Week in Review

IN THE NEWS

• President Donald J. Trump issued three memoranda aimed at addressing the economic consequences of the coronavirus pandemic. The first memorandum directed the Secretary of the U.S. Department of Education to provide deferments to student borrowers who face economic hardship, continue the cessation of student loan payments, and waive interest on student loans. The second memorandum directed the Secretary of the U.S. Department of Treasury to defer the withholding, deposit, and payment of payroll taxes. The third memorandum directed the Federal Emergency Management Agency to assist in providing funds from the Disaster Relief Fund to states, and asked states to use their Coronavirus Relief Fund allocations to provide economic assistance to unemployed Americans. Democrats criticized the memoranda as an ineffective patchwork of solutions and examples of executive overreach.
• President Trump issued an executive order directing the Secretary of Housing and Urban Development to identify sources of federal funds for eviction and foreclosure prevention programs. The order also directed the Secretary of the U.S. Department of the Treasury and Director of the Federal Housing Finance Agency to review existing resources that can be used to prevent evictions and foreclosures. In a statement, U.S. House of Representatives Speaker Nancy Pelosi (D-Calif.) and U.S. Senator Chuck Schumer (D-N.Y.) stated, “We’re disappointed that instead of putting in the work to solve Americans’ problems, the President instead chose to stay on his luxury golf course to announce unworkable, weak, and narrow policy announcements.”
• The U.S. Environmental Protection Agency (EPA) Administrator Andrew Wheeler announced two final rules for the oil and gas industry, rolling back Obama-era methane emissions standards and eliminating federal requirements that oil and gas companies install technology to detect and fix methane leaks. Wheeler praised the rules as the culmination of EPA’s work to “fulfill President Trump’s promise to cut burdensome and ineffective regulations for our domestic energy industry.” David Doniger, senior strategic director of the Natural Resources Defense Council, said EPA “has given the oil and gas industry a green light to keep leaking enormous amounts of climate pollution into the air,” and he added that the Council plans to challenge the rules in court.
• President Trump issued two executive orders that by their terms would prohibit any person from engaging in “transactions” after September 20 with the Chinese-owned parent companies of the mobile applications TikTok and WeChat. The orders seek to protect Americans from censorship and user data exploitation on mobile applications owned by companies based in China. Microsoft released a statement announcing that it is moving ahead with discussions to acquire TikTok’s North American business assets but will conduct a full security review to address the concerns the Trump Administration has raised. The orders followed the U.S. Senate’s unanimous approval of a bill prohibiting federal workers from using TikTok on government-issued devices and the U.S. Department of State’s expansion of the Clean Network Program, which seeks to decrease China’s influence on internet use and telecommunication.
• A San Francisco Superior Court judge held that Uber and Lyft must classify drivers as employees rather than independent contractors. California Attorney General Xavier Becerra sued Uber and Lyft in state court claiming the ride-share companies violated state law by misclassifying drivers as contractors, and sought an injunction to force a change in the drivers’ employment status. Becerra argued that drivers cannot be classified as independent contractors under California law because they are essential to the business model of Lyft and Uber. Although the court agreed with Becerra and rejected Uber and Lyft’s legal arguments, the companies reportedly intend to seek to override the court’s adverse decision by pushing for voter approval of Proposition 22, a ballot initiative that would amend California labor law to allow Uber and Lyft to continue treating drivers as independent contractors, maintaining the status quo. Dara Khosrowshahi, the CEO of Uber, threatened to shut down Uber operations in California until November when voters will have the chance to weigh in on Proposition 22.
• A federal judge ruled that a new U.S. Department of Education Title IX rule could go into effect on August 14 as ongoing legal challenges to the rule continue. The rule will regulate how recipients of federal financial assistance respond to sexual misconduct allegations by raising the standard for triggering investigations. Although the legal battle over the rule will continue despite it going into effect, Secretary of Education Betsy DeVos called the decision a victory that “reaffirms that students’ rights under Title IX go hand in hand with basic American principles of fairness and due process.” Former Vice President Joe Biden has reportedly vowed to reverse the rule if he becomes the next President.
• The U.S. Department of Energy proposed amending the existing definition of a showerhead to allow more water to pass through multiple water fixtures. The Energy Policy and Conservation Act required a maximum water use threshold of 2.5 gallons per minute applicable to any showerhead, and the Energy Department’s proposed amendment would modify the definition of showerhead to individual fixtures rather than collective fixtures. Andrew deLaski, the executive director for the Appliance Standards Awareness Project, reportedly criticized the proposed change, calling it “a gimmick to put multiple nozzles on a shower head,” stating that “there really is no good reason to reduce water and energy standards that have been around for 20 years.”
• In a rule amendment, the Federal Communications Commission removed a longstanding requirement that when a single owner controls multiple radio stations in the same area, no more than 25 percent of the content aired may overlap between the stations. The amendment is intended to help stations survive financially and represents a modernization of a rule adopted long before widespread internet use. Democratic Commissioner Geoffrey Starks criticized the amendment as a hasty oversimplification of the problem, writing in his partial dissent that “regulatory ‘modernization’ means more than just getting rid of rules.”
• The Federal Energy Regulatory Commission approved a regional grid operator’s proposal to classify large scale batteries and other energy storage facilities in the same category as power lines and transformer stations. As a result of the approval, Midcontinent Independent System Operator, which controls the electricity grid from Manitoba to Louisiana, is now the first of the six regional transmission organizations to classify energy storage solely as a transmission resource rather than a generation resource. This classification will allow energy storage developers to receive guaranteed cost recovery and avoid expensive interconnection regulations that only apply to electricity generators. Researchers at the Massachusetts Institute of Technology’s Energy Initiative have indicated that increased energy storage capacity will support the growth of renewable resources such as wind and solar energy.
• A federal district court held that the U.S. Department of the Interior’s interpretation of the Migratory Bird Treaty Act offended the Administrative Procedure Act, ruling in favor of environmental groups. The Migratory Bird Treaty Act protects migratory bird species native to the United States or its territories and penalizes companies who harm covered bird species. The Interior Department argued that this migratory bird law only applies when a company purposefully kills birds and does not prohibit the incidental killing of birds. The court found, however, that this interpretation violated the Administrative Procedure Act because it contradicted the purpose of the migratory bird law. Noah Greenwald, endangered species director at the Center for Biological Diversity, stated that “birds are in real trouble across the United States” and “we must do everything we can to ensure they continue to brighten our skies and sing to us in the morning.”

WHAT WE’RE READING THIS WEEK

• The U.S. Department of Justice released a report calling on the U.S. Congress to modernize the Administrative Procedure Act (APA), the 1946 law that governs the process by which executive agencies establish regulations. The report documents panel discussions the Justice Department held at a regulatory summit in 2019. The panel participants described how administrative agencies have changed since the APA was passed and suggests that the Trump Administration’s approach to the regulatory process should inform legislative revision. So far, the Trump Administration has apparently been unsuccessful in 23 of the 24 legal challenges alleging a violation of the APA, according to a New York University School of Law database.
• In an editorial for The Washington Post, the editorial board argued that Russian President Vladimir Putin’s announcement of the discovery and approval of an effective vaccine for COVID-19 risks losing public confidence. Because the Russian vaccine has not gone through rigorous clinical trials, the possibility of serious side effects or inability to protect against the virus could spark doubt as to the efficacy and safety of any COVID-19 vaccine. The editorial board emphasized the difficulty in inoculating potentially hesitant populations and feared that a failed vaccine rollout would only exacerbate anti-vaccine sentiment.
• In a recent National Bureau of Economic Research working paper, Isil Erel, a professor at the Ohio State University’s Fisher College of Business, and Jack Liebersohn, a professor at the University of California, Irvine, explored whether vulnerable consumers used fintech, such as online non-bank lenders, instead of banks to access loans from the Paycheck Protection Program. Erel and Liebersohn found that fintech was “disproportionately used in ZIP codes with fewer bank branches, lower incomes, and a larger minority share of the population.” Furthermore, Erel and Liebersohn found that consumers using fintech-enabled loans were in ZIP codes where banks were unlikely to originate loans, suggesting that fintech was serving the consumers who would otherwise not have access to a bank.

FLASHBACK FRIDAY

• In a 2019 essay in The Regulatory Review, then-series editor Benjamin Barsky analyzed an article published in the Boston University Law Review that considered whether the National Childhood Vaccine Injury Act adequately protects children from adverse health events related to vaccination. Barsky explains that the Act lacks sufficient punitive measures for health care providers who do not report adverse reactions to vaccination. Barsky also explained that the evidentiary and procedural requirements for patients who seek compensation for harm caused by vaccination are so difficult to meet that the overwhelming majority of injured patients are not compensated.