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The Morning Risk Report: Justice Department Makes Abrupt Reversal on Law Firm Sanctions
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By David Smagalla | Dow Jones Risk Journal
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Good morning. The Justice Department told a court Tuesday that it plans to press forward with the defense of President Trump’s executive orders sanctioning law firms, a remarkable reversal coming less than 24 hours after it asked to drop the cases.
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Latest move: The department said in a court filing that the federal appeals court in Washington hadn’t yet ruled on its request the previous day to dismiss the cases—and that it was the administration’s prerogative to pursue the appeals after all.
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Changing approach: On Monday evening, the department had said it was dropping its appeal of four trial-court rulings that struck down Trump’s sanctions against law firms Jenner & Block, WilmerHale, Perkins Coie and Susman Godfrey.
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Palace intrigue? The abrupt change of heart by the DOJ was highly unusual and indicated “some level of palace intrigue,” said Dennis Fan, an associate professor at Columbia Law School. “The lawyers would almost never, and certainly never in a high-publicity case like this, tell the court they were withdrawing unless they felt that they had the clear go-ahead.”
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Background: Last year, Trump issued a series of executive orders against several law firms and individual lawyers, threatening to strip them of their security clearances and access to federal buildings, and directing federal agencies to end any government contracts with the firms or their clients. The law firms said the orders would be devastating to their businesses. Judges across the ideological spectrum had ruled that the president’s attempts to punish law firms amounted to unconstitutional retaliation.
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Content from our sponsor: Deloitte
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Family Businesses Face High-Frequency Cyber Threat Environment
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For family-controlled businesses, cyberattacks threaten more than revenue—they risk the family name, stakeholder relationships, and legacies carefully built over generations. Read More
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The U.S. and Israel launched an airstrike on Tehran on Saturday. Photo: Atta Kenare/AFP/Getty Images
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U.S. strikes on Iran reflect a go-it-alone approach to the world.
Before the U.S. invaded Iraq in 2003, the Bush administration spent more than a year publicly making the case for war and trying to win U.N. approval. When that failed, it cajoled and persuaded many of its allies to join in a coalition of the willing.
When President Trump launched the U.S.’s biggest military operation in the Middle East since then—a massive air campaign against Iran alongside one partner, Israel—the U.S. only informed some of its European allies moments before attacking. Some never got a call.
Sea change: The shift in approach reflects not just the different nature of this conflict—an air war versus a ground invasion—but also an American president with very different views from his predecessors on how the U.S. should exercise its power on the global stage and whether it should care what other nations think, even friendly ones.
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A ‘fight about vibes’ drove the Pentagon’s breakup with Anthropic.
In his first face-to-face meeting with Defense Secretary Pete Hegseth, Anthropic Chief Executive Dario Amodei made his case about the risks of AI-controlled autonomous weapons. Hegseth didn’t want to hear it, even from a CEO whose company developed AI tools that have become instrumental for the military.
“No CEO is going to tell our war fighters what they can and cannot do,” Hegseth said after cutting off Amodei midsentence in the meeting on Feb. 24, according to people familiar with the matter.
The rupture between the two men, with sharply contrasting personalities and worldviews, was never resolved. And now the Trump administration, which has championed the speedy rollout of AI as essential to economic growth and national security, finds itself at loggerheads with a homegrown giant of the industry.
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Block founder Jack Dorsey last week announced plans to slash 40% of the workforce at the company, citing rapidly improving artificial-intelligence models as the primary reason. But not everyone is buying it.
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President Donald Trump said Tuesday that the U.S. is considering terminating all trade with Spain and that the Supreme Court’s decision last month that struck down some of his tariffs gave him latitude to use other tools, like licenses.
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China is building new submarines with firepower that can strike more of the U.S. mainland from waters closer to its own shores.
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Target’s new chief executive, Michael Fiddelke, was ready to reveal his $6 billion plan to pull the retailer out of its prolonged funk. But first, Fiddelke and a string of his top executives shared a blunt self-critique: We lost our way, they admitted, but we have a plan to fix the business.
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Michael Selig, now head of the Commodity Futures Trading Commission, being sworn in for the role. Photo: Andrew Harnik/Getty Images
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CFTC head says prediction markets fight disinformation.
Prediction markets are a helpful tool to fight disinformation, Commodity Futures Trading Commission head Michael Selig said, defending federal control over the platforms amid concerns about insider trading and possible intrusion into state jurisdiction.
Selig said the platforms, which allow bets on elections, sports, war and other events, have proven more accurate than pollsters, reports Risk Journal’s Richard Vanderford. “They are an important tool to have here in the United States,” Selig said Tuesday at a conference hosted by the Milken Institute, a think tank.
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Emissions planning beyond Trump tricky for U.S. companies following climate cuts.
Companies say President Trump’s climate overhaul makes it tough to frame their future emissions plans and prepare for what they see as inevitable environmental restrictions—particularly as their goals extend beyond the president’s term.
In recent annual reports delivered to investors, companies said that, despite the Trump administration’s easing of environmental rules, businesses will still need to plan to lower their emissions to meet standards in the long term.
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Kraken told The Wall Street Journal that its banking unit has won access to the Federal Reserve’s core payment systems, making it the first crypto firm to be able to move money on the same rails used by thousands of banks and credit unions.
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Goldman Sachs’s departing general counsel Kathryn Ruemmler has been asked to testify before the House Oversight Committee on her ties to Jeffrey Epstein.
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One of the most obscure courts in America is facing a rare moment in the sun because of a seemingly simple question: What should happen with more than $130 billion in tariffs that the Trump administration collected illegally?
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Democratic lawmakers are preparing legislation that would break up U.S. meatpacking companies, escalating government efforts to curb record-high beef prices.
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The U.S. sanctioned Rwanda’s military and four senior officers on Monday for supporting rebels in eastern Congo days after the countries signed a U.S.-brokered peace deal.
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Moderna will pay $950 million to settle patent litigation by Arbutus Biopharma and Genevant Sciences GmbH.
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Mexican cement company Cemex said it believes U.S. authorities are no longer pursuing a foreign bribery investigation into its construction of a plant in Colombia, Risk Journal reports.
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Russia’s central bank said Tuesday it has filed a legal challenge against the European Union’s indefinite freeze on its assets, arguing the measure violates sovereign immunity and was adopted through improper procedures.
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