Week in Review

IN THE NEWS

• The U.S. Supreme Court unanimously ruled that Guam is not prevented from seeking compensation from the U.S. Navy under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to finance the cleanup of a landfill that the Navy created and used for decades. The decision follows a lawsuit filed in 2002 by the U.S. Environmental Protection Agency (EPA) claiming that Guam violated the Clean Water Act by allowing the landfill to contaminate a nearby river. Guam settled the case and subsequently sued the Navy in an attempt to recoup the $160 million of cleanup costs. Justice Clarence Thomas, writing for the Court, held that Guam’s previous settlement with EPA would not prohibit Guam from seeking contribution from the Navy for the cleanup under CERCLA. Attorney Joseph Diedrich stated that the ruling ensures “that the United States cannot use its dual role as both regulator and responsible party to cleverly evade liability.”
• The Federal Aviation Administration (FAA) issued a final rule that will create a database of pilot records. FAA Administrator Steven Dickson credited the families and friends of the victims of the 2009 Colgan Air Flight 3407 crash for advocating a series of airline safety reforms, including the new database rule. The pilot of the 2009 Colgan Air Flight 3407 had failed several FAA checks prior to the crash, but such information, which would have likely disqualified the pilot from the role, was not known to the airline at the time. The rule will require airlines and related entities to review information in the database as part of their new pilot hiring processes. The database will aggregate different sources of information on individual pilots, including their flight records and state driving records, into a single location.
• The U.S. Fish and Wildlife Service released a proposed rule that would list two groups of lesser prairie chickens under the Endangered Species Act. The listing would designate one group of the birds as threatened and the other as endangered, which could impose new restrictions on development in the lesser prairie chickens’ habitat. These restrictions could lead to repercussions for the oil and gas industry because the potentially protected lesser prairie chickens reside on land that is rich in fossil fuels. The proposed rule is consistent with other recent environmental actions taken by the Biden Administration to reverse environmental policies imposed under the prior administration.
• Following the temporary shutdown of the Colonial Pipeline due to a cyberattack, the U.S. Department of Homeland Security (DHS) announced that it will issue a security directive requiring major pipeline companies to report possible or existing cybersecurity incidents. The directive will also require pipeline companies to audit their current cybersecurity practices, diagnose any cybersecurity shortcomings, and elect a cybersecurity coordinator. DHS Secretary Alejandro Mayorkas noted that the Colonial Pipeline cyberattack illustrates that pipeline security is “critical to our homeland security.”
• The American Civil Liberties Union (ACLU) filed a lawsuit challenging Arkansas’s recently passed law banning gender-affirming treatment for transgender youth. Arkansas’s law, the Save Adolescents from Experimentation Act, prohibits people under the age of 18 from accessing puberty blockers, cross-hormone therapy, or gender transition procedures. Arkansas Governor Asa Hutchinson vetoed the bill, stating that the bill set “new standards of legislative interference with physicians and parents as they deal with some of the most complex and sensitive matters involving young people.” The Arkansas legislature, however, overruled Hutchinson’s veto. Holly Dickinson, executive director of the ACLU of Arkansas, noted that the Act, which is slated to go into effect July 28, “would be devastating to trans youth and their families, forcing many to uproot their lives and leave the state to access the gender-affirming care they need.”
• Washington, D.C. filed an antitrust lawsuit against Amazon alleging that the company used anti-competitive pricing agreements with third-party sellers that artificially increased prices and limited consumer choice. Apparently, the pricing agreements prohibited third party sellers from offering their products at a lower price on any competing website, including the seller’s own website. Professor Herbert Hovenkamp of the University of Pennsylvania Law School explained that the scope of the judgment from the suit would only cover D.C. because it was filed under D.C. law, as opposed to federal law. D.C.’s Attorney General Karl Racine noted that other states could join in the suit.
• The U.S. Department of the Interior, the U.S. Department of Defense, and the state of California announced plans to create offshore wind developments near California’s northern and central coasts. The Interior and Defense Departments located coastal areas for the development that would not interfere with the Defense Department’s “military testing, training and operations.” California Governor Gavin Newsom praised the development, stating that it could supply “clean power for up to 1.6 million homes over the next decade.” Environmental groups, however, stressed that regulatory protections for marine ecosystems must accompany the growth of offshore wind developments.
• EPA announced the signing of an agreement between the United States and Mexico created to protect the environment and public health around the countries’ shared border, to be carried out through each country’s laws and regulations and through cooperation of local communities along the border. The United States and Mexico set four goals in the agreement: reducing air pollution, improving water quality, promoting sustainable materials and waste management, and enhancing joint preparation for and response to environmental emergencies. EPA Administrator Michael Regan stated that the agreement marked both countries’ “shared commitment to tackle the urgent environmental issues of our time.”

WHAT WE’RE READING THIS WEEK

• In an article in the Yale Journal on Regulation, Susan Benesch, a faculty associate at Harvard University, argued that social media companies, such as Facebook, should use international human rights law to improve their internal controls on speech. Benesch asserted that social media sites play a large role in overseeing online communications yet have discretion to create their own rules, which are then unevenly enforced and sometimes undisclosed to the public. Benesch proposed that companies use international speech guidelines to write rules that can be understood by the public, noting that  international guidelines would only permit censorship of social media users if content removal was the least restrictive way of preserving a legitimate end, such as public health. Finally, Benesch recommended that social media companies adhere to international prohibitions against war propaganda and “incitement to discrimination, hostility, or violence,” although these concepts need to be clarified for efficient applicability.
• In a recent report by the U.S. Public Interest Research Group, Bryn Huxley-Reicher, Brynn Furey, and Johanna Neumann argued that, although America’s electricity system is becoming increasingly powered by clean energy, buildings used for homes and businesses still heavily rely on fossil fuels for heat, hot water, and other energy needs. Huxley-Reicher, Furey, and Neumann argued that converting these buildings to run entirely on electricity will conserve energy, prevent pollution, and can lead to lower lifetime costs for consumers. Huxley-Reicher, Furey, and Neumann suggested that state and local authorities should promote building electrification by establishing incentives for current buildings to switch from fossil fuels to electric and by requiring all new buildings to use fully electric systems for all new buildings.
• In a recent report, Greg Gelzinis, associate director for Economic Policy at the Center for American Progress, argued that financial regulators should use capital requirements, which are the rules for how much capital financial institutions must retain, to manage the risks climate change poses to the stability of the economy. Gelzinis recommended five actions that can be taken under the existing statutory authority, including changes to stress testing, which is a process that involves analyzing whether a bank would have sufficient capital to withstand adverse hypothetical scenarios. Gelzinis proposed using climate-related stress tests to analyze how banks would weather adverse climate events in the long-term, as well as including near-term climate-related variables in existing stress testing requirements. Gelzinis concluded that “the capital framework is a core element of banking regulation” and should be at the center of the regulators’ efforts in addition to other possible measures to address climate-related financial risk, such as including climate risks in fiduciary requirements.

FLASHBACK FRIDAY

• In an essay in The Regulatory Review, Professor Cary Coglianese of the University of Pennsylvania and Sierra Blazer, now an associate at Kirkland & Ellis, argued that the Federal Aviation Administration should impose a rule that requires aircraft manufacturer CEOs to sign off personally on airplane safety certifications. Coglianese and Blazer argued that imposing safety certification requirements on CEOs for inaccurately reporting the safety of airplanes would create accountability “at the very top of the organization” and encourage CEOs to inspect aircraft safety more carefully. Coglianese and Blazer acknowledged that, although CEOs may not have the time or knowledge to approve complex aircraft safety testing, they should still be responsible for overseeing safety examinations just as CEOs are responsible for the accuracy of their company’s complex financial statements.