A number of volatile issues made ripples in regulatory practice last week that will not be found in the general media. The saga of the religious exemption from the contraceptives mandate in Obamacare (Patient Protection and Affordable Care Act or PPACA) added an introduction to a new chapter last week when the Department of Justice (DOJ) committed the Department of Health and Human Services (HHS) and its cohorts to a plan for new regulations. Meanwhile, the Food and Drug Administration (FDA) lost a significant report and recommendations to support regulations because its appointment of the advisors was ethically flawed. Elsewhere in HHS, the Health Resources Administration (HRA) issued a new interpretive rule in the face of a district court opinion that HHS did not have the authority to adopt substantive rules. On the new regulations front, the Department of Transportation (DOT)’s Pipeline and Hazardous Materials Safety Administration (PHMSA) released an expected proposed rule for tank cars carrying higher volatility crude oil, ethanol, and other hazardous material in light of several recent wrecks, but a scoping question is brewing in their economic analysis. Continue Reading
Immediate Intercircuit Conflict: 4th Circuit Upholds IRS Obamacare Regulations Extending Tax Subsidies to Federal Exchanges
Posted in Agency Authority, Judicial Review & Remedies
On this, the same day as the D.C. Circuit decision in Halbig v. Burwell, the United States Court of Appeals for the Fourth Circuit took the opposite tack in King v. Burwell: finding that the provisions of Obamacare (Patient Protection and Affordable Care Act or PPACA), taken together, were ambiguous, and apply Chevron Step 2 deference to the agency’s interpretation, affirmed the district court decision.
For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion.
This intercircuit conflict is fairly clear and certainly affects a significant issue – increasing the likelihood (perhaps all but assuring) that the issue will soon reach the United States Supreme Court (SCOTUS). The Department of Justice (DOJ)’s Solicitor General has substantial incentive now to seek certiorari in Halbig – indeed, DOJ appears to have already signaled that it will seek some further review – and the plaintiffs in King have no reason not to pursue review by the High Court.
DC Circuit Orders Vacatur of IRS Obamacare Regulations Extending Tax Subsidies to Federal Exchanges
Posted in Agency Authority, Judicial Review & Remedies
The United States Court of Appeals for the District of Columbia Circuit today ordered vacated a critical Internal Revenue Service (IRS) regulation extending tax credits under Obamacare (Patient Protection and Affordable Care Act or PPACA) to participants in federal health care exchanges as contrary to the clear language of the statute. Halbig v. Burwell substantially reduces the application of Obamacare requirements and creates a new and devastating uncertainty within the regulatory process that the Administration must answer immediately. Continue Reading
Monday Morning Regulatory Review – 7/21/14: IRS Tax Preparer Suits; Hobby Lobby FAQ; Obamacare in the Territories; Drone Dismissal; and an Upgrade
Posted in Agency Authority, Judicial Review & Remedies, Regulatory Process
Among its woes, the Internal Revenue Service (IRS) lost another regulatory case for exceeding its statutory authority last week, and was sued yet again. In other fallout, the Department of Health and Human Services (HHS), Department of Labor (DOL), and Department of the Treasury (DOTr) released a FAQ in light of the United States Supreme Court (SCOTUS) decision in Burwell v. Hobby Lobby that raises more questions than it answers, and HHS reversed course on the application of Obamacare (the Patient Protection and Affordable Care Act or PPACA) to the United States territories. Finally, or not, the United States Court of Appeals for the District of Columbia Circuit dismissed a petition for review of a Federal Aviation Administration (FAA) email that warned of the legal hazards of using drones in violation of FAA air space control.
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Monday Morning Regulatory Review – 7/14/14: Hobby Lobby Legislation; Guidance Finality; & Minimum Wage Extension
Posted in Judicial Review & Remedies, Legislation, Regulatory Process
Each branch of government contributed a highlight to an otherwise somnambulant summertime week. Congressional members responded to the United States Supreme Court (SCOTUS) Hobby Lobby decision with new legislation that raises new questions. The United States Court of Appeals for the District of Columbia Circuit held Friday that the Environmental Protection Agency (EPA) guidance to States on granting water pollution permits for surface mining was not, in itself, sufficiently final for the purposes of judicial review, and more stringent review procedures were, in reality, procedural rules. And the Department of Labor (DOL) extended the too-short comment period for its proposed rule to increase the minimum wage that federal contractors must pay – again, too short. Continue Reading
Monday Morning Regulatory Review – 7/7/14: Hobby Lobby Realities; Open Internet, Closed FCC; and ACUS Recommendations: Preambles as Guidance & Ex Parte Contacts
Posted in Agency Authority, Judicial Process, Judicial Review & Remedies, Regulatory Flexibility & Small Business, Regulatory Process
The holiday-shortened week was highlighted by judicial and Administration reaction to the United States Supreme Court (SCOTUS) decision in Burwell v. Hobby Lobby that the Administration failed to comply with the Religious Freedom Restoration Act (RFRA) in promulgating Obamacare preventative contraceptive care exemption regulations – and the issue will return frequently as the parties and the Administration further respond. The Federal Communications Commission (FCC) finally published in the Federal Register its response to losing its “net neutrality” rule, but that response, whatever its substantive policy implications for regulated parties be, does not address the end user – the public – until now. And, catching up with Administrative Conference of the United States (ACUS), two recommendations adopted last month deserve careful consideration by the agencies, bench, and bar: use of final rule preambles as guidance documents and ex parte contacts in informal rulemaking. Continue Reading
SCOTUS: Obamacare Contraceptive Rule Failed to Accommodate Corporate Owner’s Religious Rights
Posted in Judicial Review & Remedies, Regulatory Process
The United States Supreme Court (SCOTUS) today required the Obama Administration to implement Obamacare (Patient Protection and Affordable Care Act or PPACA) and it’s regulations to permit closely held corporations to decline to purchase preventative or contraceptive health care coverage that would violate their owners’ religious beliefs in Burwell v. Hobby Lobby. SCOTUS found that the Administration failed to show that the Department of Health and Human Services (HHS) regulations were the least restrictive means for advancing the government’s interest in providing health care and therefore were inconsistent with the Religious Freedom Restoration Act (RFRA). SCOTUS did not reach any grand constitutional questions of whether Obamacare violated the United States Constitution First Amendment’s protection of freedom of religion, but answered only the technical question of the regulation’s consistency with a statute limiting the government’s reach. At bottom, the HHS implementing regulations failed to comport with the RFRA, restating a standard lesson that any regulations must be promulgated in accord with all such statutes of general applicability. Continue Reading
Monday Morning Regulatory Review – 6/30/14: Hazardous Waste Fuel; Affirmative Defenses in CAA Suits II; Waters of the United States Extension; & Drones & Model Aircraft Interpretation
Posted in Agency Authority, Judicial Review & Remedies
A very busy last week was dominated by the United States Supreme Court (SCOTUS) (near) end-of-term decisions, but some slightly less notable regulatory actions deserve attention. On Friday, the United States Court of Appeals for the District of Columbia vacated two separate exceptions to Environmental Protection Agency (EPA) Resource Conservation and Recovery Act of 1976 (RCRA) requirements that EPA establish standards applicable to all fuel derived from hazardous waste. In a curious filing last week, the Sierra Club sought to expand a D.C. Circuit opinion vacating an EPA rule to nine other regulations. And EPA extended the public comment period for the highly contentious proposed definition of “Waters of the United States.” EPA news might consume this entire Monday Morning Regulatory Review, but the Federal Aviation Administration (FAA) released guidance that will help join issue on the scope and limitations on this rapidly developing use drones, model aircraft, or “unmanned aircraft systems.” Continue Reading
SCOTUS Holds Obama Made Unconstitutional NLRB Recess Appointments – Regulations and Adjudications at Risk
Posted in Agency Authority, Constitutional Issues in Regulations
The United States Supreme Court (SCOTUS), in NLRB v. Noel Canning, today affirmed the United States Court of Appeals for the District of Columbia decision that President Obama (POTUS) unconstitutionally appointed members of the National Labor Relations Board (NLRB) as “recess appointments” when the Senate was not in recess. SCOTUS unanimously affirmed on narrower grounds than the D.C. Circuit decision, and requires POTUS to respect the Senate’s prerogative to hold pro forma sessions every three days – a longer recess is required. Much of the impact of this decision may have already been mitigated, but the potential damage to a substantial regulatory program remains – and will likely be the subject of further litigation in the lower courts. Continue Reading
SCOTUS to Review D.C. Circuit Constitutional Non-delegation Decision that Amtrak is a Railroad, Not a Regulator
Posted in Agency Authority, Constitutional Issues in Regulations, Judicial Review & Remedies
The United States Supreme Court (SCOTUS) today granted certiorari in DOT v. Association of American Railroads (U.S. No. 13-1080) to review of a decision of the United States Court of Appeals for the District of Columbia Circuit that Congress unconstitutionally granted Amtrak regulatory authority over its priority of service among railroads. Such a delegation, according to the D.C. Circuit, violates a “cousin” of the constitutional non-delegation doctrine. The case raises a long dormant non-delegation doctrine issue that could clarify the constitutional limits on Congress’ ability to delegate regulatory authority to a larger set of non-agencies, but raises also other issues that could be problematic for reaching a decision on the substantive issue. Continue Reading