Top Regulatory News of 2024

In this special edition of our regular Friday feature, the Week in Review, The Regulatory Review revisits the top regulatory news from the past year, including major U.S. Supreme Court rulings, such as Loper Bright v. Raimondo and Trump v. United States, and more. We are also pleased to highlight some of the top regulatory scholarship that we have been reading throughout the year.

JANUARY

• The U.S. Securities and Exchange Commission (SEC) approved bitcoin exchange-traded funds (ETFs), allowing investors to buy and sell bitcoin just like stocks and other financial instruments. Prior to this approval, investors were required to trade bitcoin on crypto exchanges and incur large fees. The SEC previously rejected applications for these bitcoin ETFs, stating that the underlying market was too vulnerable to fraud and market manipulation. But in January, the SEC approved all 11 applications filed by asset managers. SEC Chair Gary Gensler said that, notwithstanding this action, the SEC does not “approve or endorse bitcoin” or “crypto trading platforms or intermediaries.”
• The U.S. Environmental Protection Agency (EPA) finalized a rule restricting the manufacturing and processing of 329 per- and poly-fluoroalkyl substances (PFAS). PFAS are long-lasting chemicals associated with adverse health and environmental effects, including an increased risk of some cancers and the contamination of drinking water sources. Under the EPA’s rule, covered companies that intend to use PFAS for new uses must notify EPA. To approve the new uses, EPA must conduct a detailed review, evaluating the potential risks associated with the proposed use and implementation of restrictions.

FEBRUARY

• The U.S. Patent and Trademark Office issued guidance to help stakeholders and agency examiners decide whether to award patents in the case of artificial intelligence-assisted innovations. Although AI-assisted inventions are not unpatentable across the board, the guidance calls for a human to have provided a “significant contribution” to award a patent. The agency justified issuing its guidance by stating that “the patent system was developed to incentivize and protect human ingenuity,” not machines.
• The U.S. Environmental Protection Agency (EPA) strengthened limits on fine industrial particle emissions, also known as soot. Under a new rule, the agency has reduced by 25 percent acceptable emission rates of soot—which EPA describes as “one of the most dangerous forms of air pollution.” EPA further announced that it will monitor air quality around industrial sites and will begin considering health risks to nearby populations, especially poor and minority communities, which are disproportionately located near pollution sources. Many business groups fear that the new EPA standard will harm business in nearly one fifth of U.S. counties, inhibiting manufacturing and job growth.

MARCH

• The U.S. Securities and Exchange Commission (SEC) approved a final rule requiring certain public companies to report their greenhouse gas emissions and climate risks. Under the new rule, large companies must disclose only direct emissions they deem “material” to their financial standings, with exemptions granted to thousands of smaller businesses. The SEC’s initial proposal would have mandated disclosure across industries regardless of size. SEC Chair Gary Gensler stated that the rule aims to improve “consistency” and “comparability” of disclosures to meet rising investor demand for climate-related information.
• The U.S. Supreme Court reversed the Colorado Supreme Court’s ruling that President Donald J. Trump is ineligible to run for office under Section 3 of the 14th Amendment. Section 3 prohibits those who have previously held government positions but later “engaged in insurrection” from running for office. The Court did not discuss whether the former president had engaged in an insurrection but, instead, focused on who has the power to enforce Section 3 against those seeking federal office. The Court held that states, such as Colorado, do not have the power to enforce this provision because the Constitution gives Congress that authority.

APRIL

• President Joseph R. Biden signed a bill into law that requires the Chinese company that owns TikTok to divest that ownership within nine months. Under the law, Bytedance must give up its control of the social media app or the app will be banned from U.S. app stores. The chief executive officer of TikTok, Shou Chew, stated that the company will be challenging the constitutionality of the law. In the same statement, Chew also explained that the ban was “ironic” because “the freedom of expression on TikTok reflects the same American values that make the United States a beacon of freedom.”
• The Federal Trade Commission (FTC) issued a final rule banning noncompete clauses—provisions in employment contracts that restrict certain post-employment competitive activities. The rule prevents employers from entering into any new noncompete agreements and prohibits employers from enforcing existing noncompete agreements, except for employees who are senior executives—workers in a “policy-making position” who earn over $151,164 annually. FTC Chair Lina M. Khan expressed her support for this ban, stating that these clauses “keep wages low, suppress new ideas, and rob the American economy of dynamism.” In response, the S. Chamber of Commerce filed a lawsuit against the FTC in Texas, claiming that the FTC overstepped its power by creating this rule.

MAY

• The U.S. Supreme Court ruled that the Consumer Financial Protection Bureau’s (CFPB) funding mechanism does not violate the U.S. Constitution—reversing a federal appellate court decision which held the CFPB’s funding mechanism unconstitutional because it comes from bank fees collected by the Federal Reserve instead of the congressional appropriations process. The Court found that the Constitution’s language that “no money shall be withdrawn from the Treasury, but in Consequence of Appropriations made by Law” has been and can be interpreted with a “wide range of discretion.” Justice Samuel Alito, joined by Justice Neil Gorsuch, filed a dissenting opinion, arguing that the drafters of the Constitution would be “shocked, even horrified” by the funding mechanism and that the CFPB is granted far too much financial independence.
• The U.S. Department of Justice’s Drug Enforcement Administration proposed a new rule that would reclassify marijuana from Schedule I to Schedule III under the Controlled Substances Act. The proposed rule reflects the scientific and medical evaluation undertaken by the Department of Health and Human Services (HHS) in response to a request from President Joseph R. Biden to review the scheduling of marijuana. HHS considered factors such as marijuana’s accepted medical use, abuse potential, and potential for creating physical or psychological dependence. A rescheduling of marijuana would not legalize marijuana for adult use, but it would categorize marijuana alongside some prescription drugs and allow certain federal tax deductions for marijuana businesses.

JUNE

• The U.S. Supreme Court ruled that an anti-abortion medical organization lacked standing to challenge the Food and Drug Administration’s (FDA) longstanding approval of mifepristone, a medication used to terminate pregnancies. In a unanimous decision, the Court determined that the plaintiffs who opposed the FDA approval of the drug were not personally harmed by the FDA’s policies because none of the plaintiffs had ever prescribed or used the drug. Although the Court did not evaluate the FDA’s approval of mifepristone, the ruling preserves access to a medication that “was used in nearly two-thirds of all abortions in the U.S. last year.”
• The U.S. Supreme Court ruled that legislation authorizing administrative adjudication for certain fraud claims by the U.S. Securities and Exchange Commission (SEC) violated the right to a jury trial guaranteed by the Seventh Amendment of the U.S. Constitution. In a 6-3 decision, the Court held that a “defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator.” The Court said that Congress exceeded its powers when it permitted the SEC to choose whether to pursue an enforcement action in-house or via federal court for suits that “resemble a traditional legal claim.” Justice Sonia Sotomayor, joined by Justices Elena Kagan and Ketanji Brown Jackson, dissented and argued that the majority’s view of what the Constitution requires is “plainly wrong” and that it “upends longstanding precedent.” The dissenters predicted that the decision will likely impact “dozens of agencies” that use similar proceedings to hear enforcement actions and impose penalties without a jury, including the Federal Trade Commission, Social Security Administration, and the Environmental Protection Agency.

JULY

• The U.S. Supreme Court overturned a 40-year-old decision, Chevron v. Natural Resources Defense Council, that instructed federal judges to defer to administrative agencies when confronted with ambiguous laws passed by Congress. Chevron often applied when an agency had a legal dispute with an individual, business, or state government. Writing for the majority in a 6-3 decision in Loper Bright Enterprises v. Raimondo, Chief Justice John G. Roberts said that “courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Chief Justice Roberts’s opinion for the Court stated that previous decisions relying upon Chevron are still lawful and challenging them will require a “special justification.” Justice Elena Kagan, however, argued in a dissent that courts “can always come up with something to label a ‘special justification.’” Some legal experts argue that the decision will hamper agencies’ effectiveness, including in regulating the environment, public health, and workplace safety.
• The U.S. Supreme Court ruled that U.S. Presidents are entitled to immunity from federal prosecution for official actions taken while in office. The 6-3 decision reverses a ruling by U.S. Court of Appeals for the District of Columbia in a case against former President Donald Trump. The criminal case relating to the former President’s alleged attempt to retain power after the 2020 election was remanded to the federal trial court to be decided under the Supreme Court’s new guidance. Justice Sotomayor wrote a scathing dissent, stating that the President is now “a king above the law.” Although former President Trump celebrated the decision as a “big win for our constitution and democracy,” President Biden strongly condemned the decision as undermining “long-established legal principles.”

AUGUST

• The Biden Administration announced lower prices for ten drugs selected for the Medicare drug price negotiation program, an initiative that allows Medicare to negotiate lower costs of pharmaceuticals. The U.S. Department of Health and Human Services reached agreements with manufacturers on new prices for drugs, all of which are “among those with highest total spending in Medicare.” The price changes will take effect in 2026, and “people enrolled in Medicare Part D are estimated to save $1.5 billion in out-of-pocket costs,” according to the White House. The price negotiation program will continue to grow in the future, with additional drugs being added each year.
• President Joseph R. Biden advocated significant changes to the Supreme Court, proposing 18-year term limits for justices and a mandatory code of ethics. These reforms would aim to address ethical concerns by requiring justices to disclose gifts and avoid conflicts of interest. President Biden also supported a constitutional amendment to limit presidential immunity, challenging the Supreme Court’s ruling that protected former President Donald J. Trump from prosecution for actions taken in his official capacity. Biden’s proposals come at a time that many commentators have observed that public confidence in the judicial system is low. Despite President Biden’s push, his proposals face strong opposition in a divided Congress and are unlikely to be adopted.

SEPTEMBER

• The Biden Administration announced an initiative that aims to diminish the exploitation of the so-called “de minimis exemption,” which excludes the application of tariffs and regular oversight on imports valued at $800 or less. The initiative pairs agency rulemaking and future congressional action to respond to the actions of Chinese e-commerce companies, such as Shein and Temu, that have relied upon the exemption exponentially more in recent years. The actions would limit the products that fall under the exemption and require better identification of shipments using the exemption to protect consumers more fully from potentially dangerous products. Gina M. Raimondo, the U.S. Secretary of Commerce, stated that the Biden Administration is “standing up for American consumers and cracking down on Chinese companies’ efforts to undercut American workers and businesses.”
• The U.S. Food and Drug Administration (FDA) approved a new drug that reduces the symptoms of the rare and fatal genetic disorder Niemann-Pick Disease Type C, sometimes referred to as “childhood Alzheimer’s disease,” that attacks the nervous system and vital organs leading to physical and mental disabilities. Individuals diagnosed with this disease typically live for about 13 years. The drugmaker has not disclosed the price of this drug, but a rival company lists the cost of its treatment—which was approved just days prior—at up to $106,000 per month. These drugs are the first two FDA-approved treatments for the disease.

OCTOBER

• The U.S. Federal Trade Commission (FTC) announced a final rule that will require negative option programs—such as subscription-based services—to provide a simple mechanism to cancel features and immediately halt charges. The rule defines difficult cancellation policies along with the failure to disclose terms and material facts to consumers in the subscription sign-up process, as unfair or deceptive and prohibits The FTC emphasized that the agency receives thousands of complaints about negative options and recurring subscription practices per year. The FTC approved publication of the rule by a 3-2 vote.
• The Environmental Protection Agency (EPA) issued a final rule aimed at identifying and replacing all lead pipes in the United States within the next ten years. The final rule will also impose more stringent requirements for the testing of drinking water, mandate a lower threshold for communities to act when drinking water may be unsafe, and bolster communication between communities and health professionals. EPA Administrator Michael S. Regan emphasized that lead poisoning is a “generational public health problem” and that everyone in the United States should be protected from “lead-contaminated water in their homes.”

NOVEMBER

• The U.S. Court of Appeals for the D.C. Circuit issued a decision in Marin Audubon Society v. Federal Aviation Administration vacating a plan that governed tourist flights over national parks and had been adopted in accordance with National Environmental Policy Act (NEPA) regulations adopted by the White House Council on Environmental Quality (CEQ). The court held that the NEPA regulations exceed CEQ’s authority and are thus unenforceable. This holding creates uncertainty concerning the scope of agencies’ NEPA obligations and may provide a “basis for challenging NEPA reviews in the future.”
• President-Elect Donald J. Trump is reportedly looking to grant the Commodity Futures Trading Commission (CFTC) oversight power over much of the $3 trillion digital asset market, or “crypto market,” as part of the incoming Administration’s broader goal of reducing SEC regulatory authority. Many individuals poised to join the incoming Administration support less stringent cryptocurrency regulation—with the issue growing in prominence among Republican officials. The CFTC currently oversees the $20 trillion U.S. derivatives market, which includes the trading of futures, options, and physical commodities, but expanding into the crypto market would enlarge the CFTC’s authority.

DECEMBER

• The U.S. Supreme Court agreed to hear an appeal of a S. Court of Appeals for the District of Columbia Circuit decision finding that a set of fuel companies lacked standing to challenge a waiver granted by the U.S. Environmental Protection Agency (EPA) that allowed California to set stricter fuel emissions standards than those imposed by other states and the federal government. The Court, however, will limit its review to the question of the fuel companies’ right to sue and will not at this time address the merits of EPA’s waiver.
• The U.S. Court of Appeals for the Fifth Circuit in a 2-1 decision blocked federal efforts to remove razor-wire fencing that Texas placed along its border with Mexico to deter illegal migration. The majority sided with Texas on the border fence, stating that the federal government waived its sovereign immunity under the Administrative Procedure Act and could be sued by Texas over the dispute. The majority also held that Texas was seeking to protect its own property, not “regulate” the U.S. Border Patrol.

HIGHLIGHTS OF WHAT WE WERE READING THIS YEAR

• In a recent paper in the Duke Law Journal, Elizabeth Pollman, professor of law at the University of Pennsylvania Carey Law School, argued that bankruptcy law does not address the needs of most distressed startups, especially because their capital structures are designed to avoid bankruptcy. Pollman explained that dealing with distressed startups through other means, therefore, is crucial to sustaining the venture capital ecosystem. Pollman concluded that these and other challenges in the regulation of startup companies require an interdisciplinary approach that draws on principles of corporate, antitrust, and insolvency law.
• In a working paper, Jonathan Feingold, an associate professor at Boston University School of Law, and Joshua E. Weishart, a professor at West Virginia University College of Law, argued that “discriminatory censorship laws,” which limit instruction about race and gender identity, have resulted in both hostile learning environments and miseducation. Feingold and Weishart explained that these laws limit students’ access to a full education, which includes important knowledge on topics such as racism and sexism. Feingold and Weishart suggested that Congress hold hearings on the impacts of discriminatory censorship laws and that the S. Department of Education issues legal guidance for educators confronted with such laws.
• In an article in the Duke Journal of Constitutional Law & Public Policy, Jolynn Dellinger, a senior lecturing fellow at Duke Law, and Stephanie K. Pell, a fellow in Governance Studies at the Brookings Institution, analyzed how current state laws place women at risk of prosecution for having an abortion. For instance, in Georgia, a woman who has an abortion could be prosecuted for murder, since the state recognizes unborn children as human beings, claimed Dellinger and Pell. They also explained how prosecutors could use technology to surveil and prosecute women for having abortions. For example, prosecutors could use data from women’s cell phones, such as communications with family and friends, internet searches, and purchases made, as evidence. Dellinger and Pell urged states to clarify their abortion laws and implement “data shield laws” to protect women’s privacy by preventing companies from sharing data with investigators in states prevent companies from turning over data to investigators in states that are probing abortion-related crimes.
• In a recent Brookings Institution report, Michael J. Ahn, an associate professor at the University of Massachusetts Boston, proposed that a tax on companies using artificial intelligence could compensate displaced workers and encourage companies to make more thoughtful decisions when implementing artificial intelligence systems. Ahn argued that, to implement such a tax, artificial intelligence systems need to be granted legal personality due to the independent decision-making capabilities that artificial intelligence systems possess. To provide legal personality to artificial intelligence systems, subsequent legislation must define the range of the rights and responsibilities of the different artificial intelligence systems. Ahn contended that the legal recognition of artificial intelligence may also promote regulations that curtail other negative effects of artificial intelligence.
• In an essay in the Yale Journal of Regulation, Dena Adler and Max Sarinsky of the Institute for Policy Integrity at the New York University School of Law discussed alternatives to the Chevron doctrine, which is a framework that mandated that courts defer to reasonable agency interpretations of ambiguous statutes. Adler and Sarinsky considered alternatives that would support agencies adopting ambitious rules in light of concerns about the loss of agency power in a post-Chevron They emphasized that doctrines of best statutory reading, statutory discretion, and fact-bound judgments, all which relate to assuming that statutes are meant to be interpreted by agencies using facts they find, may curtail negative impacts on ambitious rulemaking due to Chevron being eliminated or curtailed. Adler and Sarinsky argued that curtailing Chevron may in fact support ambitious rulemaking in instances where the best statutory reading doctrine requires agencies to establish new regulations based on such readings. Furthermore, Adler and Sarinsky emphasized that the arbitrary and capricious test will still obligate courts to respect agency factual findings, which can undergird ambitious or controversial agency decisions and policy choices.
• 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 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 surrounding abortion 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.
• The Center for Applied Environmental Law and Policy (CAELP) recently prepared a white paper to help litigants defending agency actions better understand Loper Bright Enterprises v. Raimondo and how best to apply it in lower courts. The Supreme Court’s decision in Loper Bright eliminated the Chevron doctrine, emphasizing that courts must now determine the “best reading” of statutes without automatically deferring to agency interpretations, although agency expertise can still inform judicial analysis. CAELP emphasized that the Loper Bright decision creates uncertainty about the role of the major questions doctrine and its relationship to Chevron, with the Court leaving open the possibility for lower courts to continue citing the doctrine in regulatory challenges. Despite overturning Chevron, the Court reaffirmed the importance of stare decisis, suggesting that prior cases relying on Chevron should largely remain intact unless they are unworkable or have not induced significant reliance interests. CAELP highlighted the importance of this limitation, emphasizing that stare decisis should play a critical role in these cases.
• In a recent Brookings Institution article, Chiraag Bains, a nonresident senior fellow at Brookings, discussed the usefulness of disparate impact law as protection against algorithmic discrimination by artificial intelligence (AI) models. Bains explained that discrimination protection comes in two forms: prohibitions on disparate treatment and prohibitions on disparate impact. The latter prohibition focuses on outcomes resulting from unintentional discrimination through facially neutral practices. Disparate impact liability allows algorithmic discrimination in AI to be addressed even when the technology is trained with the intent to be equitable. Bains concluded by emphasizing that the current state of discrimination law does not account for AI’s complexity. He encouraged Congress and federal agencies to devote more resources to research and enforcement concerning AI and discrimination.
• In a forthcoming article in the Widener Commonwealth Law Review, Robert L. Glicksman, the J.B. & Maurice C. Shapiro Professor of Environmental Law at The George Washington University Law School, concluded that civil penalty regimes under certain environmental laws may “survive an attack on Seventh Amendment grounds,” despite the U.S. Supreme Court’s recent holding in Securities and Exchange Commission (SEC) v. Jarkesy. In Jarkesy, the Court held that the SEC’s imposition of civil penalties in securities fraud adjudications violated the Seventh Amendment right to a jury trial. Glicksman argued that analyzing similar disputes will involve determining whether the statutory claim resembles a common law cause of action to which the right to a jury trial attaches. Glicksman concluded that the standards under environmental statutes, such as the Clean Water Act and Clean Air Act, are “light years away” from public nuisance common law, which he reasoned is the closest analog. Glicksman thus predicted that civil penalties for environmental violations may withstand constitutional scrutiny.
• In an article in the Virginia Law Review, Ingrid Eagly, professor of law at the University of California Los Angeles, and Steven Shafer, a research associate at the University of California Los Angeles, analyzed the structure of detained immigration courts and found that more regulatory oversight is needed. Eagly and Shafer highlighted that detained courts, often located in remote and unconventional spaces, prioritize rapid case resolution and have limited access to counsel, frequent use of video adjudication, and constrained public access. Eagly and Shafer argued that this design creates systemic disadvantages for detained individuals. They suggested that detained and non-detained immigration court systems should be integrated to mitigate current disparities and foster more consistent judicial standards across all immigration cases.
• In a forthcoming article in the Indiana Law Journal, Jennifer Oliva, a professor of law at the Indiana University Maurer School of Law, explored the deadly effects of unregulated algorithms that health insurers use to decide whether a particular treatment is “medically necessary” and, thus, covered by their plans. Olivia contended that use of these algorithms results in improper claim denials and delays in patient care. Oliva argued that recent federal regulations to improve transparency of these algorithms are inadequate. For instance, Olivia explained that the regulations only apply to specific government insurance programs, fail to set criteria for when a treatment is “medically necessary,” and ignore the lengthy appeals process that incentivizes insurers to “strategically delay expensive care.” To address these issues, Oliva urged Congress to expand the Food and Drug Administration’s authority to include oversight of these algorithms, enabling the agency to evaluate their safety and efficacy before they are used by insurers.