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?

• Administrative law judge
• Executive Order 13843
• Lucia v. SEC

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?

• Miguel Cardona
• Betsy DeVos
• Virginia Foxx

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?

• Noteworthy court announcements, U.S. Supreme Court’s October term 2020-2021
• Arbitrary-or-capricious test
• Matthew Kacsmaryk

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. 

Want to go deeper?

• Rosemary Marquez
• Sue and settle 
• Waters of the United States rule

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.

Want to go deeper?

• Changes to rent, mortgage, eviction, and foreclosure policies in response to the coronavirus (COVID-19) pandemic, 2020

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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.”

Want to go deeper? 

• Click here to read the full report.

Regulatory tally

Federal Register

• The Federal Register in August reached 48,884 pages. 
• The August Federal Register included 187 proposed rules and 290 final rules. These included the listing of the Franklin’s bumble bee as an endangered species and revisions to the U.S. Fish and Wildlife’s Service’s annual Federal Migratory Bird Hunting and Conservation Stamp Contest, among other regulations.
• Want to go deeper? 
  • Click here to find more information about weekly additions to the Federal Register in 2019, 2018, and 2017 
  • Click here to find yearly information about additions to the Federal Register from 1936 to 2019 

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.
• Want to go deeper? 
  • Every month, Ballotpedia compiles information about regulatory reviews conducted by OIRA. To view this project, visit: Completed OIRA review of federal administrative agency rules