The ruling seemed to validate their decision to build up a lobbying practice that could take a case from the court to Capitol Hill.

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Hunton, which was founded in Richmond in 1901 and now operates in 19 offices around the globe, has long had a well-regarded legal practice focusing on energy and environmental issues. It took on its first electric utility as a client in 1904.

In Massachusetts v. EPA, Hunton argued that Congress did not intend to give the EPA powers to regulate carbon dioxide when it wrote the Clean Air Act. The court rejected that argument, ruling that EPA could regulate emissions from motor vehicles. It also required the agency to review its decision not to regulate other greenhouse gases as pollutants.

Not long ago, Hunton’s role in such a critical fight may have ended there, handing off responsibility to outside firms to argue on their clients’ behalf before Congress.

But by the time the court announced its ruling, the firm had built up a team of energy lobbyists who could field questions from clients and congressional staff about the decision’s implications — and work to minimize the potential damage to their clients through legislation.

“Suddenly, all of us were busy for the next two months,” said Mark Menezes, a former Republican counsel to the House Energy and Commerce Committee.

Hunton & Williams is one of several large legal firms in town with a lobbying shop. But as it built its government-relations team, Hunton never strayed far from its legal roots, in part because of the steep learning curve surrounding issues like clean air and emissions and energy production.

It has, for example, lured away four former Republican counsels on the Energy and Commerce Committee, a key congressional oversight panel for many regulated industries.

“Over time, we came to the realization that, while professional lobbyists were adept at securing access for our clients, they lacked the legal expertise necessary to assist policymakers in addressing complex issues,” said Walfrido Martinez, a managing director at Hunton.

“Often, there’s no bright line separating a public policy issue from a legal issue,” he said. Menezes, for example, helped review the legal brief submitted to the court.

“You wouldn’t have that opportunity in a lobbying shop,” he said.

Hunton hasn’t cracked the top 25 earners on K Street yet, but revenues have more than tripled since the firm decided to focus its lobbying efforts around energy and environmental issues.

The firm earned around $1.6 million in 2002 from its lobbying practice, which principally handled healthcare policy. The following year, Hunton lured Joseph Stanko away from his post as lead counsel to the Energy and Commerce panel. He now runs Hunton’s government-relations practice.

Last year, revenues had risen to just under $6 million, the bulk of which came from energy-producing clients like Southern Company, Koch Industries, American Electric Power (AEP), Duke Energy and ConocoPhillips.

Hunton lawyers argued on behalf of Conoco last year that the company should be eligible for a $1-a-gallon tax credit for producing renewable diesel by adding animal fats to its traditional refining process. The IRS agreed.

The firm’s lobbyists are now working to protect that credit against efforts in Congress to limit its application to biodiesel plants, which use a different process.

Global warming legislation presents more significant challenges to Hunton’s clients. Several have said they support a national cap on greenhouse gases, despite their reliance on fossil fuels. But businesses hate multiple regulatory masters nearly as much as they hate taxes.

Hunton’s lobbying team has stressed on Capitol Hill the importance of having a single set of rules companies could follow.

“If Congress enacts climate-change legislation, there are a number of secondary issues that must be addressed. How do you deal with state programs? How do you deal with programs at the federal level that may be duplicative?” asked Stanko.

Hunton’s argument that federal climate-change rules should supercede state programs found its way into an early version of an energy bill crafted by House Energy and Commerce Chairman John Dingell (D-Mich.) and Energy and Air Quality subcommittee Chairman Rick Boucher (D-Va.).

But a dozen committee Democrats revolted, insisting that California and other states must maintain their right to regulate greenhouse gas emissions from tailpipes and other sources. The offending language was ultimately dropped, although it could resurface in a broader climate bill this fall.

The issue underscores the regional, rather than partisan, nature of energy issues. That in turn may explain why Hunton’s energy lobbying practice continues to grow even though it tilts Republican.
Two other former House Energy and Commerce Committee Republican counsels, Fred Eames and Sean Cunningham, joined the firm two years ago. The team also includes Bert Pena, who is a former Democratic counsel and chief of staff for the House Agriculture Committee, and former Rep. John Rhodes (R-Ariz.). The others have mainly legal backgrounds.

Stanko, Menezes, Eames, and Cunningham reject the suggestion that the four present a government-in-exile posture to the firm, and say the practice is as busy as ever. Menezes worked for former Democratic Sens. Fritz Hollings (D-S.C.) and John Breaux (D-La.), before helping then-Energy and Commerce Chairman Rep. Joe Barton (R-Texas) craft the Energy Policy Act of 2005.

“We rely on our reputation as lawyers, which doesn’t necessarily transcend party lines, but if you look at every major piece of energy legislation or environmental legislation, they were, at the end of the day, bipartisan products,” Stanko said. “It’s an issue practice.”

Added Eames: “If someone comes through the door, regardless of the party they are from, if you know they are credible and will deal straight with you … you are going to work with them.”

“We’re lawyers. We work with words, and words matter a lot at several levels in the process,” Cunningham said.