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.
In this month’s edition of Checks and Balances, we review the latest administrative law activity from the U.S. Supreme Court; the U.S. Department of Labor’s move to rescind a Trump-era rule on independent contractor classification; and a rulemaking transparency challenge before the U.S. Court of Appeals for the District of Columbia Circuit.
At the state level, we take a look at two stories out of Idaho. The first story examines the state legislature’s failure to reauthorize the state’s administrative rules for the third year in a row. In the second story, we review an executive order issued by the state’s lieutenant governor—and later revoked by the governor—banning mask mandates in the state.
We also highlight a new analysis that examines recent state legislative efforts to change the scope of executive emergency powers in the context of elections. As always, we wrap up with our Regulatory Tally, which features information about the 157 proposed rules and 230 final rules added to the Federal Register in May and OIRA’s regulatory review activity.
SCOTUS permits challenges to IRS mandates, declines case on HHS restrictions
What’s the story? The U.S. Supreme Court took action on two administrative law cases since our last edition.
In the first case, CIC Services v. Internal Revenue Service (IRS), the unanimous court on May 17 held that the Anti-Injunction Act—a federal law barring lawsuits to prevent the assessment or collection of taxes—did not prevent CIC Services from challenging an IRS regulatory mandate.
CIC Services, a risk management consulting firm, challenged a notice from the IRS that broadened the scope of information reported by taxpayers and imposed penalties for noncompliance. CIC Services sought to prevent the IRS from enforcing the change, arguing that the notice violated the Administrative Procedure Act (APA) because it should have been issued as a legislative rule, among other claims. The lower courts, without addressing the regulatory challenge, claimed that the AIA prevented them from hearing the case because the regulatory mandate pertained to the assessment and collection of taxes.
The Supreme Court reversed and remanded the lower court’s ruling. Justice Elena Kagan delivered the opinion of the court, arguing that a “suit to enjoin a requirement to report information is not an action to restrain the ‘assessment or collection’ of a tax, even if the information will help the IRS collect future tax revenue.” Kagan’s distinction clarified that the AIA does not block Article III challenges to such reporting requirements.
The court on May 17 dismissed the second case, American Medical Association v. Becerra, in which plaintiffs argued that the U.S. Department of Health and Human Services (HHS) violated the Administrative Procedure Act (APA) and federal healthcare laws when it issued a 2019 rule that placed abortion-related restrictions on federally funded healthcare providers.
The court declined to hear the case because the Biden administration stated that it was already in the process of changing the regulation through notice-and-comment rulemaking. HHS aims to have a new rule published in late 2021.
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Labor Department rescinds Trump-era gig worker rule
What’s the story? The U.S. Department of Labor on May 6 rescinded the Trump administration’s Independent Contractor Rule, which would have made it easier for employers to classify workers as independent contractors rather than employees.
The Trump-era rule replaced guidance issued during the Obama administration that put forth a six-factor test to determine worker classification. By weighing all six factors equally, the guidance favored employee over independent contractor classification, according to Forbes. The Trump administration’s rule comprised five similar factors but gave two core principles—the extent of employer control over an individual’s work and the individual’s opportunity for profit and loss—greater weight, facilitating independent contractor classification.
The DOL stated that it rescinded the rule in order to help guarantee minimum wage and overtime protections for workers under the Fair Labor Standards Act (FLSA), which do not apply to independent contractors. The move also aims to facilitate worker access to unemployment insurance, workers compensation, and employer-provided fringe benefits (such as health insurance), according to the department.
“By withdrawing the Independent Contractor Rule, we will help preserve essential worker rights and stop the erosion of worker protections that would have occurred had the rule gone into effect,” US Secretary of Labor, Marty Walsh, said in a statement.
The Financial Services Institute joined the Coalition for Workforce Innovation, Associated Builders and Contractors of Southeast Texas, and Associated Builders and Contractors Inc. in a lawsuit challenging the rule’s withdrawal, arguing that the DOL acted in an arbitrary manner when it delayed and later withdrew the rule. The groups claim that the rule “provided much needed guidance and clarification of an issue that the Department itself acknowledged to have become fraught with litigation and inconsistent application of classification standards under the FLSA.”
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D.C. Circuit considers rulemaking transparency challenge
What’s the story? A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit on May 10 heard oral arguments in Milice v. Consumer Product Safety Commission, a transparency case that questions whether federal agencies can adopt rules citing safety standards that are not publicly available.
Petitioner Lisa Milice alleged that the Consumer Product Safety Commission’s (CPSC) 2019 rule regarding manufacturing standards for infant bath seats used private industry safety standards without making those standards available to the public. ASTM International, the standards developer, charged $56 to view the standards referenced in the rulemaking.
The agency claimed that federal law allows it to promulgate rules that incorporate private industry standards by reference—a process that allows agencies to publish rules that cite material published elsewhere. ASTM International claimed that it generally makes standards referenced in federal rules publicly available, but that it was unaware of the rulemaking at the time.
Milice’s attorney, Jared McClain, argued that the CPSC must vacate the rule because the agency unlawfully failed to make the safety standards reasonably available to the public. “We think that reasonable availability means it must be published somewhere in the public domain,” McClain said.
Judges Judith Rogers, Patricia Millett and Robert Wilkins expressed concern about the lack of public availability of safety standards in the CPSC rulemaking. The judges questioned Milice’s standing to bring the case since she did not submit a comment to the agency during the rule’s comment period, but also pressed the CPSC on how Milice could have commented on the rule without access to the safety standards.
Want to go deeper?
- Incorporation by reference
- United States Court of Appeals for the District of Columbia Circuit
- Patricia Millet
- Judith Rogers
- Robert Wilkins
In the states
Idaho lawmakers fail to reauthorize administrative rules
What’s the story? Idaho lawmakers for the third straight year failed to pass legislation to reauthorize the state’s administrative rules for the next fiscal year.
Idaho law requires the state legislature to reauthorize all of the state’s administrative rules each year. Idaho House of Representatives Speaker Scott Bedke (R) told the Idaho Press that the failure to reauthorize the state’s administrative rules stemmed from a debate between House and Senate leaders over the current legislative practice allowing one chamber, rather than both, to approve or reject a policy-related rule. Bedke and others argue that consent from both chambers should be required.
“Both the House and the Senate chose just not to take it up, and there we are,” said Bedke. “It is unfinished business.”
In order to keep the state’s regulations in effect beyond July 1, the executive branch plans to re-publish thousands of pages of administrative rules as temporary rules. The temporary reauthorization will allow lawmakers to review the rules again in the 2022 legislative session.
Governor Brad Little (R) in 2019 directed a rules review process that revised or eliminated roughly 75% of the state’s administrative code after the state legislature failed to reauthorize the state’s administrative rules. When the state legislature did not act to reauthorize the rules again in 2020, Little proposed that one-fifth of the state’s administrative rules, rather than all rules, should expire each year, allowing lawmakers time to perform more in-depth reviews. Lawmakers’ inaction in 2021 delayed implementation of Little’s proposal.
Want to go deeper?
- Read more about this story in the May 2019, June 2019, and August 2019 editions of Checks and Balances
- Idaho State Legislature
- Scott Bedke
Idaho governor rescinds lieutenant governor’s order banning mask mandates
What’s the story? Idaho Governor Brad Little (R) on May 28 rescinded an executive order issued in his absence by Lieutenant Governor Janice McGeachin (R) that banned mask mandates in the state. Little called McGeachin’s executive order an “irresponsible, self-serving political stunt” that, in his words, “amounts to tyranny—something we all oppose.”
McGeachin issued the executive order on May 27 in her capacity as acting governor while Little traveled to a conference out of state. The order prohibited state and local government entities from issuing mask mandates in order to mitigate the spread of contagious diseases, such as COVID-19.
In a statement posted to her gubernatorial campaign website, McGeachin claimed that she signed the order, “to protect the rights and liberties of individuals and businesses by prohibiting the state and its political subdivisions—including public schools—from imposing mask mandates in our state.”
Little told the Idaho Capital Sun that McGeachin issued the executive order without his knowledge or approval. He rescinded the executive order the following day.
“Taking the earliest opportunity to act solitarily on a highly politicized, polarizing issue without conferring with local jurisdictions, legislators, and the sitting Governor is, simply put, an abuse of power,” said Little in a statement.
Idaho Chief Deputy Attorney General Brian Kane on May 28 issued an opinion stating that, in his view, McGeachin’s executive order exceeded her authority as acting governor. “Oddly, it seems to have been issued in an effort to undermine the existing authorities of the state and its political subdivisions to issue mask mandates,” wrote Kane. “This executive order appears to run counter to both the Idaho Constitution and the Governor’s statutory executive order authority.”
McGeachin on May 19 announced her candidacy for Idaho governor in the 2022 election. Little, a first-term governor, had yet to announce whether he will run for reelection as of June 3. The Idaho governor and lieutenant governor are elected separately and do not run on a joint ticket
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State lawmakers address emergency election powers
The National Conference of State Legislatures (NCSL) issued a new report examining state-level responses to emergency powers yielded by executive branch actors during the coronavirus pandemic. The report in particular examines legislative efforts by state lawmakers to address the scope of executive emergency powers in the context of state elections. The report divided the legislation into two categories: bills that would limit executive branch emergency powers over elections and bills that would expand executive branch emergency powers over elections.
Eighteen of the 20 bills aiming to address emergency powers over elections would limit executive authority to make changes to electoral processes, such as suspending election laws or changing access to polling locations. The majority of these bills were pending as of the April report, but two bills in North Dakota had failed and two bills (one in Ohio and one in Kentucky) had passed.
The remaining two bills would expand the executive branch’s emergency powers over elections. Legislation pending in New York would authorize the governor to delay or suspend elections while a bill in North Carolina would expand the state election chief’s authority to conduct elections when emergencies disrupt normal schedules.
“The COVID-19 pandemic has clearly intensified tensions between the executive and legislative branches,” said NCSL’s legislative oversight expert, Pam Greenberg. “Lawmakers are taking action this year to ensure their fundamental role in future emergencies.”
Want to go deeper?
- Click here to read the full report.
- The Federal Register in May reached 29,172 pages.
- The May Federal Register included 157 proposed rules and 230 final rules. These included solar energy systems requirements at airports and COVID-19 vaccine requirements for long-term care facilities, among other regulations.
- Want to go deeper?
OIRA’s May regulatory review activity included the following actions:
- Review of 35 significant regulatory actions.
- Five rules approved without changes; recommended changes to 30 proposed rules.
- As of June 1, 2021, OIRA’s website listed 56 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