Week in Review

IN THE NEWS

• U.S. District Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas issued a temporary administrative stay, blocking the Biden Administration’s Keeping Families Together process. Sixteen states challenged the process’s implementation, which would allow American citizens’ spouses and stepchildren a pathway to citizenship without leaving the country. The states, including Texas, argued that the policy encourages “illegal immigration and will irreparably harm the Plaintiff states.” In a statement, President Joseph R. Biden commented that the “ruling is wrong” and that his Administration “will not stop fighting” to prevent families from being separated.
• The U.S. Supreme Court issued an order that partially reinstated a provision of an Arizona law that mandated citizens provide proof of their citizenship when registering to vote using Arizona registration forms. The Republican National Committee and others challenged the provision and other sections of the law on the basis that it assertedly violates several constitutional provisions and statutes, including the National Voter Registration Act. The Supreme Court’s action followed the U.S. District Court for the District of Arizona’s permanent injunction barring enforcement of the challenged provisions. Three justices would have granted the application for a stay of the law in full while four would have denied it in full.
• The U.S. Supreme Court denied a request from the Biden Administration to remove the injunction preventing certain income driven repayment plans, including the Saving on a Valuable Education (SAVE) student loan repayment plan, from taking effect. The SAVE plan intended to decrease the amount that borrowers paid in student loans and included changing the cap on undergraduate loan repayment from ten percent of a borrower’s income to five percent. Conservative leaning states, such as Missouri, challenged the plan, arguing that it gave the Biden Administration the unrestricted authority to cancel student loans without authorization from Congress.
• The U.S. Court of Appeals for the Fifth Circuit vacated the U.S. Department of Labor rule that limited the amount of time tipped employees—whose hourly wage could be less than the federal minimum wage—could spend on work that does not generate tips to a maximum of 20 percent of their work week. This “80/20” rule distinguished between tip-producing work, such as waiting tables, and other tip-supporting work, such as cleaning tables or making coffee. The Court determined that the Labor Department drew an arbitrary line between tip-producing and tip-supporting work. The Court noted this distinction both failed under the Administrative Procedure Act and contradicted the “clear statutory text” of the Fair Labor Standards Act.
• California’s proposed AI safety bill, SB 1047, passed the California State Assembly and State Senate with bipartisan support—taking the proposed legislation one step closer to becoming the first artificial intelligence (AI) safeguards in the United States. State Senator Scott Wiener’s bill would require AI companies to perform safety evaluations for “foreseeable risks on massively powerful AI models before releasing them” and to have the ability to shut down the models. One AI company, Anthropic, wrote to California Governor Gavin Newsom that the bill’s benefits “likely outweigh its costs.” One opponent of the bill, OpenAI—the company behind ChatGPT—argued that regulation under the law will hinder AI innovation and is best left to Congress. Senator Wiener responded that the bill “asks large AI labs to do what they’ve already committed to doing.”
• The Massachusetts Supreme Judicial Court struck down the state’s ban on carrying switchblades as violating the Second Amendment right to keep and bear arms. Massachusetts’s highest court based its decision on New York State Rifle & Pistol Association v. Bruen, the 2022 U.S. Supreme Court case that established a new two-part test for assessing firearm restrictions. The Massachusetts Supreme Judicial Court first determined that switchblades are “arms” under the Second Amendment, reasoning that the term “extends to all bearable arms and is not limited to firearms.” Second, the court found that the government failed to demonstrate that regulating switchblades “is consistent with our nation’s historical tradition,” as is required under Bruen. Although the government provided examples of historical restrictions on certain types of knives, the court rejected them because they involved “categorically different types of bladed weapons.” Seven other states and the District of Columbia have similar laws banning switchblades.
• The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has finalized two rules intended to protect residential real estate sectors and investment advisor sectors from unlawful finance. The final residential real estate rule requires certain professionals transferring non-financed residential real estate to trusts or legal entities to report information to FinCEN. The final investment advisor rule requires certain investment advisors registered with the U.S. Securities and Exchange Commission to comply with anti-money laundering and counter terrorism financing requirements. The rules are a part of an effort to protect national security and further the Biden Administration’s efforts outlined in their U.S. Strategy on Countering Corruption.
• The Arkansas Legislative Council finalized a rule removing the option to have the gender neutral “X” option, instead of an “M” or “F” gender marker, appear on driver’s licenses. The rule requires that licenses are marked with an “M” or “F” to indicate a person’s gender and purports to prevent potential risks to the safety of law enforcement officers. The rule allows the state’s Office of Driver Services to replace previously issued driver’s licenses with the gender marker “X” to either an “M” or “F” after verifying the gender marker listed on other documents such as birth certificates. Opponents of the rule claim that the rule harms transgender and nonbinary individuals by creating confusion when their physical appearance does not match the gender marker on their license.

WHAT WE’RE READING THIS WEEK

• In an article in the Administrative Law Review, Natasha Brunstein, a former legal fellow at the Institute for Policy Integrity at New York University School of Law, claimed that in the wake of two recent Supreme Court decisions, lower federal courts’ handling of the major questions doctrine has been inconsistent. Brunstein surveyed multiple federal court opinions and argued that judges differed in many ways in their treatment of the doctrine. Brunstein focused on cases challenging the Biden Administration’s actions and determined that judicial opinions were almost always consistent with the political leanings of the judge’s appointing President. Brunstein concluded that lower courts have interpreted recent cases “as providing vast discretion in applying the doctrine, treating the doctrine as little more than a grab-bag of factors at their disposal.”
• In an article in the Journal of Law & Innovation, William E. Kovacic, Global Competition Professor of Law and Policy at The George Washington University Law School, proposed a framework to help the Federal Trade Commission realize its “full potential” to regulate Big Tech platforms such as Amazon, Apple, Meta, and Google. Kovacic suggested that Congress provide the Commission with express competition rulemaking authority. Another enhancement Kovacic proposed is for the Commission to reassess “its administrative adjudication role generally.” Kovacic argued that the Commission’s “repeated modern use of federal court litigation” instead of administrative adjudications undermines an essential rationale for the Commission’s creation and may disfavor the Commission in congressional deliberations about its future role.
• In a policy brief issued by the Urban Institute, Laurie Goodman, a fellow at the Institute, and several coauthors, commented on the mission of the Federal Housing Finance Agency’s Federal Home Loan Banks (FHLBs). The Goodman team argued that FHLBs, which are government-sponsored banks that provide liquidity to financial institutions supporting the housing finance system and funding for affordable housing, can be improved to better support the housing finance system. Among the improvements suggested by Goodman and her coauthors are expanding FHLB membership to independent mortgage bankers and real estate investment trusts, having individual FHLBs commit themselves to housing finance issues for the broader FHLB system, and increasing the size and flexibility of the FHLB’s affordability commitments.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Joshua A. Kroll, assistant professor at the Naval Postgraduate School, argued that public and private entities should institute more comprehensive management and monitoring systems surrounding their AI systems. Kroll explained that building a “responsible” AI system has proved difficult due to institutional focus on issue mitigation at the inception or procurement of the system. As a result, Kroll urged decision makers to manage AI through “sociotechnical control” and an “ongoing effort to understand an AI system’s behaviors and sustain good outcomes.” According to Kroll, AI systems need to be maintained instead of simply purchased or procured.