The Regulatory Week in Review: September 30, 2016
IN THE NEWS
- The Federal Communications Commission (FCC) delayed voting on its set-top box proposal —which would require cable companies to provide access to programming on devices other than cable boxes—while it works “to resolve the remaining technical and legal issues” presented by the proposal. The proposal has faced opposition from the cable industry, and leading up to Thursday, when the proposal was expected to come to a vote, Commissioner Jessica Rosenworcel reportedly expressed concerns over whether the FCC had the authority to implement part of the plan and possible copyright violations. The vote has not been rescheduled, but Chairman Tom Wheeler and the FCC’s two other Democratic commissioners said in a joint statement that the proposal will be placed “on the Commission’s circulation list and remain under consideration.”
- The U.S. Court of Appeals for the D.C. Circuit heard arguments about the validity of the Clean Power Plan—the keystone regulation of the Obama administration’s climate policy that would regulate greenhouse gas emissions from power plants under the Clean Air Act—from a wide range of stakeholders, including 28 states and power companies opposing the rule and 18 states, environmental organizations, and the U.S. Environmental Protection Agency (EPA) supporting the rule. Arguments touched upon several administrative and constitutional law issues, including whether the rule is invalid due to inconsistent language in versions of Clean Air Act amendments passed by the House and Senate—both of which were signed into law due to a “scrivener’s error”—and whether the word “system” in a key provision of the Clean Air Act should be interpreted to include emissions-reduction approaches that involve the entire electric grid, rather than being limited to individual power plants.
- The U.S. Department of Labor (DOL) finalized a rule that guarantees paid sick leave to 1.15 million employees of federal contractors. The rule—which implements a 2015 executive order—provides up to 56 hours of paid sick leave annually to employees of federal contractors. The Labor Department estimated that more than 500,000 of these employees previously received no paid sick leave, and stated that the new rule provides flexibility to federal contractors in how they implement the requirements. Secretary of Labor Thomas Perez reportedly said that paid sick leave “allows working families to focus on what really matters most without having to worry about the next paycheck.”
- The U.S. National Credit Union Administration (NCUA) announced that the Royal Bank of Scotland (RBS) will pay $ 1.1 billion to settle allegations arising from its sale of mortgage-backed securities to credit unions, a deal that the agency said will bring its collection total from financial institutions to $4.3 billion. NCUA Board Chairman Rick Metsger stated that the agency was “pleased” with the settlement and “intends to stay the course in…pursu[ing] recoveries against financial firms that…contributed to the” 2008 financial crisis. RBS CEO Ross McEwan stated that he “would like to clean these [settlements] up as quickly as we possibly can,” but the bank reportedly did not admit to any wrongdoing as part of the deal.
- The U.S. Fish and Wildlife Service (FWS) finalized a rule that changes the way species may be petitioned to be listed, delisted, or reclassified under the Endangered Species Act, by requiring petitioners to notify the wildlife agencies of each state where a species is located at least 30 days before filing a petition and capping the number of species allowed per petition at one. The changes are opposed by both the Center for Biological Diversity, which fears the rule will make it harder to get imperiled species listed under the Act, and Representative Rob Bishop (R-Utah), the chairman of the House Natural Resources Committee, who said the rule does not go far enough in reforming what he calls a “broken” statute.
- The White House issued a veto threat against H.R. 6094, a bill that would delay the effective date of the U.S. Department of Labor’s (DOL) overtime rule—which would raise the overtime salary threshold from $23,660 to $47,476. In its statement, the White House asserted that “many employers…are already taking steps to come into compliance” with the new rule, and that H.R. 6094 “would be disruptive to their efforts and create new uncertainty for employers,” but the bill’s sponsor, Rep. Tim Walberg (R-Mich.) has stated that while he agrees “that federal overtime rules need to be updated,” the new rule would implement “drastic changes” that could harm “workers, small businesses, nonprofit organizations, and colleges and universities.”
- The Securities and Exchange Commission (SEC) unanimously voted to propose a rule that would shorten the settlement time for broker-dealer securities transactions from three days, referred to as T+3, to two days, or T+2. The proposed rule, which is now open for public comment, has been heralded by Commissioner Michael Piwowar as a way to “increase capital efficiency and improve investor protection,” as well as “align trade processing in the United States to many other global markets.”
- Secretary of Commerce Penny Pritzker gave a keynote speech at the U.S. Chamber of Commerce’s 5th Annual Cybersecurity Summit in which she forcefully called for “fundamentally changing the value proposition for businesses to engage with federal agencies on cyber threats,” by providing protections for companies seeking government assistance after a cyber incident. Secretary Pritzker stated that “the federal government cannot regulate cyber risk out of existence” and that “[t]he problem is that relationships between regulators and the businesses they regulate are inherently adversarial – NOT collaborative.” Instead, she maintained that businesses and government need to work together to combat cyber threats.
WHAT WE’RE READING THIS WEEK
- A recent Gallup poll revealed that Americans are sharply divided on the issue of regulation. Overall, 47% of those polled felt that the government regulates businesses too much—down slightly from last year’s 49%— 22% said businesses were not regulated enough, and 27% said they felt there was just enough regulation. However, the numbers were much more striking when presented according to party affiliation—76% of Republicans felt that businesses are too regulated, but only 21% of Democrats agreed with them. The poll results were released on the heels of the first presidential debate, in which the candidates sparred on the issue of regulation.
- In a new research paper, Ryan Doerfler, a law professor at the University of Pennsylvania Law School, argues that the federal courts’ current approach to correcting scrivener’s errors—accidental typographical or clerical errors in legislation—is “much too strict” because it is only designed to guard against “false positives” but not “false negatives.” In other words, Doerfler argues that the current doctrine “systematically underrecognizes errors and results in systematic misinterpretation of the law.” Doerfler uses the U.S. Supreme Court’s King v. Burwell decision, which challenged the Patient Protection and Affordable Care Act (ACA), to demonstrate what he calls the “dramatic real-world harm” that can result from such a strict approach.
- Writing for the New Yorker’s Currency blog, James Surowiecki discussed how he believes the pharmaceutical company Mylan was able to dramatically increase the price of EpiPens, in part by strategically navigating the state and federal regulatory systems. In addition to successfully lobbying the U.S. Food and Drug Administration (FDA) to increase the recommended dose for a severe allergic reaction, Surowiecki contends that the company was influential in getting states to pass “public entity laws” allowing hotels and restaurants to receive prescriptions for EpiPens and keep the medication in stock for emergency use.