Week in Review

IN THE NEWS

• The U.S. Department of Justice issued a final rule that would ban bump stocks, devices allowing semiautomatic guns to fire more rapidly. Acting Attorney General Matthew Whitaker stated that the Justice Department is “faithfully following President Trump’s leadership by making clear that bump stocks, which turn semiautomatics into machine guns, are illegal.” Erich Pratt, executive director of Gun Owners of America, claimed that “courts should be highly suspect when an agency changes its ‘interpretation’ of a statute in order to impair the exercise of an enumerated constitutional right,” signaling the possibility of a challenge to the new rule.
• A federal judge struck down Justice Department policies that made it harder for victims of violence to seek asylum in the United States. Declaring the policies “unlawful,” Judge Emmet Sullivan of the U.S. District Court for the District of Columbia found that the Justice Department’s policies were “inconsistent with the intent of Congress” when it enacted the Immigration and Nationality Act. This decision follows the action by former Attorney General Jeff Sessions to overrule an immigration court decision granting asylum to a woman who fled domestic abuse in her home country, stating that asylum applicants had to show that their government “condoned” domestic or gang violence.
• A federal judge held that the Affordable Care Act (ACA) is unconstitutional as an improper exercise of the U.S. Constitution’s Commerce Clause and therefore must be invalidated. Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas reasoned that because the individual mandate had been repealed, the rest of the ACA must be invalidated because the individual mandate cannot be separated due to its “essential” function within the ACA. The U.S. Department of Health and Human Services said it “will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision.”
• U.S. Senators Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah) introduced the Sports Wagering Market Integrity Act of 2018, a bill intended to regulate sports betting. Senator Hatch stated that “sports betting is inevitable” and that the bill would provide that “betting is done right in the states that choose to legalize it.” The bill follows the Supreme Court’s decision in Murphy v. NCAA, which struck down the federal prohibition on state-authorized sports betting.
• After investigating Facebook’s internal documents, The New York Times alleged that Facebook broke its privacy agreements with users. According to The Times, Facebook allowed Amazon, Netflix, and other companies to read users’ private messages and their friend lists, even though CEO Mark Zuckerberg testified before Congress that users “have complete control” over what they share on the social media site. The Times raised the possibility that Facebook also violated an agreement with the Federal Trade Commission banning the company from sharing users’ information without their explicit consent. Separately, District of Columbia Attorney General Karl A. Racine sued Facebook for failing to protect users’ private information from third parties such as Cambridge Analytica.
• Governor Susana Martinez (R) of New Mexico issued an executive order requiring all proposed regulations and rule changes by state regulators to include a regulatory impact form describing the need for the rule, its expected impact, and what would happen without the rule. Governor Martinez stated the new requirement would “help regulators and the public better understand the impact” of proposed regulations. James Broughel, a senior research fellow at the Mercatus Center of George Mason University, reportedly praised the order as a way to cut down on “unnecessary rules” and help explain the consequences of proposed rules on ordinary people’s lives.
• For the second time, the National Labor Relations Board extended the comment period for its proposed rulemaking detailing the requirements for determining joint-employer status under the National Labor Relations Act. Under its proposed rulemaking, an employer must “possess and actually exercise substantial direct and immediate control over the essential terms and conditions of employment of another employer’s employees in a manner that is not limited and routine” to be considered a joint-employer. The comment period has been extended until January 14, 2019.
• The U.S. Food and Drug Administration (FDA) withdrew its 2013 proposed rule that was intended to “clarify procedures” for changing the labeling of an approved drug or biological product. To explain the withdrawal, FDA cited “concerns expressed by commenters and considerations” about FDA’s resources.
• Retaliatory tariffs by Mexico and China have significantly reduced U.S. cheese exports to those countries and driven down dairy prices, The Wall Street Journal reported this week. Due to the tariffs, approximately 1.4 billion pounds of American-made cheese have been placed in cold storage, “the biggest stockpile since federal record-keeping began a century ago.”

WHAT WE’RE READING THIS WEEK

• In an article for Forbes, Susan Dudley, director of the George Washington University Regulatory Studies Center, reviewed the major regulatory actions of 2018. Dudley observed that “agencies are issuing regulations at a significantly slower pace than in previous years” and that the Office of Information and Regulatory Affairs classified most of this year’s regulations as “deregulatory.” Dudley also noted, however, that new regulations were vulnerable to litigation for failure to follow the Administrative Procedure Act’s notice-and-comment provisions.
• The Internal Revenue Service (IRS) whistleblower program contains a “regulatory paradox,” wrote Jay R. Navanati in an article for The CPA Journal. Navanati argued that although one IRS regulation allows compensation of 15 to 30 percent for recoveries of greater than $2 million that are “based on” whistleblower information, a different IRS regulation only allows compensation for a tip that “substantially contributes” to IRS recovery efforts. Until the conflict is resolved by a court ruling, Navanati argued that whistleblowers face uncertainty about whether they will be compensated for aiding IRS investigations.
• What can bingo teach about gambling regulation? “Attention to bingo shows that standardized regulation, often derived from casinos, plays a key role in the erosion of local gambling cultures,” wrote Kate Bedford of the United Kingdom’s Birmingham Law School in an article for the Journal of Law and Social Policy. She found that casino-style, professionalization regulation has been a poor fit for bingo halls which, in contract to casinos, are characterized by trusting relationships between workers and the regulars for whom they have “genuine care and fondness.”