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

Monday Morning Regulatory Review – 10/22/12

Posted in Constitutional Issues in Regulations, Judicial Review & Remedies, Regulatory Process

The cupboard is getting bare as we approach the election.  The Office of Management and Budget (OMB) completed review on no (“0”) proposed or final rules last week, but at least the Department of the Treasury (DOTr) updated its Iranian assets blocking regulations and Department of Health and Human Services (HHS) submitted its calendar year 2013 hospital and physician reimbursement rates.  With Congress away, the courts are the last refuge for the regulatorily interested . . . and only one significant decision was noted last week, as much for entertainment value as substance.

Agency Brand X Interpretation:  Judge Bybee summed up court deference to agency interpretation that conflicts with prior court decisions for the en banc Ninth Circuit in Garfias-Rodriguez v. Holder:

In National Cable & Telecommunications Ass’n v. Brand X Internet Services, the Supreme Court instructed federal courts to defer to reasonable agency interpretations of ambiguous statutes, even when those interpretations conflict with the prior holding of a federal circuit court.  ….  That is the situation we confront here.  In Acosta v. Gonzales, …, we held that aliens who are inadmissible under § 212(a)(9)(C)(i)(I) of the Immigration and Nationality Act … are eligible for adjustment of status under … § 245(i) … in spite of the latter section’s requirement of admissibility.  A year later, the Board of Immigration Appeals (“BIA”) decided that such aliens are not eligible to apply for adjustment of status under § 245(i) ….  In this case, we must decide whether to defer to the agency’s interpretation of the INA and overrule Acosta and, if so, whether the agency’s interpretation may be applied to Garfias retroactively.

They deferred – but split badly, with a concurrence, a concurrence and dissent, two dissents, … and “Chief Judge KOZINSKI, disagreeing with everyone.”  (so in original).

Midnight RulesPast lamentations about the unannounced hiatus in regulations – and an impending “tsunami” after the election, no matter who wins – were echoed by colleague and former OMB Office of Information and Regulatory Affairs (OIRA) Administrator Susan Dudley.  She points out also a truth that the politicians like to overlook:  “This ‘midnight regulation’ phenomenon is not dependent on party; every modern president has issued more regulations between election day and inauguration day than in other quarters of his term.”  The difference now is that OMB will not explain what it is not doing.

Treasury Transaction Blocking:  This does not mean that all regulatory activity has stopped, and a good example of ongoing critical work is found in today’s Department of the Treasury (DOTr)’s final revisions of the Iranian Transactions Regulations.  Two important notes about these regulations:

DOTr adopted the regulations under a mix of statutory authority, implemented through executive orders, including the International Security and Development Cooperation Act of 1985, the International Emergency Economic Powers Act, and the National Defense Authorization Act for Fiscal Year 2012.

These statutes may provide authority that overlaps the inherent authority of the President to conduct foreign relations of the United States under Article II of the United States Constitution.  The Administration, however, did not assert any unilateral or even dual authority under the inherent authority of the Constitution.  The Administration may not have asserted constitutional authority because the statutes do not impinge on Executive authority, but give Executive authority additional tools under the first prong of Justice Jackson’s Youngstown Sheet and Tube v. Sawyer (concurring opinion) tripartite test of constitutional power sharing and conflict.

DOTr promulgated the regulations under the foreign affairs exception to the Administrative Procedure Act (APA), permitting final rules without advance notice and an opportunity for public comment under the rationale that such advance notice would adversely affect the foreign relations of the United States.

This use of authority illustrates the fact that not all foreign relations exceptions are adopted by the Department of State (DOS) – foreign affairs are not an exclusive DOS province.  The problematic version is DOS’s common insistence that the foreign affairs exception applies too broadly to DOS regulations.

HHS 2013 Reimbursement Rates:  In the only other notable administrative action, the Department of Health and Human Services (HHS) submitted two statutorily required  and economically significant final rules to OMB:  Proposed Changes to Hospital OPPS and CY 2013 Payment Rates; ASC Payment System and CY 2013 Payment Rates and Revisions to Payment Policies Under the Physician Fee Schedule and Part B for CY 2013.  HHS must adjust these Medicare hospital outpatient prospective payment and physician fee schedule rates annually.

CFPB Regload:  Robert M. Jaworski catalogued the recent Consumer Finance Protection Bureau (CFPB) proposals along with some sound suggestions on providing quality, effective comments on proposed rules.  Jaworski seems to believe that the pace is unusual, but for a “new” agency testing its reach, with a fairly good form for generating rules, and with no governor except the industry it is regulating, this is not that unusual.  Jaworski’s suggestions could be the opening lines of a number of commentaries on effective government relations with any agency (sans the loading of the specific rule and preference).

Bus Drivers’ Hours of Service:  Ilyse Schuman reports that the Department of Transportation (DOT) Federal Motor Carrier Safety Administration (FMCSA) is beginning to ramp up new “hours of service” or HOS rules for motorcoach operators.  HOS has not been a happy regulatory venue for DOT in the past, with prior rules withering before judicial searchlights.

NLRB Social Media Memo:  And while the time is available, we can catch up with Sara Hutchins Jodka’s detailed menu review of the most recent (and only second) social media policies decision by a National Labor Relations Board (NLRB) Administrative Law Judge (ALJ) – those company employee policies subject of the NLRB General Counsel’s murky memoranda.  This journey of a thousand miles has not reached the full NLRB, but at least the substance is being tested in its first step.