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

Monday Morning Regulatory Review – 11/26/12

Posted in Executive - OMB Review, Judicial Review & Remedies

The week of Thanksgiving is traditionally a quiet one – dedicated rightly to giving thanks for what we have with a touch of jostling for more as Black Friday has blended backward into Thanksgiving Day.  In addition to shopping, Black Friday traditionally is a quite time in the government – time to clean the office and fix some long-neglected projects.

Agencies cleaned out two significant proposed rules to the Office of Management and Budget (OMB):  the Department of Health and Human Services (HHS) Food and Drug Administration (FDA) Food Safety Modernization Act (FSMA) third party inspection rule and the Department of Homeland Security Transportation Security Administration (TSA) passenger-screening rule.  In addition, two more district courts weighed in on preliminary relief from the HHS Affordable Care Act (ACA) contraception regulations – both denying relief.

HHS FDA Food Inspections:  HHS submitted the FDA’s Accreditation of Third Parties to Conduct Food Safety Audits and for Other Related Purposes proposed rule for review by OMB on November 24.  The proposal would provide for accreditation of third-party auditors to conduct food safety audits of foreign entities, including foreign facilities in the food import supply chain, and such necessary details as protecting against conflicts of interest between accredited auditors and audited entities, and may include laboratory analyses of food requirements.

The rule is a necessary adjunct to four substantive FDA Food Safety Modernization Act (FSMA) regulations pending at OMB discussed previously and may be both the workaround for a number of foreign policy issues and the inherent territorial limitations on inspection authority, and one reason why OMB is holding the four substantive FSMA rules.  OMB should consider whether this proposed rule is consistent with the third-party inspection proposed recommendations currently before the Administrative Conference of the United States (ACUS).

DHS TSA Passenger Screening:  DHS submitted TSA’s Passenger Screening Using Advanced Imaging Technology to OMB for review on November 24.  This rule responds to the Court of Appeals for the District of Columbia Circuit decision in Electronic Privacy Information Center v. DHS, decided 17 months ago, that TSA erred in rejecting a petition for rulemaking and that a rulemaking is required for TSA’s advanced screening technology.  DHS has not published an abstract in the – missing – Unified Agenda.

This economically, policy and legal significant rule will pose a number of challenges, including the legal authority for the contours of the rulemaking itself.  Among the economic issues that TSA and DHS, and now OMB, must grapple:

  • setting the baseline of existing pre-rule facts against such moving targets as TSA’s developing Pre✓™ to determine the economic impact of the rule;
  • determining who would be adversely impacted (although TSA has a wealth of temporary passenger data, it is not clear whether or how they can use that data); and
  • assessing alternatives against the potential loss that could come from security breaches under existing (baseline) procedures.

The rule is currently “on track” given the Department of Justice (DOJ) assertion to the court of appeals that the proposed rule would be published in February 2013 (based on a DHS estimate).

HHS Contraception – again.  Two more decisions in the ongoing HHS ACA contraceptive regulations soap opera:

  • Hobby Lobby Stores, Inc. v. Sebelius (W. D. Oklahoma No. 12-civ-1000) – preliminary injunction against application of regulations denied to for-profit, self-insured businesses owned by family trust operated under religious beliefs under Religious Freedom Restoration Act (RFRA) and First Amendment to the United States Constitution.  The district court acknowledge the possible inter-district conflict within the United States Court of Appeals for the Tenth Circuit with Newland v. Sebelius, but distinguished its analysis of the applicable preliminary injunction standard; the district court also acknowledged other preliminary injunctions in Legatus and Tyndale House Publishers, Inc. (both previously noted in Monday Morning Regulatory Review).  Ultimately, the district court concluded that corporations, such as in this case, do not have religious rights.  The court concluded that the plaintiffs did not demonstrate a probability of success on the merits.
  • Catholic Diocese of Nashville v. Sebelius (M. D. Tennessee No. 12-cv-0934) – religious organization complaint dismissed plaintiffs’ complaint on defendants’ motion for want of standing and, in the alternative, lack of ripeness, similar to Wheaton College and Belmont Abbey College.(both previously noted in Monday Morning Regulatory Review).

On the appellate front, Wheaton College and Belmont Abbey College v. Sebelius, the early religious college “standing / ripeness / mootness” decisions, will be argued before the United States Court of Appeals for the District of Columbia Circuit on December 14, 2012 (D.C. Cir. No. 12-5273).

Update:  The Supreme Court of the United States this morning granted the petition for rehearing in Liberty University v. Geithner, vacated its denial of certiorari, granted certiorari, vacated the judgment below, and remanded the case to the United States Court of Appeals for the Fourth Circuit for consideration of the plaintiffs’ claims in light of the Court’s decision in National Federation of Independent Business v. Sebelius.  In short, the Fourth Circuit must now consider whether the individual and employer insurance coverage mandates of the ACA violate religious freedom rights or equal protection under the Constitution.  The Fourth Circuit did not previously rule on these claims because it ruled that Liberty University was barred from pursuing its claims by the Federal Anti-Injunction Act, which the Supreme Court held did not apply.  Liberty University now joins the issues raised in Wheaton College and Belmont Abbey College before a different court of appeals.