Week in Review

IN THE NEWS

• The U.S. government shut down following Congress’ failure to pass a spending bill for 2019. Although a proposed spending bill passed the U.S. House of Representatives, the U.S. Senate could not agree on a proper level of spending for border security and wall funding. Mick Mulvaney, Director of the Office of Management and Budget, stated that he hopes “this lapse in appropriations will be of short duration,” but Speaker-designate Nancy Pelosi (D-Calif.) said that the shutdown is “plunging the country into chaos.”
• With a vote of 5-4, the U.S. Supreme Court declined to allow the Trump Administration to effect a rule that would restrict asylum eligibility to migrants who enter the United States through a designated port of entry. The U.S. District Court for the Northern District of California had blocked the rule from going into effect, finding that it conflicted with federal immigration law. The Administration had also appealed the district court’s ruling to the U.S. Court of Appeals for the Ninth Circuit, which also denied the Administration’s bid to implement its rule pending appeal.
• The Trump Administration filed a motion to dismiss a lawsuit brought in the U.S. District Court for the District of Maryland in August 2018 by four U.S. cities—Columbus, Ohio, Baltimore, Cincinnati, and Chicago—concerning the Affordable Care Act (ACA). The lawsuit alleged that the Trump Administration violated its duty to “faithfully execute” the ACA by “discouraging enrollment,” increasing costs, and “refusing to defend” the law. In its motion to dismiss, the Trump Administration argued that the court did not have authority to hear the case.
• The U.S. Environmental Protection Agency (EPA) proposed a rule that would modify existing regulations governing the management of liquids in municipal solid waste landfills. EPA stated that the modifications could produce cost savings and “more efficient” use of landfills, but the agency acknowledged there may be increased risks for groundwater contamination and also asked for comment on air emissions. Comments on the proposal will be accepted until March 26, 2019.
• The U.S. Transportation Security Administration (TSA) is reportedly adopting new procedures for air marshals—undercover agents posing as passengers on commercial flights. Although air marshals have usually occupied seats toward the front of the aircraft by the cockpit, TSA will now position marshals at the back end of the plane to better observe passengers. Air marshal Brian Borek, the air marshal representative to the Federal Law Enforcement Officers Association, and other commentators have reportedly criticized the move as “absolutely unnecessary,” claiming that the change “does not pass the common-sense test.”
• The U.S. Securities and Exchange Commission (SEC) issued its first fines against automated “robo” financial advisers for violating the Investment Advisers Act of 1940. The SEC found that robo-advisers Wealthfront and Hedgeable misled investors about aspects of their businesses, although neither company admitted to or denied wrongdoing. “All advisers must take seriously their obligations to comply with the securities laws,” said C. Dabney O’Riordan, a leader of a unit in the SEC Division of Enforcement.
• The U.S. District Court for the District of Columbia ordered CVS to operate the insurance business it acquired from Aetna separately from CVS’s pharmacy business while the court investigates the competitive effects of the companies’ $69 billion merger. In early December, Judge Richard J. Leon had decided to review the companies’ settlement with the Antitrust Division of the U.S. Department of Justice under the court’s Tunney Act authority.
• The Cyberspace Administration of China announced new regulations governing financial information service providers—entities similar to news agencies that publish financial news and information related to China. Among other requirements, the regulations would require financial information service providers to provide “traceable” sources of their information, “ensure that information is true, objective and legal,” and refrain from “distorting the state’s fiscal and monetary policies.” The new regulations will take effect on February 1, 2019.
• Japan announced its intent to withdraw from the International Whaling Commission (IWC) and to resume commercial whaling. Chief Cabinet Secretary Yoshihide Suga reportedly stated that whaling activities will only occur “within Japan’s territorial sea and its exclusive economic zone,” and that such activities will be in accordance with IWC limits. The move has faced criticism from around the world, with Michael Gove, UK Secretary of State for Environmental, Food and Rural Affairs, stating that he was “extremely disappointed” with Japan’s decision, and vowing that the UK “will continue to fight for the protection” of whales.

WHAT WE’RE READING THIS WEEK

• Four factors “are likely to slow” the Trump Administration’s deregulatory efforts, wrote Cheryl Bolen of Bloomberg. First, there are fewer cuts available to make. Second, the incoming Democratic House may use its oversight power to push back against agencies’ deregulatory actions. Third, courts have not been “sympathetic” to the “sloppy attempts by agencies to deregulate.” And fourth, the Administration may lack the manpower to deregulate because of a high number of vacancies in many executive positions, including the one created by the nomination of Office of Information and Regulatory Affairs Administrator Neomi Rao to the U.S. Court of Appeals for the District of Columbia Circuit.
• In an article for the Regulatory Studies Center at The George Washington University, Brian Mannix, a research professor at the Center, discussed the question of who pays if the government takes property to preserve an endangered species’ critical habitat under the Endangered Species Act. The question arose during oral arguments in the recent U.S. Supreme Court case Weyerhaeuser v. U.S. Fish and Wildlife Service, although Chief Justice John Roberts did not address the question in the final opinion. Mannix concluded that it is likely that the government would have to pay for the property and that an independent authority would be responsible for calculating the value.
• New payment technologies are taking hold in the European Union (EU), wrote Rory Copeland of Northern Ireland’s Queen’s University Belfast in an article for the Northern Ireland Legal Quarterly. Copeland wrote that faster, cheaper methods of payment and money transfers—such as Apple Pay and Venmo—offer consumers a wider variety of choices and that new payment service regulations are “facilitating alternatives to traditional banking in the EU payments industry.”