Week in Review

IN THE NEWS

• The Biden Administration’s new Title IX rule, which expanded protections against discrimination to include sexual and gender identity, was temporarily blocked in six states. Chief Judge Danny Reeves of the U.S. District Court for the Eastern District of Kentucky ruled that the regulations are inconsistent with the original Title IX statute’s meaning and Congress’s intentions, which were not related to gender identity. Reeves also criticized the rule for not adequately addressing public concerns about safety. This decision followed a similar ruling against the regulations in four other states. The Biden Administration is expected to appeal these decisions.
• The Internal Revenue Service (IRS) proposed a new rule that would address a tax maneuver used by wealthy individuals and businesses, involving the moving of assets between closely held entities. This maneuver, which Deputy Treasury Secretary Wally Adeyemo described as a “shell game,” enables taxpayers to save on their tax bills. The use of such pass-through businesses reportedly surged 70 percent from 2010 to 2019. Treasury Secretary Janet Yellen stated that the new rules aim to enhance tax fairness and reduce the deficit. The IRS claimed that this rule would raise more than $50 billion over the next decade.
• Louisiana Governor Jeff Landry approved a law requiring the display of the Ten Commandments in “large, easily readable font” on posters in all classrooms within schools that receive state funding, including public universities. The posters must be placed in classrooms by the start of 2025 and will be accompanied by a “context statement” describing the role of the Ten Commandments in the history of American education. Opponents plan to challenge the law in court, arguing that it violates the Establishment Clause of the U.S. Constitution.
• The U.S. Department of Justice and the Federal Trade Commission (FTC) brought a civil enforcement action in the U.S. District for the Northern District of California against Adobe, Inc. and two Adobe executives, alleging violation of the Restore Online Shoppers’ Confidence Act. In the complaint, the Justice Department and the FTC claimed that Adobe used “fine print and inconspicuous hyperlinks to hide important information” from its subscribers, including details about cancellation policies and a costly “early termination fee.” The plaintiffs alleged that, as a result, Adobe made subscription cancellation more difficult and expensive than expected for its customers. The plaintiffs seek “unspecified amounts of consumer redress, monetary civil penalties from the defendants,” and a permanent injunction to keep the defendants in future compliance with the law.
• The U.S. Environmental Protection Agency proposed a rule intended to address the risks of n-methylpyrrolidone (NMP), a solvent used in the manufacture and production of a wide range of products, such as lithium ion batteries, plastics, paints, and cleaning products. NMP has been linked to health risks, including “miscarriages, reduced male fertility and damage to the liver, kidneys and immune and nervous systems.” The proposed rule would prohibit the manufacture, distribution, and use of NMP in certain occupational settings, require protections for workers who use NMP, impose limits on consumer products containing NMP, and establish recordkeeping and labeling requirements.
• The U.S. Senate passed a bill aimed at accelerating the deployment of nuclear energy, including speeding up permitting processes and creating incentives for advanced nuclear reactor technologies. The bill, which had already passed the House of Representatives, now awaits President Joe Biden’s signature to become law. The legislation is designed to cut regulatory costs incurred through licensing advanced nuclear technologies. It would create a financial prize for deploying next-generation reactors and expedite licensing for certain nuclear facilities. Although the bill is seen by Democrats as a critical step for both decarbonizing the power sector and ensuring reliable electricity, non-proliferation groups have raised concerns about prioritizing safety in the licensing of advanced nuclear reactors.
• The Federal Communications Commission proposed a rule that would require broadband internet providers to develop security plans surrounding their use of the Border Gateway Protocol (BGP), the global routing protocol used to exchange reachability information between the independently administered networks that make up the internet. The proposal is intended to address security risks that arise when internet traffic is disrupted or intercepted via the BGP. The proposed rule would require broadband internet providers to develop plans for implementing security measures, with the largest providers being required to report additional data quarterly.
• The U.S. Department of Housing and Urban Development (HUD) delayed the effective date of a final rule meant to strengthen the Section 184 Indian Loan Guarantee Program, a home mortgage program designed to increase homeownership in Native American communities. The initial rule clarified the program’s rules for its participants in reaction to increased demand for the program. HUD delayed the effective date of the rule until December 31, 2024 to allow for the completion of the Section 184 Program Indian Housing Loan Guarantee Program Handbook as well as to ensure compliance with the Paperwork Reduction Act requirements and give all participants additional time to conform their policies.

WHAT WE’RE READING THIS WEEK

• In a note published in the Yale Journal on Regulation, Laura Hallas, a former student at Yale Law School, discussed recent developments in tort claims brought against gun manufacturers. Hallas explained that gun manufacturers are able to block most mass tort claims brought against them using the Protection of Lawful Commerce in Arms Act (PLCAA), a federal statute that limits the manufacturers’ civil liability “as long as they comply with the state and federal law.” According to Hallas, however, recent trends suggest that courts may be turning against the notion of “near complete immunity” for gun manufacturers by recognizing the “predicate exception” to the PLCAA, which allows for the enforcement of tort liability when these manufacturers knowingly violate federal or state laws. Hallas argued that, to increase the success of future mass tort claims against gun manufacturers, challengers must “focus on the context of mass shootings, bring marketing-based and public nuisance causes of action, and continue to support new state legislation with more stringent rules.”
• In an essay in the Yale Journal of Regulation, Lawrence J. Spiwak, President of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, argued that the Kids Online Safety Act (KOSA), a bill currently in the U.S. Senate that is intended to protect children from harm online, takes “a too-broad approach that ignores unintended consequences.” Spiwak noted that KOSA would impose a duty on social media companies “to prevent and mitigate” various “harms to minors,” including mental illnesses, online bullying, and sexual abuse, requiring these companies to publish annual reports prepared by independent auditors. Spiwak argued that available data on internet harms to children do not justify “a massive government intrusion into the market” and that KOSA’s compliance costs would outweigh its potential benefits. Spiwak also raised data privacy concerns about the proposed enforcement of KOSA by the Federal Trade Commission.
• In an article in the University of Pennsylvania Law Review, Beth A. Colgan, Professor of Law at UCLA, and Jean Galbraith, Professor of Law at the University of Pennsylvania Carey Law School, argued that installment fines merit both constitutional challenge and policy reform. Colgan and Galbraith discussed installment fines, a tool used by the courts to put defendants on payment plans to pay off modest fines instead of immediately incarcerating criminal defendants who could not pay off fines in lump sums, and argued that these have become long-term tools of oppression. Colgan and Galbraith argued that installment fines have increased in their monetary amounts, include more fees and surges, and penalize nonpayment through additional costs that create ineffective solutions to justice that trap defendants in endless, inescapable payment plans. Colgan and Galbraith identified installment fines create a profit-incentive for the government that can hinder the ability to seek justice.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Azusa Uji, a Junior Associate Professor of the Graduate School of Law at Kyoto University, along with Aseem Prakash, the Walker Family Professor for the Arts and Sciences at the University of Washington, and Jaehyun Song, an Associate Professor in the Faculty of Informatics at Kansai University, discussed the necessity of nuclear energy to meet clean energy goals. Uji and her coauthors argued that other renewable energy sources, such as those from solar and wind, cannot accommodate growing electricity needs because they require backups and do not have a “switchable, on-and-off feature” to address surges in demand. They explained, however, that many communities oppose nuclear energy due to a fear of radiation leaks. To combat this issue, the Uji team suggested addressing the negative community sentiment by emphasizing the economic and environmental benefits of nuclear energy.