Author

Jace Lington

Jace Lington is a staff writer at Ballotpedia and can be reached at jace.lington@ballotpedia.org

U.S. Supreme Court declines to hear challenge to Chevron deference in UPS case

A fight between UPS and Amazon over how a federal agency determines shipping costs will not proceed to the U.S. Supreme Court. On May 20, 2019, the U.S. Supreme Court declined to hear a case that challenged giving Chevron deference to the way the Postal Regulatory Commission (PRC) sets package delivery prices. UPS argued that the D.C. Circuit made a mistake in its May 22, 2018, opinion applying the Chevron doctrine to uphold the formula used by the PRC to set postal rates for deliveries of packages.
 
 
The Chevron doctrine is an administrative law principle that compels federal courts to defer to a federal agency’s interpretation of an ambiguous or unclear statute that Congress delegated to the agency to administer. The principle derives its name from the 1984 U.S. Supreme Court case Chevron v. Natural Resources Defense Council.
 
In its 267-page petition, UPS asked the U.S. Supreme Court to reconsider the Chevron doctrine in light of the following criticisms:
  • “It threatens the proper separation of powers by shifting legislative and judicial responsibilities to executive agencies”
  • “There is no legal basis for the assumption that Congress implicitly delegates interpretive authority to agencies”
  • “Chevron (with its attendant limitations) is enormously difficult to apply in practice.”
  • “Several Justices have recognized that this powerful criticism warrants a reconsideration of Chevron by the Court.”
In its 2018 ruling, the D.C. Circuit held that the PRC formula was based on a permissible interpretation of an unclear part of the 2006 Postal Accountability and Enhancement Act (Accountability Act). The court said that the agency interpretation was consistent with longstanding practice stretching back to 1975. Under Chevron, courts defer to reasonable agency interpretations of ambiguous laws.
 
 
Additional reading:
 
Text of UPS’ petition for a writ of certiorari:
 
Text of the D.C. Circuit Decision:


U.S. Senators Lankford (R-Okla.) and Sinema (D-Ariz.) propose giving the public early access to the rulemaking process

A proposed bill would require agencies to request written feedback from interested people regarding new major rules earlier in the regulatory process. Senators James Lankford (R-Okla.) and Kyrsten Sinema (D-Ariz.) introduced Senate Bill 1419, the Early Participation in Regulations Act, on May 13, 2019. The act requires agencies to issue advance notices that they will be proposing a rule at least 90 days before the agency publishes the proposed rule in the Federal Register.
 
The act states that advance notices have to provide time for interested people to submit their views to the agency in writing and have to include the following:
  • The nature of the problem the agency plans to address with a new major rule
  • The data the agency expects to use to formulate the rule
  • A description of the regulatory alternatives the agency is considering
  • The legal authority under which the major rule may be proposed
  • An achievable objective for the major rule
S. 1419 follows other federal standards and defines major rules as those that have or are likely to have the following results:
  • An annual effect on the economy of $100 million or more
  • A major increase in costs or prices for consumers, individual industries, government agencies, or geographic regions
  • Significant effects on competition, employment, investment, productivity, innovation, health, safety, the environment, or on the ability of U.S.-based enterprises to compete with foreign-based enterprises in domestic and export markets
Rules that do not require published notices of proposed rulemaking (NPRM) in the Federal Register are not subject to the act. Those exempted rules include guidance documents, which are interpretive rules, policy statements, and agency rules of organization. Beyond guidance, agencies can choose not to publish NPRMs for new rules if they find good cause and explain their reasoning in the rule they issue. Finally, if the administrator of the Office of Information and Regulatory Affairs (OIRA) determines that compliance would not serve the public interest or would be too burdensome and redundant based on the requirements of other laws, then the agency does not have to publish an advance notice of proposed rulemaking (ANPRM) under the act. OIRA is an office within the Office of Management and Budget (OMB) that handles regulatory review, information collection requests, and oversight of government statistics and privacy policies.
 
 
Additional reading:
 
Text of S.1419 (The Early Participation in Regulations Act):
 
 


U.S. Senators Sinema (D-Ariz.) and Lankford (R-Okla.) propose requiring agencies to perform retrospective reviews of regulations

A new bill aims to help administrative agencies meet regulatory goals by requiring them to assess the effectiveness of new major rules. Senate Bill 1420, The SMART Act of 2019, would require agencies to publish ideas about how to measure the anticipated benefits of new major rules, including how to collect the necessary data to conduct such a review. Senators Kyrsten Sinema (D-Ariz.) and James Lankford (R-Okla.) introduced the bill on May 13, 2019.
 
The act instructs agencies to perform cost-benefit reviews of major rules to determine whether they are accomplishing their objectives, are no longer necessary, or need to be improved. It follows other federal standards and defines major rules as those that have or are likely to have the following results:
  • An annual effect on the economy of $100 million or more
  • A major increase in costs or prices for consumers, individual industries, government agencies, or geographic regions
  • Significant effects on competition, employment, investment, productivity, innovation, health, safety, the environment, or on the ability of U.S.-based enterprises to compete with foreign-based enterprises in domestic and export markets
The provisions of the SMART act apply to rules that meet those criteria as determined by the administrator of the Office of Information and Regulatory Affairs (OIRA). OIRA is an office within the Office of Management and Budget (OMB) that handles regulatory review, information collection requests, and oversight of government statistics and privacy policies. The act exempts guidance documents, which include interpretive rules, policy statements, and agency rules of organization, from its review requirements.
 


Bill restructuring the way small business regulations are considered introduced in the Senate

A new bill restructuring the way small business regulations are considered was introduced in the Senate on May 7, 2019. The Prove It Act (PIA), introduced by U.S. Senators Joni Ernst (R-Iowa) and Kyrsten Sinema (D-Ariz.), would allow the Small Business Administration (SBA) to require agencies to reconsider findings claiming new regulations would not affect small businesses. The bill would amend the Regulatory Flexibility Act (RFA), a 1980 law that requires federal agencies to consider the effects of potential regulations on small businesses, nonprofits, and local governments.
 
Under the existing RFA, an agency can avoid publishing detailed analyses of the potential effects of a regulation if the agency head certifies that the regulation will not impose significant economic costs on a substantial number of small entities. The PIA would allow the SBA to challenge potential regulations before they go into effect by asking agencies to reconsider their conclusions about the effects of new regulations on small businesses.  The PIA would also require agencies to conduct a full analysis of proposed rules if the agency determines that an initial certification was incorrect.
 
According to Senator Ernst, the bill would give the “small business community the opportunity to send agencies back to the drawing board to ‘prove’ that what they’re proposing won’t hurt small businesses.” Under the PIA, SBA requests for agency reconsiderations would be published in the Federal Register, but the agency would still decide whether the original agency conclusions were correct and supported by facts.
 
You can read more about the RFA and SBA and here:
 
Additional reading:


Final rule to require drug price disclosure in TV ads

A new rule requires pharmaceutical companies to include the list price of some prescription drugs in television advertisements. The requirement applies to medicines covered by Medicare or Medicaid dollars, according to a final rule published by the Centers for Medicare & Medicaid Services (CMS) on May 10, 2019.
 
The agency intends for the rule to make Medicare and Medicaid administration more efficient by giving beneficiaries of the programs more information about the costs of drugs, according to the summary of the final rule published in the Federal Register.
 
The CMS final rule aims to make drug prices more transparent and “is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” according to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar. The rule requiring companies to disclose prices in TV ads is part of a broader Trump administration plan aimed at reducing prescription drug prices. CMS argues that the new rule will use public scrutiny to pressure manufacturers into lowering drug prices and will equip patients to make more informed healthcare decisions.
 
Several public comments submitted to CMS before it finalized the rule argued that the proposal went beyond the agency’s authority under the Social Security Act. The commenters said that the provisions within the Social Security Act interpreted by CMS in the final rule are general housekeeping measures and “not broad delegations of authority.” CMS responded by arguing that the law empowers the secretary of HHS to issue “regulations as necessary for the efficient administration of Medicare and Medicaid.” The agency argued that the pricing disclosure requirements are acceptable since Secretary Azar determined that they were necessary to carry out the administration of Medicare and Medicaid.
 
The final rule is effective on July 9, 2019.
 
The Federal Register is a legal newspaper that contains proposed and finalized agency rules and regulations in addition to policy statements, interpretations of existing rules, and presidential documents like executive orders.
 
A final rule, in the context of administrative rulemaking, is a federal administrative regulation that went through the proposed rule and public comment stages of the rulemaking process and is published in the Federal Register with a scheduled effective date. The published final rule marks the last stage in the rulemaking process and includes information about the rationale for the regulation as well as any necessary responses to public comments.
 


President Trump seeks stricter asylum procedures in new memo

President Donald Trump issued a presidential memorandum directing the attorney general and the secretary of homeland security to propose regulations to, according to the President, “strengthen asylum procedures to safeguard our system against rampant abuse of our asylum process.”
 
The memo, issued on April 29, 2019, gives the Department of Justice and the Department of Homeland Security 90 days to propose regulations that would do the following:
  • Clarify which laws apply to asylum applicants in different circumstances
  • Ensure that all asylum applications, excluding appeals, receive final adjudication within 180 days
  • Set an application fee that does not exceed the costs of asylum adjudication
  • Set an application fee for initial employment authorization while the asylum claim is pending
  • Prevent people who have entered, or attempted to enter, the U.S. unlawfully from receiving employment authorization
  • Ensure immediate revocation of employment authorization for applicants denied asylum or under a final order of removal
The memo also directs the secretary of homeland security to prioritize adjudicating asylum claims and enforcing immigration laws when making staff assignments.
 
You can read more about adjudication and presidential memoranda here:
 
Additional reading:
 
Trump’s Memo:


Second federal judge blocks Trump administration restrictions on abortion access

U.S. District Judge Michael McShane issued a nationwide preliminary injunction to block a rule issued by the U.S. Department of Health and Human Services (HHS) aimed at keeping Title X fund recipients from engaging in abortion-related activities. McShane’s ruling follows a similar decision made by Judge Stanley Bastian in the Eastern District of Washington, who granted an injunction on April 25, 2019. Preliminary injunctions keep new rules from going into effect while courts decide how to resolve legal challenges brought against them. In this case, HHS issued a final rule prohibiting the use of Title X funds to perform, promote, or refer to abortion as a family planning method. The rule also requires clear financial and physical separation for clinics conducting Title X and non-Title X activities.
 
McShane’s order, issued on April 29, 2019, came down four days before the HHS rule was supposed to go into effect. He argued that the rule is “a solution in search of a problem” and that “[a]t worst, it is a ham-fisted approach to health policy that recklessly disregards the health outcomes of women, families, and communities.” He also held that the people challenging the rule raised serious claims that the rule was arbitrary and capricious. The arbitrary-or-capricious test comes from Administrative Procedure Act (APA), which requires courts reviewing agency decisions to rule against actions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
 
Judge McShane said that a previous version of the HHS rule survived a challenge at the U.S. Supreme Court in the 1991 case Rust v. Sullivan. There, the court applied the Chevron doctrine and held that the HHS interpretation of Title X reflected a plausible reading of the law and must be upheld. Under the Chevron doctrine, federal courts defer to agency interpretations of ambiguous laws that Congress empowers the agency to implement.
 
However, McShane held that post-Rust actions by Congress and HHS changed the way courts should approach the issue. He ruled that “HHS must do more than merely dust off the 30-year old regulations and point to Rust.” He said, “That HHS appears to have failed to seriously consider persuasive evidence that the Final Rule would force providers to violate their ethical obligations suggests that the rule is arbitrary and capricious.”
 
You can read more about Chevron deference here:
 


Federal judge blocks Trump administration restrictions on abortion access

U.S. District Judge Stanley Bastian issued a preliminary injunction to block a new Trump administration rule aimed at keeping Title X fund recipients from engaging in abortion-related activities. Preliminary injunctions keep a new rule from going into effect while a court decides how to resolve legal challenges brought against it. In this case, the U.S. Department of Health and Human Services (HHS) issued a final rule prohibiting the use of Title X funds to perform, promote, or refer for abortion as a family planning method. The rule also requires clear financial and physical separation for clinics conducting Title X and non-Title X activities.
 
Judge Bastian argued that his injunction was appropriate because the plaintiffs in the case presented facts and arguments supporting the claims that the rule would violate existing laws and regulations, was made in violation of the Administrative Procedure Act (APA), and would cause Title X fund recipients to suffer irreparable harm. Bastian also said that the state of Washington showed that it stood to lose over $28 million dollars in savings because “it is not legally or logistically feasible for Washington to continue accepting any Title X funding subject to the Final Rule.” He said one of the plaintiffs, the National Family Planning & Reproductive Health Association, represents over 65 Title X grant recipients and that many members of their network would leave once the final rule went into effect, “thereby leaving low-income individuals without Title X providers.” The Title X rule is scheduled to go into effect on May 3, 2019, and more lawsuits against the rule are pending in other courts.
 
Judge Bastian devoted most of his analysis to the likely effects of the final rule, but his order granting the injunction also mentions the arbitrary-or-capricious test. Under the APA, courts reviewing agency decisions must rule against actions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. The people challenging the rule argued that it was “arbitrary and capricious because it reverses long-standing positions of the Department without proper consideration of sound medical opinions and the economic and non-economic consequences.”
 
Additional reading:


Federal judge to block Trump administration restrictions on abortion access

U.S. District Judge Michael McShane said he would issue a preliminary injunction to block a new Trump administration rule aimed at keeping Title X fund recipients from engaging in abortion-related activities, according to Maxine Bernstein at The Oregonian. Bernstein also reported that McShane called the Department of Health and Human Services (HHS) rule a “ham-fisted approach to public health policy” in remarks following oral argument on April 23. The rule is scheduled to go into effect on May 3, 2019, and more lawsuits against the rule are pending in other courts. McShane “isn’t certain how many jurisdictions the injunction will cover,” according to the Portland Mercury.
 
In this case, attorneys general from 20 states and the District of Columbia joined together to sue the Trump administration. The final rule issued by HHS prohibits using Title X funds to perform, promote, or refer for abortion as a family planning method. The rule also requires clear financial and physical separation for clinics conducting Title X and non-Title X activities.
 
Supporters say the new rule updates Title X regulations to bring them in line with congressional intent not to support abortion with those funds. Opponents of the new Title X rule call it a gag rule because it prohibits fund recipients from referring patients for abortion services.
 
The U.S. Supreme Court upheld a similar rule in the 1991 case Rust v. Sullivan, but the rule never went into effect once Bill Clinton became president. In response to the federal government’s attorney citing Rust, Judge McShane asked whether the rule would bring about good health outcomes, according to Bernstein’s reporting.
 
A final rule, in the context of administrative rulemaking, is a federal administrative regulation that went through the proposed rule and public comment stages of the rulemaking process and is published in the Federal Register with a scheduled effective date. The published final rule marks the last stage in the rulemaking process and includes information about the rationale for the regulation as well as any necessary responses to public comments.
 


Idaho governor targets regulatory costs with two executive orders

Idaho Governor Brad Little signed two executive orders in January 2019 aimed at reducing state regulations on businesses and individuals in Idaho. He said that the orders would “help simplify Idaho state government and make it more accountable to citizens.”
 
The first executive order, the Licensing Freedom Act of 2019 (LFA), makes changes to the way Idaho implements and maintains occupational licenses. The LFA establishes a sunset rule that requires a regular gubernatorial review of every licensure requirement to determine whether those requirements still serve the public interest. The LFA also creates a list of sunrise factors that the governor and executive departments must consider with the legislature in order to impose new regulations on businesses, professions, or occupations.
 
The second executive order, called the Red Tape Reduction Act (RTRA), requires the state Division of Financial Management to submit annual reports detailing efforts to eliminate regulations and to streamline state government. In addition, the RTRA changes the procedures for proposing new rules through the 2021 fiscal year. First, state agencies must submit a statement identifying the impact that a new rule would have on individuals and small businesses. Second, agencies must name at least two existing rules to repeal or simplify or they must give reasons why existing rules cannot be simplified or removed. This requirement is similar to President Donald Trump’s Executive Order 13771, which requires federal agencies to eliminate two old regulations for every new regulation they issue.
 


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