Week in Review

IN THE NEWS

• The U.S. Court of Appeals for the Fifth Circuit ruled that a Federal Communications Commission (FCC) funding mechanism for low-income internet users is unconstitutional. To subsidize telecommunications services for low-income people, schools, and libraries, the FCC implemented the Universal Service Fund (USF), which is paid for in required contributions from telecommunications providers whose customers absorb the cost. The majority sided with a conservative advocacy group that challenged the USF’s funding method, stating that the power to levy USF contributions is taxing power which belongs to Congress and cannot be delegated to the FCC without an intelligible principle, nor subdelegated by the FCC to private companies. The ruling overturned a former Fifth Circuit decision and contradicts recent decisions by the U.S. Courts of Appeals for the Sixth Circuit and Eleventh Circuit that found the USF was constitutional. 
• The U.S. Court of Appeals for the D.C. Circuit ruled that a U.S. Environmental Protection Agency (EPA) regulation intended to limit pollution from coal-fired power plants can remain in place pending further litigation. The rule requires many coal-fired power plants to stop 90 percent  of their carbon emissions within eight years. The D.C. Circuit denied the challengers’ motions to stay the rule, holding that they failed to show EPA acted arbitrarily or capriciously, caused irreparable harm, and operated outside the scope of their authority under the major questions doctrine. The challengers intend to appeal the ruling and seek an emergency stay from the U.S. Supreme Court.
• The U.S. Department of Transportation has opened an investigation into Delta Air Lines, which has been delaying and canceling flights for more than four full days due to a system software update that caused a global software outage and disrupted operations. Secretary of Transportation Pete Buttigieg stated that the investigation focuses on ensuring that passengers are being treated fairly by the airline in wake of the outage. The Transportation Department is working to get customers cash refunds instead of the travel waivers that Delta is currently offering. 
• The Federal Trade Commission (FTC) issued orders to eight companies, including Mastercard and JPMorgan Chase, requesting detailed information concerning surveillance pricing—a practice involving the use of consumers’ personal data to set individualized prices for goods and services. By issuing these orders, the FTC aims to understand the impact of surveillance pricing on consumer privacy, competition, and pricing decisions. The investigation will examine the types of products, data collection methods, and customer information used in this practice. FTC Chair Lina M. Khan explained that the Commission is probing whether businesses are “exploiting this vast trove of personal information to charge higher prices.”
• The U.S. Court of Appeals for the Ninth Circuit will not allow Idaho and a group of GOP-led states to join the State of Washington’s lawsuit brought against the U.S. Food and Drug Administration (FDA) for its approval and subsequent regulation of the abortion medication mifepristone. Washington is pursuing the suit in hopes of a declaration from FDA that mifepristone is “safe and effective,”  which will prohibit FDA from reducing the drug’s availability. The Ninth Circuit held that Idaho’s suit, which sought to tighten regulation of mifepristone by reinstating the in person dispensing requirement for the drug, was in misalignment with the former suit. The court stated that the two actions are in fact “diametrically opposed.”
• The National Labor Relations Board (NLRB) withdrew its appeal of an injunction ordered by the U.S. District Court for the Eastern District of Texas that blocked its final rule under which entities would be considered joint employers “if the two share or codetermine the employees’ essential terms and conditions of employment.” The NLRB “remains of the opinion” that its 2023 final rule is lawful. The withdrawal marks a significant development in the ongoing debate over the joint employer standard that continues to impact businesses and employees in liability and labor practices.
• A federal judge in the U.S. District Court for the Eastern District of Pennsylvania denied a small tree-trimming company’s motion to enjoin preliminarily the enforcement of the Federal Trade Commission’s (FTC) final rule banning noncompete clauses. The company, which employs 12 people, failed to establish that it would suffer irreparable harm if the court did not grant injunctive relief. This decision contradicts a ruling of the U.S. District Court for the Northern District of Texas from earlier this month that stayed the start date of the ban.   
• The U.S. Food and Drug Administration (FDA) missed its second deadline to implement a ban on formaldehyde as an ingredient in hair relaxers and straighteners. Formaldehyde is a highly toxic gas that presents heath hazards when inhaled or when in contact with eyes or skin, including links to increased cancer risk. After missing the deadline announced in its proposed rule, the FDA set a new deadline of July 2024, which it missed.  An FDA representative told NPR that the ban is still a “high priority” for FDA. Allison Stevenson, an attorney representing manufacturers and retailers in the case, stated the implementation of this ban would particularly benefit communities of color as they are the primary consumers of formaldehyde hair products.  

WHAT WE’RE READING THIS WEEK

• In an article in the Yale Journal on Regulation, Bradford J. Kelley, a shareholder at Littler Mendelson P.C., discussed how the U.S. government is combating the use of artificial intelligence (AI) and other emerging technologies for anti-union purposes or to displace workers. Kelley stated that key to curbing AI-driven anti-union efforts are the Biden Administration’s executive orders, the White House Office of Science and Technology Policy’s “Blueprint for an AI Bill of Rights,” and the National Labor Relations Board prosecutorial initiative aimed at employer accountability. Kelly concluded that in the absence of comprehensive regulation, policymakers, employers, unions, and other advocates must collaborate more proactively to protect workers without stifling technological innovation.
• In an article in the University of Pennsylvania Law Review, Paul Schiff Berman, the Walter S. Cox Professor of Law at The George Washington University Law School, Roey Goldstein, a law clerk for Judge Leslie Southwick of the U.S. Court of Appeals for the Fifth Circuit, and Sophie Leff, an assistant professorial lecturer at The George Washington University Law School, examined the complex legal landscape after Dobbs v. Jackson Women’s Health Organization. Berman, Goldstein, and Leff detailed how states have polarized on abortion laws since the Dobbs decision. Berman, Goldstein, and Leff discussed how the divergence among states has created conflict of law issues that are the most significant “since the era of the Fugitive Slave Act before the Civil War.” They further explored constitutional challenges, potential federal preemption, and the impact of private actors to exhibit the extensive legal uncertainties surrounding the future of abortion rights in the United States.   
• In an article published in the Yale Journal on Regulation, Michael A. Francus, an associate professor of law at the University of Notre Dame Law School, discussed how Chapter 9 Bankruptcy could save struggling public hospitals that would otherwise close. Francus uses public hospitals as a case study to expand bankruptcy scholarship to government businesses, finding that it can be a useful tool for communities to maintain their hospitals and ensure that creditors receive what the code demands without dooming cities and essential businesses. Currently about half of the states authorize public hospitals to declare bankruptcy. Francus concluded that more states should allow hospitals to use bankruptcy as a way to prevent them from shutting down and to keep local government businesses afloat.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Dena Adler, a senior attorney at the New York University School of Law’s Institute for Policy Integrity, argued that EPA acted within its authority in proposing a rule to reduce air pollution from coal-fired power plants. Adler stated that, in crafting this rule, EPA worked within the framework for reducing greenhouse gas emissions that the U.S. Supreme Court approved in West Virginia v. EPA. Adler also explained that under the Clean Air Act, the EPA must adequately demonstrate it has chosen the best system of emissions reduction for a given pollutant, considering “cost, energy requirements, and other health and environmental impacts.” She argued that EPA abided by this legal standard in identifying particular carbon-reducing technologies as the basis for regulation, successfully balancing the Clean Air Act’s mandate and the West Virginia v. EPA decision.