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Federal Regulations Advisor Insight and Commentary on U.S. Government Regulatory Affairs

Monday Morning Regulatory Review – 7/30/12

Posted in Judicial Process, Judicial Review & Remedies

Administrative Procedure Act (APA) litigation details dominate this week’s review.  The United States Court of Appeals for the District of Columbia Circuit upheld an airline-advertising rule, remanded part of a health care exclusion decision, and declined to stay a political advertisement disclosure rule.  New to the docket is a petition challenging a biofuels rule because the required biofuels do not exist.  The United States District Court for the District of Columbia refused to alter a judgment vacating a labor rule for lack of a jurisdictional quorum, and two more district courts decided cases on the contraceptive rule – one each way.  Details, links, etc. after the jump.

Spirit Rights:  The D.C. Circuit upheld the Department of Transportation (DOT)’s Enhancing Airline Passenger Protections, rule requirements that:

  1. the total price be the most prominent figure displayed on print advertisements and websites, inclusive of taxes (or the “Government’s Cut” as Spirit called it) and standard fees (not arbitrary and capricious or violating the First Amendment);
  2. airlines allow consumers who purchase their tickets more than a week in advance the option of canceling their reservations without penalty for twenty-four hours following purchase (not arbitrary and capricious); and
  3. airlines not increase the price of air transportation and baggage fees after consumers purchase their tickets (not procedurally defective or arbitrary and capricious).

The court’s decision in Spirit Airlines v. Department of Transportation found no fault in the rule underlying several levels of interpretation and guidance.

OxyContin Exclusion:  The D.C. Circuit also reversed the lower court and remanded a decision of the Department of Health and Human Services (HHS) in Friedman v. Sebelius.  The court upheld the Secretary’s exclusion of three officers of the maker of OxyContin from federal programs, but remanded the 12-year bar because the decision was arbitrary and capricious for want of a reasoned explanation for the length of the exclusions:

We do not suggest the Appellant’s exclusion for 12 years based upon a conviction for misdemeanor misbranding might not be justifiable; we express no opinion on that question.  Our concern here is that the [HHS Appeals Board] did not justify it in the decision under review.  Simply pointing to prior cases with the same bottom line but arising under a different law and involving materially different facts does not provide a reasoned explanation for the agency’s apparent departure from precedent.… The Secretary’s decision … was arbitrary and capricious with respect to the length of their exclusion because it failed to explain its departure from the agency’s own precedents.

FCC Broadcaster Political Ads Data:  The D.C. Circuit also summarily declined to stay the Federal Communications Commission (FCC)’s Standardized and Enhanced Disclosure Requirements for Television Broadcast Licensee Public Interest Obligations final rule on July 27, in National Association of Broadcasters v. FCC, noting simply that the petitioners failed to carry their heavy burden for a judicial stay (i.e. preliminary injunction).  Requirements that paid political advertising information be posted on the internet will become effective August 2, 2012, and the FCC is demonstrating the system today and tomorrow.

Cellulosic Biofuels:  The American Petroleum Institute (API) petitioned for review of the Environmental Protection Agency (EPA) Regulation of Fuel and Fuel Additives: 2011 Renewable Fuel Standards final rule and EPA’s denial of reconsideration of the requirement that refiners use cellulosic biofuels or pay a fee ($1.13 / gallon).  API claims that cellulosic biofuels do not actually exist, that no commercial supply was available in 2011.  API filed in the D.C. Circuit on July 24 (American Petroleum Institute v. EPA, No. 12-1330).

NLRB Case – Representation Procedures:  The D.C. District Court denied the National Labor Relations Board (NLRB) motion to alter or amend the judgment in Chamber of Commerce v. NLRB.  The court’s judgment vacated the NLRB Case – Representation Procedures rule for lack of a quorum.  The NLRB’s motion to amend judgment contended that the court erred in finding that a member was electronically “present” and made up the quorum, and presented additional evidence of the operation of the NLRB’s electronic voting system.  The court, however, found the motion was a rehash of prior arguments and that the NLRB Chief Information Officer’s new affidavit presented no evidence that could not have been presented on the original motion for summary judgment.  Accordingly, the court denied the NLRB’s Civil Rule 59(e) motion, leaving the NLRB with few options except to appeal although a colleague seems to suggest other factors are at play.  The result is not surprising in light of the NLRB’s poorly designed effort.

More Contraceptive Rule Decisions:  Two more district courts weighed in on the HHS Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act interim final rule and final rule:

  • one finding that the States and certain citizens had no Article III standing to sue (Nebraska v. Sebelius),
  • the other enjoining the rule as it may be applied to a single for-profit company owned by a family with religious beliefs contrary to the rule (Newland v. Sebelius).

Expect much more divergence of judicial opinion (and more ripeness questions) before this issue is resolved.