Week in Review

IN THE NEWS

• The U.S. District Court for the Eastern District of Texas vacated a final rule that raised the salary threshold for receiving overtime pay. Texas, along with a group of trade associations, sued the Department of Labor, arguing that the Department exceeded its statutory authority in issuing the final rule. U.S. District Judge Sean D. Jordan agreed and wrote that the Labor Department’s focus on “duties—not salary” was not in line with the statute. Julie A. Su, the Acting Secretary of Labor, had originally justified the rule by claiming that “lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay.”
• The Consumer Financial Protection Bureau (CFPB) issued a final rule to supervise nonbank companies offering digital wallet and payment transfer applications. The final rule will allow the CFPB to supervise nonbank digital wallet companies and ensure that these companies comply with federal law just as large banks and other financial institutions are required to. The rule aims to protect consumer privacy, guard against fraud, and prevent unwarranted account freezes and closures. The rule is a part of an effort by the CFPB to increase oversight of big technology firms in consumer financial markets.
• The Drug Enforcement Administration (DEA) issued a new rule that will allow for the prescription of controlled substances through telemedicine. The rule aims to continue a policy from the COVID-19 era to allow patients that depend on telemedicine for prescriptions access to healthcare. The DEA intends for the temporary extension to allow time to finalize telemedicine controlled substance prescription rules while preventing new telemedicine companies from abusing flexible policies. The new rule expires at the end of 2025 and is the third extension of expanded telemedicine controlled substance prescription policies that would otherwise have expired at the end of 2024.
• The White House’s Office of Information and Regulatory Affairs (OIRA) announced steps to modernize the notice-and-comment rule-making process in response to President Biden’s Executive Order 14094. To help agencies address mass comments—such as when the Federal Communications Commission received over 20 million comments on its net neutrality rulemaking—OIRA worked with the U.S. General Services Administration to provide agencies with various tools, including a deduplication tool that one agency used to reduce 300,000 total comments to 30,000 distinct ones. While a human verification system is already in use, OIRA will implement additional checks to reduce abuses via computer-generated and AI-generated comments. Finally, OIRA created an informal interagency technical working group to develop best practices for managing falsely-attributed comments—those submitted under someone else’s name without their knowledge or consent.
• The three largest pharmacy benefits managers in the United States filed a new lawsuit against the Federal Trade Commission (FTC), challenging the constitutionality of the FTC’s administrative action against them over their negotiation of insulin prices. These “drug middlemen”—which collectively administer about 80 percent of the prescriptions in the country—filed a complaint in the U.S. District Court for the Eastern District of Missouri on several grounds, including that the FTC’s in-house proceedings violate their due process rights under the Fifth Amendment of the U.S. Constitution by depriving them of a “fair and impartial tribunal.” The companies cited the U.S. Supreme Court ruling in Securities and Exchange Commission (SEC) v. Jarkesy, holding that the SEC’s in-house tribunal cannot adjudicate private rights. An FTC spokesperson said the lawsuit attempts to “distract from business practices that … harm sick patients by forcing them to pay huge sums for life saving medicine.”
• The Pennsylvania Supreme Court reaffirmed that ballots with incorrect or missing dates cannot be counted. The Court wrote that it already clarified that non-compliant ballots could not be counted and that all counties—naming Bucks, Montgomery, and Philadelphia specifically—had to comply with those rulings. In separate concurring opinions, Justices P. Kevin Brobson and David N. Wecht emphasized the need for local officials to follow the rulings of the Court, with Wecht writing “to disabuse local elections officials of the notion that they have the authority to ignore Election Code provisions that they believe are unconstitutional.”
• The U.S. Court of Appeals for the Fifth Circuit declined to stay a preliminary injunction enjoining a Louisiana law that would require the Ten Commandments to be displayed in public school classrooms. The court will hear the parties’ arguments on the case and will not allow the state to enforce the statute during the litigation. The U.S. District Court for the Middle District of Louisiana recently ruled that the law “is facially unconstitutional and unconstitutional in all applications.” While groups such as the Freedom from Religion Foundation celebrated the decision, Louisiana Attorney General Liz Murrill vowed to “continue to defend this clearly constitutional law.”
• The U.S. Fish and Wildlife Service proposed a rule that would list several giraffe species as endangered under the Endangered Species Act due to the population’s decline to just under 6,000 giraffes. Since 1985, these species’ populations have declined by approximately 77 percent, mainly because of human population growth, habitat loss, urbanization, poaching, and drought due to climate change. Responding to these concerns, the rule would increase protections, including requiring permits for importation of giraffes into the United States and increasing conservation funding.

WHAT WE’RE READING THIS WEEK

• In a brief published by the Urban Institute, Anne N. Junod, a research associate at the Institute, and several coauthors discussed solutions to addressing climate disaster issues affecting disabled individuals in rural areas. The authors noted that rural communities contain a disproportionate number of individuals with disabilities, but that in cases of climate disasters, the agencies responsible for emergency management are often unaware of federally mandated activities and services for those with disabilities. The authors argued for increases in government agency coordination and increases in agency investments in climate and disaster planning in order to satisfy the needs of people with disabilities in rural areas. Among the authors’ recommended improvements are expanding the scope of the National Incident Management System, a program of the Federal Emergency Management Agency, to include climate disasters and tailoring its guidance to address rural population needs.
• In an article in the Boston University Law Review, Peter Lee, the Martin Luther King Jr. Professor at the University of California Davis School of Law, proposed a new distributed model for ensuring that scientific and technological innovations will be more socially responsive. He contended that current centralized governance regimes often fall short of promoting socially beneficial outcomes and that distributing power and resources amongst stakeholders would compel innovators to consider “broader social impacts.” Lee wrote that “by orienting various gatekeepers to consider the broader social impacts of innovation,” his model “seeks to cultivate a norm of socially responsive innovation within scientific and technological communities.”
• In an article in the Oklahoma Law Review, Timothy D. Lytton, law professor at Georgia State University College of Law, explored how regulators handle hazards that pose unquantifiable risks. Using agricultural water contamination as a case study, Lytton examined the challenges agencies face when Congress mandates science-based standards for risks that cannot be measured reliably. Lytton found that pressure to implement precise standards often leads agencies to engage in a “science charade” by concealing reliance on professional judgment and policy values. He concluded that “leading approaches to risk regulation are inadequate to overcome” recurring contamination problems. As an alternative, Lytton recommended strategies for “regulators to cope with the deep uncertainty that characterizes” unquantifiable risks, including resisting reflexive responses to public anxiety and relying on standards endorsed by stakeholders.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Laura Dolbow, an Associate Professor of Law at the University of Colorado Boulder, discussed drugs selected by the Biden Administration for Medicare price negotiation and how patent protections can contribute to higher drug prices. Dolbow noted that the majority of drugs selected by the Biden administration are protected under multiple patents with different expiration dates, extending the patent protection for these drugs past the protection for the active ingredient. Dolbow explained that the desirability of current patent policy is contested, and that patents permit drug manufacturers to delay competition from generic drugs in the market, allowing drug manufacturers to charge higher prices for their patented drugs.