Minimum Competence

This Day in Legal History: Reichstag Fire Decree

On February 28, 1933, German President Paul von Hindenburg issued the Reichstag Fire Decree, formally known as the Presidential Decree for the Protection of People and State. The decree was a direct response to the Reichstag fire the night before, which the Nazi Party blamed on Communists. It suspended key civil liberties, including freedom of speech, press, assembly, and protection from unlawful detention. The decree also allowed warrantless arrests and indefinite imprisonment of political opponents.

Using this power, the Nazis swiftly arrested thousands of Communists, Socialists, and other adversaries. The decree marked the legal foundation of Nazi repression and paved the way for the Enabling Act, passed on March 23, which granted Hitler dictatorial powers. By July 14, 1933, the Nazis had criminalized all political opposition, establishing a one-party state. The decree remained technically in effect throughout Nazi rule, providing a legal cover for widespread persecution. It exemplified how emergency powers, once enacted, can be used to erode democracy rather than protect it.

KPMG has received approval to practice law in Arizona, making it the first Big Four accounting firm to do so in the U.S. However, due to legal prohibitions, the firm cannot offer legal services to its audit clients, limiting its potential customer base. Despite this restriction, KPMG expects to attract many new clients rather than shedding existing ones. The Arizona Supreme Court’s approval aligns with its goal of increasing access to legal services, but it also introduces a well-funded competitor to traditional law firms. Other Big Four firms like Deloitte, PwC, and EY may eventually follow suit.

While U.S. regulations bar auditors from providing legal services to public company clients, Arizona’s decision opens opportunities in the non-audit market. KPMG plans to focus on services complementing traditional legal work, such as contract management and supply chain restructuring. The firm must maintain an internal compliance program, overseen by attorney David Rizzo, and submit biannual reports to the state. With consulting already a major revenue stream, KPMG sees legal services as a way to expand further, particularly through technological advancements like AI.

KPMG Must Pivot Around Audit Clients in Creating US Law Practice

The Trump administration's Consumer Financial Protection Bureau (CFPB) has dropped five enforcement cases against financial institutions, including a major lawsuit against Capital One over $2 billion in alleged illegal interest charges. Other dismissed cases involved student loan servicer PHEAA, Vanderbilt Mortgage, Rocket Homes, and Heights Finance, all of which had been accused of various predatory lending and mortgage fraud practices. The move significantly weakens the agency’s legal actions against financial firms investigated for consumer abuse.

The mass dismissals coincide with Trump’s broader effort to dismantle the CFPB, an agency he has long opposed. His nominee for CFPB director, Jonathan McKernan, testified before the Senate, promising to enforce consumer protection laws but criticizing past enforcement as excessive. Meanwhile, Trump's administration has fired CFPB staff, shut down its Washington offices, and attempted to cancel its lease, though legal challenges have temporarily halted further layoffs.

Consumer advocates, including Public Citizen and the Consumer Federation of America, condemned the dismissals, warning they encourage financial misconduct. The CFPB now has fewer than 20 active cases, with several likely to be paused under new leadership. While McKernan claims he will follow the law, critics fear a watered-down agency unable to protect consumers from financial abuses.

Trump admin drops 5 consumer watchdog cases, including Capital One | Reuters

A federal judge has ordered the Department of Government Efficiency (DGE) to provide a representative for a deposition regarding its authority, structure, and operations. The ruling by U.S. District Judge John Bates also requires the Trump administration to produce documents and answer questions in a lawsuit brought by labor unions and nonprofits. The plaintiffs seek to block DGE’s access to systems at three federal agencies, citing concerns over transparency and legality.

The Justice Department opposed the order, but Bates ruled that critical details about DGE remain unclear. While he allowed questioning on DGE’s access to personal data, he limited inquiries into trade secrets or other confidential business records. The judge also set an eight-hour cap on questioning representatives from DGE and the agencies.

Bates previously denied an immediate restraining order blocking DGE’s access, stating the plaintiffs had not yet proven legal violations. Meanwhile, the White House recently disclosed that Elon Musk is not the actual administrator of DGE, contradicting earlier claims by Trump. Other lawsuits challenging DGE’s legality and access to government records remain ongoing.

Judge Orders Musk’s DOGE, Agency Staff to Testify in Lawsuit

A federal judge in California has temporarily blocked the Trump administration from ordering mass firings of probationary federal employees at agencies like the Department of Defense and National Oceanic and Atmospheric Administration (NOAA). U.S. District Judge William Alsup ruled that the Office of Personnel Management (OPM)lacks the authority to direct agencies to fire workers, contradicting administration claims that it was merely issuing guidance.

Trump, backed by Elon Musk’s Department of Government Efficiency, has sought to slash federal jobs as part of a broader plan to cut $1 trillion from the national budget. The layoffs have drawn opposition from Democrats, unions, and government employees, who argue they are illegal and threaten essential government functions, including veterans’ services, scientific research, and national parks.

While 5,400 Defense Department employees are still set to be fired, Alsup ordered OPM to rescind memos directing mass layoffs. The ruling is temporary while the legal challenge proceeds, with plaintiffs arguing OPM violated administrative law by issuing directives outside its authority. Meanwhile, Trump’s administration continues to push for deeper federal workforce cuts, with agencies required to submit reduction plans by March 13.

US judge halts Trump administration's calls for mass firings at agencies | Reuters