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The Daily Brew: Breaking down the battlegrounds: The hottest races on the ballot this November

Welcome to the Wednesday, September 22, Brew. Here’s what’s in store for you as you start your day:

  1. Previewing this year’s battleground elections
  2. Your help is needed today
  3. Three state legislative special elections have already been scheduled for 2022

Previewing this year’s battleground elections

Election Day 2021 is less than six weeks away! In yesterday’s edition, we looked at the 999 elections within Ballotpedia’s coverage scope taking place on Nov. 2, 2021. Today, we’re focusing on the 25 elections we’ve designated as battlegrounds.

Ballotpedia designates elections that we expect will have a meaningful effect on the balance of political power as battlegrounds. Few elections have more potential to make a difference in the balance of power in state government than those for trifecta offices. A state government trifecta occurs when the governor’s party also controls majorities in both chambers of the state legislature. This year, we’ve identified three elections for trifecta office as battlegrounds:

Governor of Virginia: Virginia’s unique constitutional prohibition on governors serving back-to-back terms means there is never an incumbent on the ballot. Democrats have held a trifecta in Virginia since winning a majority in both chambers of the state legislature in 2019. Between 1977 and 2009, the party that lost the previous year’s presidential election won the Virginia gubernatorial election. This trend was broken when Terry McAuliffe (D) was elected governor in 2013, the year after Barack Obama (D) was re-elected president.

This year, McAuliffe, Glenn Youngkin (R), Princess Blanding (Liberation), and Paul Davis (I) are in the running. A win for McAuliffe would preserve Virginia’s Democratic trifecta if the party also maintains their legislative majority and a win for Youngkin would break it regardless of the legislative election results. Two election forecasting agencies say the race leans towards McAuliffe and a third says he is likely to win.

Virginia House of Delegates: All 100 seats in Virginia’s House of Delegates are also up this year. Democrats hold a 55-45 majority, making this the first election year since 1999 when Virginia Democrats are defending a state house majority. The party that won the previous year’s presidential election has lost seats in five of the seven post-presidential election years since 1993.

In 2019, Democrats flipped six seats to win control of the chamber, which had been under a 51-49 Republican majority. In the 2017 election, Democrats flipped 15 seats, with control of the chamber coming down to a drawing of straws

If Republicans win a majority this year, they will break the Democratic trifecta regardless of the results of the gubernatorial election. If Democrats maintain their majority and win the gubernatorial election, they will preserve their trifecta. No seats are up in the Virginia State Senate.

Governor of New Jersey: Incumbent Phil Murphy (D), Jack Ciattarelli (R), Madelyn Hoffman (G), Gregg Mele (L), and Joanne Kuniansky (Socialist Workers) are running for governor of New Jersey. Although New Jersey is holding elections for both chambers of the state legislature, Democrats are expected to maintain their majorities, meaning New Jersey’s trifecta status will likely come down to the gubernatorial election.

Murphy was first elected in 2017, defeating Kim Guadagno (R) 56.0% to 41.9%. Two election forecasters say the race is solidly in Murphy’s column, while a third says Murphy is likely to win. No Democrat has been re-elected as governor of New Jersey since Brendan Byrne (D) in 1977.

Our selection of political battlegrounds is not limited to trifecta offices; here’s a selection of some of the other races we’ll be following this November:

Pennsylvania Supreme Court: One of the seven seats on the Pennsylvania Supreme Court is up for election this year. Pennsylvania State Supreme Court justices are elected in partisan elections. Currently, five members of the court were elected as Democrats, one was elected as a Republican, and one was appointed by a Democratic governor. 

The position up for election is currently held by Chief Justice Thomas Saylor (R), who will retire on Dec. 31 after reaching the mandatory retirement age. Maria McLaughlin (D) and Kevin Brobson (R) will be on the ballot for a 10-year term.

Mayor of Boston: Michelle Wu and Annissa Essaibi George are running in the nonpartisan election for mayor of Boston. Political observers describe the conflict between the two, both members of the city council, as ideological, with Wu running as a progressive and Essaibi George as a moderate. The winner will become the first woman and the first person of color to be elected mayor of Boston.

Seattle city attorney: Ann Davison and Nicole Thomas-Kennedy are in the running for this office after incumbent Pete Holmes was eliminated in the nonpartisan primary. Both have pledged to change course from Holmes’ approach to law enforcement.

Davison, who ran as a Republican for lieutenant governor in 2020, said she would step up the city’s law enforcement efforts and prosecute more offenses. Thomas-Kennedy said she would put an end to the prosecution of misdemeanors, saying these crimes were often committed by individuals facing other social problems such as poverty and addiction.

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Your help is needed today

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Three state legislative special elections have already been scheduled for 2022

Election Day 2021 may be just around the corner, but the special election calendar never stops. Ballotpedia is tracking three state legislative special elections that have already been called for 2022.

The three elections include two in Alabama and one in Massachusetts. Two are for Democrat-held seats and one is for a Republican-held seat. Here’s more on each:

Massachusetts (Jan. 11): A special general election will be held on Jan. 11, following a primary scheduled for Dec. 14, 2021, to fill the vacancy opened when state Sen. Joseph Boncore (D) resigned to take a job in the private sector. The First Suffolk & Middlesex District last had a contested general election in 2012. That year, incumbent Anthony Petruccelli (D) defeated Thomas Dooley, III (R) 81.6% to 18.4%. No candidates have filed yet.

Alabama (Feb. 1): A special general election will be held on Feb. 1 to fill the vacancy opened when state Rep. Bill Poole (R) resigned to take office as director of the Alabama Department of Finance. Alabama’s 63rd state house district last had a contested general election in 2010. That year, Poole defeated Susan Pace Hamill (D) 63.8% to 36.2%. The only candidate to file so far for the special election is Cynthia Almond (R), although minor party and independent candidates have until Oct. 19.

Alabama (March 1): Alabama’s second special state legislative election of the year will take place March 1 to fill the vacancy opened by the death of state Rep. Thad McClammy (D). Alabama’s 76th state house district has not had a contested general election since at least 2006. The only major party candidate to file was McClammy’s daughter Patrice McClammy (D). Minor party and independent candidates have until Nov. 16 to file.

So far in 2021, 64 state legislative elections have either taken place or been scheduled for later this year. Between 2011 and 2020, an average of 75 state legislative special elections took place each year. A plurality of this year’s elections (27) were called after the incumbent resigned to either take a different elected or appointed office or to run for a different office.

Of the elections that have taken place so far this year, two resulted in partisan control of the seat changing. Democrats picked up a seat from Republicans in the New Hampshire House of Representatives, while Republicans gained a seat from Democrats in the Connecticut State Senate.

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U.S. Senate confirms nominee to 10th Circuit Court of Appeals

The U.S. Senate on Sept. 20 confirmed one of President Joe Biden’s (D) federal judicial nominees to a lifetime Article III judgeship.

Veronica Rossman was nominated to the 10th Circuit on May 12 to replace Judge Carlos Lucero, who assumed senior status on Feb. 1. Rossman was rated as Qualified by a substantial majority and Well Qualified by a minorityby the American Bar Association. Rossman will join the court upon receiving her judicial commission and taking her judicial oath.

To date, 12 of Biden’s appointees have been confirmed. For historical comparison since 1981, the following list shows the date by which the past six presidents had 12 Article III judicial nominees confirmed by the Senate:

Currently, 10 Article III nominees are awaiting a confirmation vote from the U.S Senate, seven nominees are awaiting a Senate Judiciary Committee vote to advance their nominations to the full Senate, and 12 nominees are awaiting a hearing before the Senate Judiciary Committee.

Additional reading:



North Carolina court strikes down voter ID law as unconstitutional

On Sept.17, 2021, a three-judge panel of the Wake County Superior Court ruled 2-1 that North Carolina’s voter ID law violates the state constitution. As a result, the court blocked enforcement of the law.

The court found that “the evidence at trial [is] sufficient to show that the enactment of [the voter ID law] was motivated at least in part by an unconstitutional intent to target African American voters.” The court also ruled that “[o]ther, less restrictive voter ID laws would have sufficed to achieve the legitimate nonracial purposes of implementing the constitutional amendment requiring voter ID, deterring fraud, or enhancing voter confident.” Judges Michael O’Foghludha and Vince M. Rozier Jr. formed the majority. Judge Nathaniel J. Poovey dissented. Sam Hayes, general counsel for House Speaker Tim Moore (R), said Moore would appeal the ruling.

The court’s order represents its final judgment on the matter. The court had previously issued a preliminary injunction barring enforcement of the law on a temporary basis, pending resolution on the merits.

This ruling is the most recent in a series of legal developments involving North Carolina’s voter ID law. On Nov. 6, 2018, North Carolina voters approved a state constitutional amendment establishing a photo identification requirement for voters. The state legislature, with Republican majorities in both chambers, approved implementing legislation (SB 824) in December of that year, overriding Democratic Governor Roy Cooper’s veto. Lawsuits immediately followed, both in federal and state-level courts. In December 2019, a federal district court temporarily enjoined SB 824, but this ruling was subsequently overturned by the U.S. Court of Appeals for the Fourth Circuit. The state lawsuit giving rise to the Sept. 17 order has been ongoing since 2019.



Filing deadline passes for Concord municipal election

The city of Concord, N.H., is holding nonpartisan general elections for mayor and ward councilors on Nov. 2. The filing deadline for candidates paying a fee in this election was Sept. 13. The filing deadline for candidates filing by petition in this election was Sept. 17.

In the mayoral race, incumbent Jim Bouley will face Taylor Hall in the general election. Bouley has served as the city’s mayor since 2008.

Twelve city council seats are on the ballot in 2021. The candidates that win the Nov. 2 general election will serve two-year terms. Ward 5 incumbent Robert Werner and Ward 6 incumbent Linda Denison did not file for re-election.

Nine incumbents—at-large incumbent Amanda Grady Sexton, at-large incumbent Fred Keach, Ward 2 incumbent Erle Pierce, Ward 3 incumbent Jennifer Kretovic, Ward 4 incumbent Karen McNamara, Ward 7 incumbent Keith Nyhan, Ward 8 incumbent Gail Matson, Ward 9 incumbent Candace Bouchard, and Ward 10 incumbent Zandra Rice Hawkins—are unopposed in the general election. Ward 6 candidate Paula McLaughlin is also running unopposed in the election.

There will be two contested races on the general election ballot. Ward 1 incumbent Brent Todd will face off against William Barton. Todd has served on the city council since 2014. In the Ward 5 race, Stacey Brown and former city councilor Mark Coen are facing off in the general election. Coen previously served on the city council for 13 years.

Concord is the third-largest city in New Hampshire. It had an estimated population of 43,627 in 2019, according to the U.S. Census Bureau. In 2021, Ballotpedia is covering municipal elections in 22 counties and 70 cities, including 40 mayoral elections.

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Special election for vacant Iowa House seat called for October

A special election has been called to fill the vacant Iowa House of Representatives seat in District 29. The seat became vacant on Sept. 10 when former state Rep. Wesley Breckenridge (D) resigned to take a job with the Iowa Law Enforcement Agency.

The special election is scheduled for Oct. 12. The candidate filing deadline for the election is Sept. 28. According to the Jasper County Elections website, absentee voting will begin sometime after Sept. 29 and run through Oct. 11. The start of absentee voting will depend on when the auditor’s office receives ballots. Polls will be open on election day from 7 a.m. to 8 p.m. CDT. 

To date, 64 state legislative special elections have been scheduled for 2021 in 21 states. Between 2011 and 2020, an average of 75 special elections took place each year.

Additional reading:



Documenting America’s Path to Recovery #300: September 21, 2021

Welcome to Documenting America’s Path to Recovery. Today we look at:

  • The return of Nebraska’s COVID-19 dashboard
  • A vaccine mandate for childcare workers in New Jersey
  • Vaccine distribution
  • Lawsuits about state actions and policies 
  • State-level mask requirements
  • COVID-19 emergency health orders

We are committed to keeping you updated on everything from mask requirements to vaccine-related policies. We will keep you abreast of major developments—especially those affecting your daily life. Want to know what we covered Thursday? Click here.

Since our last edition

What rules and restrictions are changing in each state? For a continually updated article, click here.

Nebraska (Republican trifecta): On Monday, Sept. 20, Gov. Pete Ricketts (R) issued an order allowing the state to share data on hospital bed capacity. Ricketts said he issued the order because the percent of people hospitalized with COVID-19 rose above 10% of all hospitalizations. The order allows Ricketts to restart the state’s COVID-19 dashboard.

New Jersey (Democratic trifecta): On Sept. 20, Gov. Phil Murphy (D) issued an executive order requiring childcare facility employees to be fully vaccinated against the coronavirus or receive weekly coronavirus testing by Nov. 1. The order also said that all employees, visitors, students, and children over the age of two in childcare facilities, regardless of vaccination status, are required to wear a mask.

Virginia (Democratic trifecta): On Thursday, Sept. 16, the Virginia Department of Health (VDH) announced that people vaccinated in Virginia can use a QR code to prove their vaccination status. Vaccinated individuals can go to vaccinate.virginia.gov to access the QR code that, when scanned, will pull up a digital copy of their vaccination records.  

Vaccine distribution

We last looked at vaccine distribution in the Sept. 16 edition of the newsletter. As of Sept. 20, the states with the highest vaccination rates as a percentage of total population (including children) were:

The states with the lowest rates were:

Lawsuits about state actions and policies

Read more: Lawsuits about state actions and policies in response to the coronavirus (COVID-19) pandemic, 2020

Overview:

To date, Ballotpedia has tracked 1,886 lawsuits, in 50 states, dealing in some way with the COVID-19 outbreak. Court orders have been issued, or settlements have been reached, in 581 of those lawsuits. 

Since Sept. 14, we have added three lawsuits to our database. We have also tracked one additional court order and/or settlement. 

Details:

  • Brnovich v. Biden: On Sept. 14, Arizona’s attorney general filed the first legal challenge to Pres. Joe Biden’s (D) COVID-19 vaccine mandates for federal workers and large companies. At issue are Biden’s executive orders requiring all federal executive branch workers and all employees of contractors doing business with the federal government to be vaccinated. Also at issue is the Occupational Safety and Health Administration’s development of a rule requiring employers with 100 or more employees to mandate vaccination or weekly COVID-19 testing. In his complaint, Attorney General Mark Brnovich (R) argues that Biden is unconstitutionally favoring immigrants who do not have legal permission to be in the country. Brnovich’s suit contends that “unauthorized aliens will not be subject to any vaccination requirements even when released directly into the United States (where most will remain), while roughly a hundred million U.S. citizens will be subject to unprecedented vaccination requirements.” Brnovich contends that this disparate treatment amounts to a violation of the Equal Protection Clause of the Fourteenth Amendment, suggesting that the mandates reflect “an unmistakable—and unconstitutional—brand of favoritism in favor of unauthorized aliens.” Brnovich is seeking a court judgment declaring the mandates unconstitutional and an injunction barring their enforcement. In a press statement, Brnovich said, “There can be no serious or scientific discussion about containing the spread of COVID-19 that doesn’t begin at our southern border.” The case was filed in the U.S. District Court for the District of Arizona and has been assigned to Judge Michael Liburdi, an appointee of President Donald Trump (R).

State mask requirements

We last looked at face coverings in the Sept. 14 edition of the newsletter. Since then, New Mexico extended its statewide indoor mask requirement for vaccinated and unvaccinated individuals, and New York announced mask requirements for vaccinated and unvaccinated individuals in several settings, such as state-regulated childcare facilities and congregate facilities. As of Sept. 21, masks were required in ten states with Democratic governors. Thirteen states with Democratic governors and all 27 states with Republican governors had no state-level mask requirements in effect.

COVID-19 emergency health orders

Read more: State emergency health orders during the coronavirus (COVID-19) pandemic, 2021

Governors and state agencies in all 50 states issued orders declaring active emergencies in response to the coronavirus pandemic. These orders allowed officials to access resources, like stockpiles of medical goods and equipment, unavailable to them during non-emergencies and temporarily waive or suspend certain rules and regulations. 

Overview

  • COVID-19 emergency orders have expired in 24 states. Emergency orders remain active in 26 states.

Since Sept. 14, no state has ended or enacted a COVID-19 emergency order. 



Economy and Society: SEC Chairman issues another warning to fund managers

ESG Developments This Week

In Washington, D.C.

SEC Chairman Gensler testimony on crypto, disclosure, and more

On September 14, Securities and Exchange Commission (SEC) Chairman Gary Gensler testified before the Senate Committee on Banking, Housing, and Urban Affairs, covering several topics related to ESG investing.

First, he discussed the SEC’s interest in regulating crypto-currencies and laid out his plans:

“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending. Frankly, at this time, it’s more like the Wild West or the old world of “buyer beware” that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications. We can do better.

I have asked SEC staff, working with our fellow regulators, to work along two tracks:

One, how can we work with other financial regulators under current authorities to best bring investor protection to these markets?

Two, what gaps are there that, with Congress’s assistance, we might fill?

At the SEC, we have a number of projects that cross over both tracks:

The offer and sale of crypto tokens

Crypto trading and lending platforms

Stable value coins

Investment vehicles providing exposure to crypto assets or crypto derivatives

Custody of crypto assets…

Further, I’ve suggested that platforms and projects come in and talk to us. Many platforms have dozens or hundreds of tokens on them. While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities. Make no mistake: To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they qualify for an exemption.

I am technology-neutral. I think that this technology has been and can continue to be a catalyst for change, but technologies don’t last long if they stay outside of the regulatory framework.”

Gensler also addressed proposed disclosure rules that the SEC has pondered for several months; rules that he claimed many ESG investors hope will bring greater uniformity and greater consistency to the ESG marketplace. To that end, Gensler stated the following:

“Since the 1930s, when Franklin Delano Roosevelt and Congress worked together to reform the securities markets, there’s been a basic bargain in our capital markets: investors get to decide what risks they wish to take. Companies that are raising money from the public have an obligation to share information with investors on a regular basis.

Those disclosures changes over time. Over the years, we’ve added disclosure requirements related to management discussion and analysis, risk factors, executive compensation, and much more.

Today’s investors are looking for consistent, comparable, and decision-useful disclosures around climate risk, human capital, and cybersecurity. I’ve asked staff to develop proposals for the Commission’s consideration on these potential disclosures. These proposals will be informed by economic analysis and will be put out to public comment, so that we can have robust public discussion as to what information matters most to investors in these areas.

Companies and investors alike would benefit from clear rules of the road. I believe the SEC should step in when there’s this level of demand for information relevant to investors’ investment decisions.”

The Chairman also issued another warning to fund managers that he and the Commission are watching closely and intend to ensure that promises and results match up closely:

“[W]e’ve seen a growing number of funds market themselves as “green,” “sustainable,” “low-carbon,” and so on.

I’ve asked staff to consider ways to determine what information stands behind those claims and how we can ensure that the public has the information they need to understand their investment choices among these types of funds.”

Plan advisors have big hopes for Labor Department

Last week, the National Association of Plan Advisors (NAPA) held its annual 401(k) Conference, and among the hot topics was the impending decision by the Department of Labor regarding the suitability of ESG investment funds in retirement plans, under the authority of the Employee Retirement Income Security Act of 1974 (ERISA). As has been previously noted in this newsletter, the Trump Labor Department issued a rule late last year that suggested that ESG plans did not meet fiduciary requirements of ERISA and, therefore, should be handled sparingly by retirement plan managers. The Biden Labor Department, however, declined to enforce the rule and has been working on a new rule of its own, which will presumably be more ESG-friendly. According to Roll Call, advisors at the NAPA conference were keenly interested in the timing and content of the new Labor rule:

“As the Labor Department mulls a proposed rulemaking on environmental, social and governance investment options by retirement plans, advisers say the rules are likely to temper a “chilling effect” caused by the prior administration’s guidance.

Advisers say more retirement savers are asking about ESG investing and that the forthcoming rules could place them on equal footing with many retail and institutional investors who examine factors such as environmental sustainability and corporate responsibility on social issues alongside traditional financial metrics.

“I don’t know if DOL is going to go as far as requiring plan sponsors to think about ESG investments as part of a plan menu, but I am pretty confident we’re going to get a level playing field,” National Association of Plan Advisors Executive Director Brian Graff told attendees as he led a panel discussion of experts during the NAPA 401(k) Summit this week.

Retirement plan fiduciaries haven’t had that much leeway in directing investments into ESG options….

“Retirement plan sponsors and participants deserve the freedom to choose the 401(k) investment that best suits their needs,” Graff, who is also CEO of the American Retirement Association, said in a prior statement in support of proposed legislation….

Investors worldwide are seeking more ESG options, according to another panelist, Charles Nelson, vice chairman and chief growth officer of Voya Financial.

“We meet with analysts and investors, and every time there’s a question around ESG,” Nelson said at the event. “I think this is one of the greatest opportunities for advisers in your practices as you go forward, because businesses, whether they’re publicly traded or they’re privately held by private equity or ultimately a hedge fund, they’re getting asked these questions.”

Another panelist noted it gives plan advisers more credibility with clients when they can discuss and offer ESG options.

“You’re now not just the guy or gal that comes in to do the 401(k) review — you become a strategic business partner with them, so it puts you at a much different level,” said Jania Stout, senior vice president at OneDigital Retirement. “I think that’s a huge opportunity for us as advisers.”…

One notion shared by all the panelists: ESG investing is here to stay.

“Look, you can run your practice how you want, and you all should, but there’s a reason investors and shareholders are asking about this around the world and increasingly in the U.S,” said Nelson. “And I really believe it’s going to continue to build here in the U.S., and those advisers that lean into it and can find a way to engage with their customers in a different way on this will find some new growth as well.””

In the spotlight

NYU professor Damodaran posts criticism of ESG 

Last week, Aswath Damodaran, a finance professor at the Stern School of Business at New York University, published a post on his personal blog, Musing on Markets, criticizing ESG and its claims of ethical superiority in unflinching terms, calling ESG “The Goodness Gravy Train.” Among other things, Damodaran reiterated his four key conclusions from earlier work on ESG:

“1. Goodness is difficult to measure, and the task will not get easier!

2. Being “good” will add to value some companies, hurt others, and leave the rest unaffected!

3. The ESG sales pitch to investors is internally inconsistent and fundamentally incoherent

4. Outsourcing your conscience is a salve, not a solution!”

Damodaran finished with the following repudiation of what he describes as ESG gravy train-riders:

“The ESG movement’s biggest disservice is the message that it has given those who are torn between morality and money, that they can have it all. Telling companies that being good will always make them more valuable, investors that they can add morality constraints to their investments and earn higher returns at the same time, and young job seekers that they can be paid like bankers, while doing peace corps work, is delusional. In the long term, as the truth emerges, it will breed cynicism in everyone involved, and if you care about the social good, it will do more damage than good. The truth is that, most of the time, being good will cost you and/or inconvenience you (as businesses, investors, or employees), and that you choose to be good, in spite of that concern.”

Notable quotes

“I am willing to listen to arguments for why this new model is better, but I am certainly not willing to concede, without challenge, that a corporate CEO knows my value system better than I do, as a shareholder, and is better positioned to make judgments on how much to give back to society, and to whom, than I am.”

Aswath Damodaran, “The ESG Movement: The ‘Goodness’ Gravy Train Rolls On!” September 14, 2021



Checks and Balances – September 2021 – Sue and settle returns to the EPA

The Checks and Balances Letter delivers news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process and the rule of law.

This edition: 

In this month’s edition of Checks and Balances, we review federal legislation that would return administrative law judges (ALJs) to the competitive civil service; a new statutory interpretation from the U.S. Department of Education allowing states to regulate student loan servicers; recent decisions from the U.S. Supreme Court that allowed for the continuation of the Trump administration’s “Remain in Mexico” policy and that struck down the Centers for Disease Control and Prevention’s eviction moratorium; and the return of sue and settle practices at the Environmental Protection Agency. 

At the state level, we take a look at state and local jurisdictions with eviction moratoriums that remain in place after the Supreme Court’s decision.

We also highlight a new report from the U.S. Government Accountability Office that surveyed the use of facial recognition technology by federal agencies. As always, we wrap up with our Regulatory Tally, which features information about the 187 proposed rules and 290 final rules added to the Federal Register in August and OIRA’s regulatory review activity.


In Washington

Bill aiming to return ALJs to competitive service advances in House

What’s the story? 

The U.S. House Reform and Oversight Committee on July 20 voted 24-16 along party lines to advance legislation that would redesignate administrative law judges (ALJs) as members of the competitive civil service and reestablish the U.S. Office of Personnel Management’s authority over the ALJ hiring process. 

President Donald Trump in 2018 moved ALJs from the competitive civil service to the excepted service via Executive Order 13843. The order aimed to align ALJ appointment practices with the U.S. Supreme Court’s decision in Lucia v. SEC, which held that the ALJs of the U.S. Securities and Exchange Commission (SEC) are are officers of the United States who must be appointed by the president, the courts, or agency heads rather than hired by agency staff. Prior to the order, OPM screened ALJ candidates through a merit-based selection process as part of the competitive service. Agencies could only hire ALJs from OPM’s pool of vetted candidates.

Supporters of the legislation (the Administrative Law Judges Competitive Service Restoration Act) argue that E.O. 13843 threatens ALJ impartiality by allowing partisan agency heads to appoint ALJs based on their own standards.“This exposed impartial judges, who determined the outcome of disputes over labor-management relations, claims for Social Security and public health benefits, to political influence,” said the bill’s author, Representative Gerry Connolly (D-Va.).

Opponents of the legislation argue that E.O. 13843 strengthens ALJ subject matter expertise by allowing agency heads to consider qualifications beyond the scope of OPM’s generalist vetting criteria. “By placing ALJs in the excepted service, it gave federal departments and agencies greater flexibility to assess prospective ALJ candidates,” said the committee’s ranking member, Rep. James Comer (R-Ky.).

Want to go deeper?

Department of Education issues new statutory interpretation allowing states to regulate student loan servicers

What’s the story? 

The U.S. Department of Education (ED) on August 9 announced its departure from the Trump administration’s statutory interpretation of the federal Higher Education Act (HEA) that prevented states from regulating student loan servicers. Under the department’s new interpretation, states will be able to develop and enforce consumer protection standards applicable to student loan servicers as long as they are not preempted by federal law.

“Effective collaboration among the states and federal government is the best way to ensure that student loan borrowers get the best possible service,” said Education Secretary Miguel Cardona in a press release. “We welcome public input on this interpretation and look forward to enhancing consumer protections for student loan borrowers by clarifying the relationship between federal and state law on this issue.” 

Former ED Secretary Betsy DeVos aimed to limit state regulation of student loan servicers in order to avoid what she referred to as a regulatory maze of state and federal requirements. Student loan servicers have argued that additional state regulations will increase both business costs and confusion among borrowers.

“Forcing [federal student loan servicers] to serve dozens of state governments that contradict federal rules will create borrower confusion and worsen the borrowers’ repayment experience,” U.S. House Education and Labor Committee ranking member Virginia Foxx (R-N.C.) told The Washington Post. “The department’s bureaucratic incompetence, combined with inherent design flaws in the Higher Education Act, are the reasons why borrowers get left behind.”

Since 2014, more than half of all states have proposed or implemented state-level requirements for student loan servicers. In some states, such as Virginia and Massachusetts, these requirements take the form of a borrower’s bill of rights—minimum timeliness standards for loan processing, communications, and other concerns. Similar legislation is pending in a dozen states, according to the Student Borrower Protection Center.

Want to go deeper?

SCOTUS declines to block Remain in Mexico policy, strikes down CDC’s eviction moratorium 

What’s the story? 

The U.S. Supreme Court last month issued two noteworthy decisions concerning the exercise of agency authority. The court first declined to block a district judge’s ruling that ordered the Biden administration to reinstate the Trump administration’s Migrant Protection Protocols (known as the “Remain in Mexico” policy). The court later found that the Centers for Disease Control and Prevention’s (CDC) eviction moratorium issued in response to the coronavirus (COVID-19) pandemic was unconstitutional.

In an unsigned order, the court on August 24 declined to block a ruling from U.S. District Judge Matthew Kacsmaryk in Biden v. Texas that directed the Biden administration to reinstate the U.S. Department of Homeland Security’s Migrant Protection Protocols. The program, instituted under the Trump administration, requires asylum-seekers to wait in Mexico prior to their immigration hearings. 

The justices found that the “applicants have failed to show a likelihood of success on the claim that the memorandum rescinding the Migrant Protection Protocols was not arbitrary and capricious.” While six justices supported the order, Justices Elena Kagan, Sonia Sotomayor, and Stephen Breyer would have issued a stay to block the district court ruling while the case moves through the appeals process.

Two days later, the court issued another unsigned opinion in Alabama Association of Realtors v. U.S. Department of Health and Human Services holding that the CDC’s eviction moratorium unlawfully exceeded the agency’s statutory authority. “It strains credulity to believe that [§361(a) of the Public Health Service Act] grants the CDC the sweeping authority that it asserts,” wrote the majority justices. 

Justices Elena Kagan, Sonia Sotomayor, and Stephen Breyer again dissented, arguing in part that “it is far from ‘demonstrably’ clear that the CDC lacks the power to issue its modified moratorium order.”

Want to go deeper?

WOTUS ruling signals return of sue and settle

What’s the story?

U.S. District Judge Rosemary Marquez on August 30 issued a decision in Pasqua Yaqui Tribe et al. v. U.S. Environmental Protection Agency that vacated and remanded the Trump administration’s Navigable Waters Protection Rule (NWPR), which narrowed the scope of the Environmental Protection Agency’s (EPA) regulatory authority under the Clean Water Act (CWA). The ruling signals a return to sue and settle practices at the EPA, which the Trump administration had outlawed through an agency directive in 2017.

Sue and settle is a term used to describe cases in which a federal agency is sued by an interested party, declines to defend itself in court, and negotiates a settlement with the plaintiff in a non-adversarial process. Through sue and settle, outside groups sue an agency in order to reach a settlement on terms favorable to the regulatory goals of both.

The NWPR adopted a narrow definition of “waters of the United States” (WOTUS) that limited the EPA’s authority to regulate certain waters, including wetlands. The rule adopted Justice Antonin Scalia’s reasoning in Rapanos v. United States (2006) that only wetlands adjacent to navigable waters fall under CWA oversight. A coalition of Native American tribes challenged the rule in the United States District Court for the District of Arizona, arguing that the WOTUS definition under the NWPR disregards established science and is inconsistent with the statutory objectives of the CWA.

The EPA under the Biden administration had “expressed an intent to repeal the NWPR and return to the pre-2015 regulatory regime while working on a new definition of ‘waters of the United States,’” according to Judge Marquez’s opinion. 

Judge Marquez ruled in favor of the plaintiffs, finding that their concerns “are not mere procedural errors or problems that could be remedied through further explanation. Rather, they involve fundamental, substantive flaws that cannot be cured without revising or replacing the NWPR’s definition of ‘waters of the United States.’” 

It is unclear what standard now controls WOTUS regulation under the CWA. The Trump administration rescinded a 2015 Obama-era WOTUS regulation and the U.S. Supreme Court in Rapanos and Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers (2001) found the pre-2015 regulations to be overly expansive, according to administrative law scholar Jonathan Adler. 

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In the states

Eviction bans continue across the states

What’s the story? 

The U.S. Supreme Court on August 26 struck down the Centers for Disease Control and Prevention’s (CDC) federal eviction moratorium but similar eviction bans issued in response to the coronavirus (COVID-19) pandemic remain in effect in cities and states across the country.

The following selected state and local jurisdictions had eviction bans in place as of September 13:

  • California’s eviction moratorium remains in effect until September 30. 
  • Illinois’ eviction moratorium expires on October 3. 
  • New Jersey’s eviction ban expires in January 2022. 
  • Washington D.C.’s eviction ban expires in January 2022.
  • New Mexico’s eviction moratorium does not have a set expiration date.
  • New York’s eviction moratorium expires in January 2022.
  • Washington’s eviction ban remains in effect under certain circumstances through October 15.

The above list is not comprehensive and additional eviction bans may remain in effect. State and local programs that aim to support renters seeking rental assistance, such as a Nevada policy that prohibits the eviction of tenants who have applied for rental assistance, may also function as de facto eviction bans.

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GAO report sheds light on federal agency use of facial recognition technology

An August 24 report from the U.S. Government Accountability Office (GAO) found that at least 18 federal agencies use facial recognition technology (FRT).

The GAO survey of 24 federal agencies revealed the following findings: 

  • Sixteen agencies stated that they use FRT for digital access or cybersecurity, including 14 agencies that use FRT for employees to unlock their agency-issued smartphones and two agencies that use FRT to control website access. 
  • Six agencies, including the Department of Homeland Security (DHS), Department of Justice (DOJ), and Department of Defense (DOD) reported using FRT for law enforcement purposes.
  • Five agencies reported using FRT for security purposes, such as controlling building access. 
  • Ten agencies planned to expand their use of FRT.

“It’s becoming increasingly important to get a more comprehensive understanding of the use of facial recognition technology across federal agencies,” Candice Wright, a director in GAO’s Science, Technology Assessment and Analytics Team, told Cox Media Group. “There’s certainly been a lot of advancements recently with facial recognition technology. It has been increasingly used for a range of purposes in both the commercial and government sectors.”

The report raised concerns among privacy advocates, including Adam Schwartz, senior attorney at the Electronic Frontier Foundation. “This technology is dangerous. It leads to people being falsely arrested, it invades our privacy, it deters people from going to protests,” Schwartz told Popular Mechanics. “The government should not be using it at all, so it is pretty sad to read that they’re actually expanding their use of it.”

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Regulatory tally

Federal Register

Office of Information and Regulatory Affairs (OIRA)

OIRA’s August regulatory review activity included the following actions:

  • Review of 37 significant regulatory actions. 
  • One rule approved without changes; recommended changes to 33 proposed rules; three rules withdrawn from the review process.
  • As of September 1, 2021, OIRA’s website listed 77 regulatory actions under review.
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U.S. Supreme Court releases December argument calendar

The Supreme Court of the United States (SCOTUS) on Sept. 20 released the December argument calendar for the 2021-2022 term, scheduling nine cases for argument. The court will hear nine hours of oral argument between Nov. 29 and Dec. 8. 

Click the links below to learn more about the cases:

Nov. 29

  1. Becerra v. Empire Health Foundation concerns the administrative state and involves whether anadministrative agency may issue arule based on an interpretation of a statute that a federal court concluded was not open to interpretation.

Nov. 30

  1. Cummings v. Premier Rehab concerns federal disability laws and whether they allow the petitioner to be awarded compensatory damages for emotional distress.
  2. American Hospital Association v. Becerra concerns the administrative state and involves whether theChevron deference doctrine permits theU.S. Department of Health and Human Services (HHS) to reduce the reimbursement rate the agency pays to certain hospitals for treating Medicare patients.

Dec. 1

  1. Dobbs v. Jackson Women’s Health Organization concerns a direct challenge to the Supreme Court’s rulings in Roe v. Wade (1973) and Planned Parenthood v. Casey (1992) and the constitutionality of a Mississippi state law prohibiting abortions after the 15th week of pregnancy except in cases of medical emergencies or fetal abnormalities.

Dec. 6

  1. Patel v. Garland concerns the jurisdiction of federal courts to hear appeals in immigration proceedings specifically related to judgments allowing the adjustment of immigration status from nonimmigrant to permanent resident.
  2. Hughes v. Northwestern University concerns Employee Retirement Income Security Act of 1974 (ERISA) defined-contribution retirement plans.

Dec. 7

  1. CVS Pharmacy, Inc. v. Doe concerns disability discrimination claims under the Rehabilitation and Affordable Care Acts.
  2. United States v. Taylor concerns theHobbs Act and the definition of a crime of violence under the law.

Dec. 8

  1. Carson v. Makin concerns public education funding, religious education, and the Supreme Court’s decision inEspinoza v. Montana Department of Revenue (2020).

To date, the court has granted review in 34 cases during the upcoming term. Five cases have not yet been scheduled for argument. Two cases were dismissed after they were accepted. 

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