Week in Review

IN THE NEWS

• The Department of Government Efficiency (DOGE), led by Elon Musk, gained access to the Consumer Financial Protection Bureau (CFPB), including its headquarters, internal records, staff files, industry data, and consumer personally identifiable information. These actions come after Secretary of the Treasury Scott Bessent and Acting CFPB Director Russell Vought issued stop-work orders, which halted enforcement actions, investigations, rulemaking activities, and public communications. In response, Democratic lawmakers urged Bessent and Vought to rescind the stop-work order, questioning its legality. Meanwhile, top CFPB officials have resigned and dozens of probationary employees have been terminated. Musk has also been criticized over potential conflicts of interest related to his new financial products businesses, including the “X Money Account.”
• The U.S. District Court for the District of Columbia issued a temporary restraining order blocking the Trump Administration’s plan to place 2,200 U.S. Agency for International Development (USAID) employees on administrative leave and recall 1,400 foreign service officers within 30 days instead of the usual six to nine months. The court noted that employees would face irreparable injury and highlighted that “administrative leave in Syria is not the same as administrative leave in Bethesda.” The court did not, however, block the U.S. Secretary of State Marco Rubio’s order freezing funding to USAID’s contractors. This legal intervention comes amid broader efforts by the Trump Administration to dismantle USAID. The restraining order is in effect until Friday, February 14.
• The U.S. Department of Justice filed a lawsuit against the State of New York, as well as its Governor Kathy Hochul, Attorney General Letitia James, and Commissioner of Motor Vehicles Mark J.F. Schroeder, seeking to remove roadblocks to access motor vehicle records to pursue immigration enforcement. In particular, the lawsuit seeks to invalidate New York’s “Green Light Law,” which allegedly bars sharing licensee information to federal authorities without a warrant and requires state authorities to notify the licensee when federal authorities make inquiries. The lawsuit alleges that the law was enacted in 2019 with the purpose of thwarting federal immigration investigations and contends that “the Green Light Law is a frontal assault on federal immigration law, and the federal authorities that administer them.”
• The Securities and Exchange Commission (SEC) is halting its defense of a rule that would require public companies to disclose detailed information about their impact on the climate and environment. The rule requires companies to identify business activities that contribute to greenhouse gas emissions and disclose information about the cost of measures taken to reduce the harms business activities have on the climate. Critics, including certain business groups and state attorney generals, argue that the rule is unnecessary because many large companies already disclose their contribution to greenhouse gas emissions. Proponents of the rule, however, contend that the rule provides investors with information about risks from climate change that companies are contributing to.
• Two federal district judges issued opposing rulings after considering challenges to the plan of the United States DOGE Service and others (collectively referred to as DOGE) to access agency systems. Judge John D. Bates of the U.S. District Court for the District of Columbia denied a temporary restraining order that aimed to block DOGE from accessing U.S. Department of Labor data. He held that the union plaintiffs did not have standing. Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York, however, granted a temporary restraining order blocking access to U.S. Department of the Treasury data, citing privacy and security issues. This order applies to those outside the Treasury Department, including “all political appointees and special government appointees.” The temporary ban issued by Judge Engelmayer will stay in place until at least Friday, when a hearing will be held before Judge Jeannette A. Vargas, another Southern District of New York judge.
• A federal judge in Massachusetts allowed President Donald J. Trump’s federal deferred resignation program to move forward after it was challenged by numerous unions representing federal employees. District Judge George A. O’Toole Jr., who originally issued a temporary restraining order affording federal employees more time to decide whether to accept the offer, held that the unions lacked standing to sue and that federal employees should have brought their complaints to designated personnel agencies within the executive branch rather than federal court. One of the plaintiffs, the American Federation of Government Employees, stated that the ruling “is a setback in the fight for the dignity and fairness for public servants.” A spokesperson from the Office of Personnel Management lauded the ruling, noting that it was a “legal and valuable option for federal employees,” and that “the program is now closed.”
• President Donald J. Trump signed an executive order eliminating the Federal Executive Institute (FEI)—a development and training center for federal employees established in 1968. The order alleges that the FEI trains bureaucrats and enlarges the “Washington, D.C. managerial class” instead of benefitting American families. Proponents of the order claim that it aims to allow the government to refocus on serving taxpayers as opposed to federal bureaucrats. Critics, however, contend that abolishing a program that trains federal workers will harm the American public.
• President Trump signed an executive order declaring an end to the use of paper straws by the federal government. The order reverses federal policies encouraging the purchasing of paper straws over plastic straws and instructs federal agencies to remove paper straws from agency buildings and to stop buying them. The order targeted a policy from the Biden Administration that intended to discourage federal purchases of plastics for single use. Critics of the order argue that plastic straws damage the environment through harming marine life and polluting oceans, and several U.S. states have banned plastic straws. The Trump Administration contends that the switch to paper straws costs the government too much money and that consumers find paper straws difficult to use.

WHAT WE’RE READING THIS WEEK

• In an article published in the Notre Dame Law Review, Aditya Bamzai, Martha Lubin Karsh and Bruce A. Karsh Bicentennial Professor of Law at the University of Virginia School of Law, examined the history and implications of the term “set aside” in the Administrative Procedure Act (APA). Bamzai traced the statutory language from its origins in early 20th-century agency review statutes to its inclusion in the APA in 1946, arguing that Congress did not intend for courts to universally vacate agency rules it deemed unlawful. Rather, he argued, Congress only intended to set aside unlawful rules as to the particular plaintiffs in a given case. Traditional principles of equity and judgments, he contended, further support limiting judicial remedies to the parties before the court. Bamzai also analyzed how these principles apply to administrative adjudications and rulemakings, ultimately advocating a remedial framework that preserves historical limits on judicial review of agency actions​.
• In an article published in the Virginia Law Review, Barry Friedman, the Jacob D. Fuschberg Professor of Law at NYU Law School, and Danielle Keats Citron, the Caddell and Chapman Professor of Law at UVA Law School, argued that the personal data collected by police agencies needs to be regulated. Friedman and Citron contended that police agencies collect personal data indiscriminately—collected without probable cause—and in-bulk—acquired from large numbers of the American public. Although not all instances of police agencies collecting personal data are improper, Friedman and Citron noted, regulatory oversight is needed to ensure that there is a “reasonable balance” to the amount of personal data that police agencies collect. Friedman and Citron emphasized the need for transparency in the personal data collection process by police officers, and suggested laws enabling watchdogs to disclose certain information to the public as one solution to attaining transparency.
• In an article published in the Duke Law Journal, Bridget C.E. Dooling, assistant professor at the Moritz College of Law at The Ohio State University, and Rachel Augustine Potter, associate professor of politics at the University of Virginia, argued that private contractors take part in nearly every stage of the agency rulemaking process and are more enmeshed than scholars currently assume. Dooling and Potter identified three groups of contractors: “ministerial contractors,” who perform discrete administrative tasks; “expertise contractors,” who use their professional skills and judgment in the short term; and contractors in the “regulatory body shop,” who exercise heightened discretion and are so embedded in an agency that they may be described as “basically staff augmentation.” Dooling and Potter contended that there are numerous dangers with the use of private contractors in the rulemaking process, including ethical risks, but proposed regulating the work of these contractors to allow “the administrative state to move forward in an ethical, accountable, and transparent fashion.”

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Zachary A. Price, professor at the University of California College of the Law, San Francisco, argued that the U.S. Supreme Court’s 7-2 opinion in Consumer Financial Protection Bureau v. Community Financial Services Association of America “could support recognizing important limits on executive unilateralism in the future.” The Court upheld the constitutionality of the CFPB’s funding structure, which draws from the Federal Reserve rather than the annual appropriations process. Price explained that the Court interpreted the Appropriations Clause of the U.S. Constitution broadly, concluding that the Federal Reserve’s funding falls within Congress’s powers. Through such a broad understanding of “treasury,” Price contended, the Court foreclosed attempts to bypass legislative oversight. Highlighting additional rationale for maintaining appropriations controls on the executive branch in Justice Elena Kagan’s concurrence, Price concluded that “given current incentives for Presidents to defy legal limits … we should be grateful that both the majority and the concurrence … recognize some important constraints on unilateral executive action.”