The surge in lawsuits seeking nationwide relief from government regulation has brought the issue of nationwide injunctions to the forefront, especially in politically charged cases like those challenging vaccine mandates. During President Barack Obama’s tenure, there were 12 such lawsuits, but this number escalated to an unprecedented 64 during President Donald Trump’s administration. As of midway through President Joe Biden’s first term, courts had issued 14 nationwide injunctions, according to the Harvard Law Review.
Nationwide injunctions, or universal injunctions, prevent a government agency from enforcing rules against anyone across the country. This broad applicability has spurred a debate about their value, particularly in the business context, a perspective often missing from public discourse. For businesses, these injunctions can provide uniformly applied regulations, reducing uncertainty and fostering a fair competitive environment.
Criticisms abound. Supreme Court justices and other legal scholars argue that nationwide injunctions can constitute an overreach of judicial power and lead to the politicization and delegitimization of the courts. Justice Neil Gorsuch highlighted this concern during oral arguments in FDA v. Alliance for Hippocratic Medicine, questioning whether a small group opposing the FDA’s approval of a drug could lawfully enjoin the decision nationwide.
Moreover, judge shopping has emerged as another point of contention. The case of Alliance for Hippocratic Medicine was filed in a jurisdiction known for its anti-abortion stance, resulting in a nationwide injunction that matched the plaintiffs’ objectives. In response, the US Judicial Conference adopted a policy aimed at preventing judge shopping by requiring random case assignments within a judicial district.
On the other side, the judiciary’s checks on regulatory overreach highlight the benefits of nationwide injunctions for businesses. For instance, a 2023 Consumer Financial Protection Bureau (CFPB) rule expanding data collection for small business loans was challenged, leading to a preliminary injunction by the US District Court for the Southern District of Texas. Initially confined to the plaintiffs, the injunction was later expanded nationwide, preventing uneven regulatory application and achieving uniformity in compliance obligations.
Similarly, the Federal Trade Commission (FTC) faced a nationwide injunction against its ban on employment noncompete agreements. Initially limited to the plaintiffs, the relief was extended nationwide by the US District Court for the Northern District of Texas, ensuring consistent regulatory requirements for employers nationwide.
These cases illustrate that nationwide injunctions can provide significant benefits to businesses by establishing uniformity and predictability, thus fostering a level playing field. Hence, incorporating the value of these injunctions into the broader debate is crucial, as they can play a vital role in maintaining fairness and stability in the regulatory environment.
For further reading, the full analysis by Caroline Wolverton and Arielle Amegashie can be found on Bloomberg Law.