“According to Woody Allen, eighty percent of life is just showing up,” but for the National Labor Relations Board (NRLB), according to Judge James Boasberg, one hundred percent of its quorum is needed to vote. Chamber of Commerce v. NLRB. On that basis, Judge Boasberg struck down the NLRB’s Representation–Case Procedures rule based on the Supreme Court’s decision in New Process Steel v. NLRB almost two years ago. The politically sensitive NLRB may now be hamstrung until a cooperative quorum can be appointed, but that is the law and the NLRB must follow the law. Continue Reading
Monday Morning Regulatory Review – 5/14/12
Posted in Executive - OMB Review, Judicial Review & RemediesRegulations:
Petroleum Refineries: The Office of Management and Budget (OMB) completed review of the Environmental Protection Agency (EPA)’s economically significant final rule to complete the Petroleum Refineries – New Source Performance Standards (NSPS)–Subparts J and Ja interim final rule. EPA has previously promulgated new source standards for refineries, then granted reconsideration of, and stayed, specific issues. This final rule may address all of the issues presented by the petitions, but unless the final rule comports with the petitions, and even if it does, expect litigation.
Independent Benefit / Cost Analysis Advice: The Commodity Futures Trading Commission (CFTC) will seek assistance from the OMB Office of Information and Regulatory Affairs (OIRA) on benefit / cost analysis for its rulemakings, according to the Wall Street Journal. The independent agency’s move comes amid litigation against the CFTC questioning the quality of their statutory consideration of economic effects of regulations.
Litigation:
Deference to Agency Briefs – Never Mind: The United States Court of Appeals for the Seventh Circuit found that pharmaceutical sales representatives fell under the unambiguous administrative exception to the Department of Labor (DOL)’s Fair Labor Standards Act (FLSA) regulations in Schaefer-LaRose v. Eli Lilly & Co., avoiding the Christopher v. SmithKline Beecham deference-to-agency-amicus-briefs fray argued and pending decision before the Supreme Court and resolving an interdistrict conflict. The court addressed the issue of considering DOL’s amicus briefs (on the outside sales representative exception to overtime) only as a fact of filing below, minor discussion of DOL’s argument, and a passing disposition (fn. 20), finding its task to be simply the application of an unambiguous regulation (on the administrative exception) to the particular facts. The Seventh Circuit decision, and the labor law issues distinct from the administrative law issues in Christopher, caught the attention in The Wage and Hour Litigation Blog, Wage & Hour Insights, and the Labor & Employment Law Blog.
Wild Horses & Administrative Records: The United States District Court for District of Columbia expanded the administrative record of an agency decision on judicial review when the agency was being entirely unreasonable about the documents in American Wild Horse Preservation Campaign v. Salazar. The Department of Interior (DOI), Bureau of Land Management (BLM) had adverse expert declarations from previous, related litigation on another herd management action. The expert declarations were also extensively cited and quoted in timely comments. BLM refused to consider the documents as not timely filed (two hours later), and the agency computer firewall apparently rejected the documents based on their size. The Department of Justice (DOJ) even filed a motion to strike the declarations from plaintiffs motion, but Judge Howell, rightly, I think, would have none of it, and decided the expert declarations must be part of the record on review. BLM may have been “technically correct” under administrative record doctrine, but BLM (and DOJ) were certainly not reasonable.
Obama Adds Three Requirements to Retroactive Review of Regulations
Posted in Executive - OMB Review
President Barack Obama today added three new requirements to agency development of regulations and retrospective review of regulations in a new Executive Order: The new order supplements Executive Order 13563 by –
- Telling agencies to invite public suggestions and publicly releasing retrospective analyses of regulations and supporting data;
- Prioritizing initiatives that will produce significant quantifiable monetary savings or significant quantifiable reductions in paperwork burdens (while protecting public health, welfare, safety, and our environment) – and include cumulative effect of regulations; and
- Report to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA) bi-annually.
Rule-Related Limits in Appropriations: A Viable Congressional Review Act
Posted in Constitutional Issues in Regulations, LegislationIlyse Schuman recently reported in the Employment Law Update that the House Appropriations Committee had approved FY2013 funding, and filed a report, for the Equal Employment Opportunity Commission (EEOC). She focused on the catch that “none of the funds made available in this Act” can be used to implement the EEOC’s Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act rules.
A second House Appropriations Committee bill and report would bar using FY2013 funds to “develop, adopt, implement, administer, or enforce a change or supplement to” the Army Corps of Engineers’ rules or guidance on the definition of waters under the jurisdiction of the Federal Water Pollution Control Act. The provision, if enacted, would freeze the regulations and guidance for FY2013 in light of Sackett v. EPA.
Limitations on an agency’s use of appropriation bills to limit rulemaking are more common than most realize and touch upon the delegation doctrine under the U.S. Constitution, so a short review is in order. Continue Reading
Monday Morning Regulatory Review – 5/7/12
Posted in Executive - OMB Review, Regulatory ProcessRegulations: In candor, but with no surprise, the National Labor Relations Board (NLRB) published a notice delaying the effective date of its Posting Rule, which required “posting” of the NLRB-generated notice of employee rights and specifying that failure to do so was an unfair labor practice, “until further notice.” The United States Court of Appeals for the District of Columbia Circuit enjoined the rule pending resolution of litigation over the Board’s authority to promulgate the rule, and over enforcement provisions of the rule. As previously discussed, the United States District Court for the District of Columbia found that the enforcement provisions of the rule exceeded the NLRB’s authority, while the United States District Court for the District of South Carolina found that the entire rule exceeded the NLRB’s authority. The NLRB should at least be commended for being candid and posting a notice in the Federal Register.
Extended Review: An unfortunate anniversary may occur this week, not because of substance, but just because of time. The Environmental Protection Agency’s (EPA) Chemicals of Concern List proposed rule will turn 2 years old – 2 years pending in OMB review – on May 12, 2012. The proposed rule would add several chemicals – including bisphenol A, or BPA; a chemical in drinking bottles and other packaging – to a list of chemical substances under the Toxic Substances Control Act (TSCA) that EPA would find presents or may present an unreasonable risk of injury to human health or the environment. BPA, in particular, has been the subject of a range of administrative actions, including petitions for rulemaking. The Food and Drug Administration (FDA), for example, denied a Natural Resources Defense Council (NRDC) petition on March 30, 2012 (after NRDC sued), as reported in the Food Liability Law Blog and the media. Although EPA has believed its proposed rule is not economically significant, some issues seem to be holding up the Administration’s decision on TSCA application.
Balancing: OMB held the line on its docket of pending reviews (164) – completing review on slightly fewer regulations than it received.
- EPA sent OMB the economically significant Formaldehyde Emissions Standards for Composite Wood Products proposed rule and the legal / policy significant Portland Cement Manufacturing NESHAP and NSPS — Proposed Amendments as a Result of Reconsideration (read: “litigation”) proposed rule.
- OMB completed review of the Department of Transportation (DOT) National Highway Traffic Safety Administration’s economically significant Electronic Stability Control Systems for Heavy Vehicles proposed rule after extended review.
Guns, Ammo, Conflicting Agency Views & the Importance of OMB Review
Posted in Executive - OMB Review
This morning’s Wall Street Journal highlights an often overlooked, critical, confusing, and somewhat misnomered regulatory function: Office of Management and Budget (OMB) review. Adam Entous and Evan Perez write that “U.S. homeland-security and law-enforcement agencies have objected to Obama administration proposals to relax export restrictions on high-powered firearms, threatening a centerpiece of the president’s trade and national-security agenda.” They really mean that a normal step in the regulatory development process is working, but has become a public topic of discussion. Continue Reading
President Obama’s International Regulatory Harmonization Initiative – An Opinion
Posted in Executive - OMB ReviewPresident Obama (aka POTUS) issued an Executive Order, Promoting International Regulatory Cooperation, on May 1, 2012, that increases the visibility of agencies’ interest in international regulatory harmonization, but does it really do more than reiterate platitudes? A careful review suggest that it reiterates many of the normative functions of the regulatory review process and, perhaps, adds new routes for input and reality. On the whole, however, requiring agencies and OMB to think through the international impacts of regulation is a welcome, if small, addition.
Monday Morning Regulatory Review – 4/30/12
Posted in Executive - OMB Review, Judicial Review & Remedies, Legislation, Regulatory Flexibility & Small BusinessRegulations: The Office of Management and Budget (OMB) began review on three more Small Business Administration (SBA) planned system of adjustments to the Small Business Size Standards, which generally increase the scope of regulatory flexibility analyses and the pool of businesses that are eligible for small business contracts. OMB completed review of SBA final rules on the information classification, and Administrative and Support, Waste Management and Remediation Services, and an SBA proposed rule on size standards for Mining, Quarrying, and Oil and Gas Extraction.
OMB also completed review of economically significant rules for the Department of Education’s (DOEd) Pell Grant Program, and the Department of Health and Human Services’ (HHS) (1) Home and Community-Based State Plan Services Program and Provider Payment Reassignments, and (2) Community First Choice Option.
Legislation:
The Senate failed to approve S.J. Res. 36, a resolution of disapproval of the National Labor Relations Board Representation – Case Proceedings on Tuesday, April 24. As discussed last week, litigation is still pending, but there will be no legislative intervention (POTUS had threatened to veto a resolution in any event).
After the hearing the Securities and Exchange Commission’s (SEC) aversion to regulatory analysis reported here, the Financial Services Committee filed a report on April 25, 2012, recommending (to the Committee of the Whole House), H.R. 2308, to improve the consideration by the Securities and Exchange Commission of the costs and benefits of its regulations and orders, with an amendment (H. Rept. 112–453).
Litigation:
The United States District Court for the District of Columbia will hear cross motions to dismiss / summary judgment in National Restaurant Association [NRA] v. Solis, D.D.C. No. 11-cv-1116, on whether the Department of Labor (DOL) gave the public adequate notice and an opportunity to comment in its 2008 proposed rule of notice requirements to employees that tips would be offset against minimum wage requirements that were ultimately contained in the 2011 final rule. NRA claims that the 2011 final rule is a significant revision of (and detrimentally unnoticed increase in) the level of information that employers are required to provide to tipped employees, which itself is a reversal of DOL’s position from adhering to prior court decisions (2008) to rejecting those decisions (2011). (Note also the change in Administration between proposed and final rule).
This may be a close “logical outgrowth” case, but the change and rationale (to the extent it exists, is rather dramatic. Plaintiffs also raise a significant Regulatory Flexibility Act (RFA) claim that DOL improperly certified that the rule would not have a significant impact on a substantial number of small entities. Fortunately, plaintiffs appear to have dropped some of their more problematic contentions about executive management, which can only be raised in a much more intricate Administrative Procedure Act (APA) claim.
Short version this week because I’m on travel.
Labor Enjoined from Regulating Temporary Worker Visas: No Statutory Delegated Authority
Posted in Judicial Process, Judicial Review & RemediesThe United States District Court for the Northern District of Florida has preliminarily enjoined the Department of Labor (DOL) from enforcing its Temporary Non-Agricultural Employment of H–2B Aliens in the United States rule published last February and that was scheduled to become effective today. Bayou Lawn & Landscape Services v. Solis, N.D. Fla. No. 3:12-cv-00183-rv-CJK. The rule purported to amend the temporary non-agricultural worker program regulations, but is now on hold until the court completes adjudication of the plaintiffs’ claims.
Home Concrete: Supreme Court Not Rethinking Changing Regulations II
Posted in Judicial Review & Remedies
The Supreme Court of the United States today decided United States v. Home Concrete & Supply, LLC, in a narrow 5-4 ruling that:
- a provision of the Internal Revenue Code of 1939, interpreted in the Supreme Court’s decision in Colony, Inc. v. Commissioner, 357 U. S. 28 (1958), was not changed by amendments to the Internal Revenue Code containing “materially indistinguishable language,”
- the statute is not ambiguous, and
- therefore, the Court need not consider the implication of changing Internal Revenue Regulations because the regulations were not due deference in the first place in light of the unambiguous language of the statute.
Justice Breyer wrote for the Court to the point that the statute was unambiguous, which was sufficient to decide the case with Justice Scalia concurring up to the point that the Court found the statute unambiguous and concurring in the judgment.
Justices Breyer and Scalia continue their debate over deference to regulations – with Justice Scalia continuing his stance that once a statute is found to be unambiguous, it “should be the end of the matter” and joining no discussion of regulatory process.
Justice Kennedy, for a minority of four Justices, considered the statute to be ambiguous and would have deferred to the interpretation in IRS regulations, as amended.