12/21/2016
12/21/2016
CoA Institute Investigates Red Tape Limiting Access to Zika Testing
Washington D.C. – Cause of Action Institute (“CoA Institute”) today sent a Freedom of Information Act (“FOIA”) request to the Food and Drug Administration (“FDA”) to examine its role in regulating laboratory developed tests (“LDTs”), including tests for the Zika virus. This investigation comes on the heels of the FDA’s post-election decision to indefinitely postpone guidance documents the FDA had issued in an attempt to regulate LDTs.
This year, the FDA took steps to enforce its guidance against labs that had developed Zika tests. The FDA’s actions would further limit patients’ access to testing for the Zika virus, which can cause serious birth defects. The FDA and the Centers for Disease Control and Prevention (“CDC”) have already put in place a policy limiting the availability of Zika tests to only pregnant women and individuals who were exposed to Zika and are experiencing symptoms. In other words, unless pregnant, an asymptomatic person who has traveled to a country with known Zika transmission prohibited from being tested for the virus. This policy prevents couples who are trying to conceive from information that would help them make personal healthcare and family planning decisions.
CoA Institute Vice President John Vecchione: “The FDA needs to explain its actions. After 40 years of allowing laboratories to innovate freely and offer patients a variety of tests that often meet unique healthcare needs, it is troubling that the FDA has chosen to crack down just as the Zika virus started to spread. Couples exposed to Zika who are trying to conceive should not have to face bureaucratic hurdles to obtain testing. Instead, they and their doctor should have access to testing services that meet their unique needs. Such decisions cannot be made at a bureaucracy’s pace.”
Due to the rapid onset and spread of the Zika virus, there is still no test that has undergone the FDA approval process for in vitro laboratory developed tests (meaning laboratory tests performed in a test tube, culture dish, or elsewhere outside a living organism). Rather, the Zika tests currently available for use were all approved by the FDA pursuant to an “Emergency Use Authorization,” which comes with strict limitations.
Clinical laboratories that perform testing services were historically regulated solely by the Centers for Medicare and Medicaid Services. However, beginning in 2014, the FDA asserted that it, too, has regulatory authority over laboratory developed tests. The FDA has authority to regulate manufactured drugs and “medical devices” pursuant to the Federal Food, Drug, and Cosmetic Act. In 2014, the FDA issued draft guidance documents that assert sweeping authority to treat laboratory developed tests as “medical devices.” Accordingly, the FDA asserted authority to regulate LDTs as “medical devices” under this updated guidance.
In addition to a CDC-developed test, private laboratory companies have developed Zika tests and obtained approval to administer the tests pursuant to the Emergency Use Authorization. However, even these tests developed by private companies are subject to the CDC’s policy limiting the test to pregnant women or symptomatic individuals who were exposed to Zika.
CoA Institute is interested in learning more about the FDA’s attempts to regulate these tests and the impacts such regulation may have on the ability of patients and doctors to access testing services.
The full FOIA is available here
12/19/2016
New Law Set to Clarify and Strengthen Authority of IGs to Access Agency Records
This month, the U.S. Senate voted by unanimous consent to pass the Inspector General Empowerment Act of 2016, which originated in the House of Representatives and was sponsored by Representative Jason Chaffetz (R-UT), Chairman of the Committee on Oversight and Government Reform, and Senator Chuck Grassley (R-IA). The bill now heads to the President’s desk, where it should be signed into law.
The IG Empowerment Act is an important step in strengthening the power and independence of the official “watchdogs” of the administrative state. The main thrust of the legislation is to reinforce the power of IGs to access any agency records necessary for their oversight efforts. This is seen as necessary to bypass the roadblocks to accessing records set up by many agencies—including the Department of Justice, Peace Corps, Department of Commerce, Treasury, and EPA—over the past six years. The Obama Administration’s efforts to prevent IGs from carrying out their statutory duty to combat waste and fraud found their apogee in a July 2015 memorandum circulated by DOJ’s Office of Legal Counsel, which was strongly condemned by the IG community. That legal opinion is now superseded by statute.
The recently passed bill also modifies the operation and reporting obligations of the Council of the Inspectors General on Integrity and Efficiency—or CIGIE—the independent entity within the government composed of all the IGs. Additionally, the IG Empowerment Act clarifies when agencies and whistleblowers are authorized to disclosure sensitive information to their IG.
According to a recent congressional report, the obstructions faced by IGs, and the more than 15,000 recommendations that have been unimplemented by their agencies, have cost taxpayers $87 billion in lost savings. While the IG Empowerment Act will likely improve the effectiveness and integrity of the Executive Branch, and save taxpayers a great deal of money, there is still room for improvement. For example, the new bill fails to address the lack of subpoena power needed to compel testimony from federal employees and contractors, especially in instances where an agency refuses to cooperate with an IG’s ongoing investigation.
Congress should also take further steps to resolve the perineal problem of IG vacancies. While the new bill requires the Comptroller General, who leads the Government Accountability Office, to examine the effect of these long-vacant posts, additional pressure could be placed on the White House to nominate new IGs and the Senate to confirm them. For example, the Department of Commerce just received a new IG, and President Obama also announced the nomination of the first-ever IG for the National Security Agency, but too many empty spots remain. According to CIGIE, nine presidentially-appointed, Senate-confirmed IG positions are empty. The Project on Government Oversight calculates that the Department of Interior IG position has been vacant for over 2,800 days. This is unacceptable.
Organizations like Cause of Action Institute remain committed to public oversight, but their tools are limited. IGs are in a unique position to work with non-governmental actors and Congress alike to hold the Executive Branch accountable. Efforts to strengthen the position and authority of IGs should therefore be seen as bolstering open and transparent government. The IG Empowerment Act is one such effort. In the its new session under President Trump, Congress ought to consider additional ones.
12/15/2016
Is Sec. Perez Campaigning on the Taxpayer’s Dime?
Washington D.C. – Cause of Action Institute (“CoA Institute”) today sent a Freedom of Information Act (“FOIA”) request to the U.S. Department of Labor investigating whether recent outreach by Secretary Tom Perez to voting members of the Democratic National Committee (“DNC”) regarding his political future could be in violation of the Hatch Act. The Hatch Act explicitly prohibits federal employees from using their official authority for the purpose of affecting the results of an election.
Secretary Perez reportedly emailed DNC party chairs Wednesday morning and asked them to join him on a conference call this afternoon. During that call Sec. Perez announced his candidacy for DNC Chairman. Such outreach raises the possibility that Perez may be attempting to advance his political campaign while serving in his current government role.
Following the conference call, CoA Institute requested all communications surrounding this outreach to better understand whether Sec. Perez has used taxpayer resources, such as government issued computers, office space, mobile devices, staff, or email systems to promote his campaign.
CoA Institute Assistant Vice President Henry Kerner: “The law is clear: public officials paid by taxpayers cannot use their position to engage in political activities. The Obama administration’s unprecedented history of Hatch Act violations threatens to undermine this important protection. Americans have a right to know if Sec. Perez used taxpayer-funded resources to further his own political campaign.”
There have been three previous high-profile Hatch Act violations during the Obama administration. Just a few months ago in July of this year, Department of Housing and Urban Development Secretary Julian Castro was found to have violated the Hatch Act when he openly endorsed Hillary Clinton’s candidacy for president during a Yahoo News interview. Before that, in 2012, Secretary of Health and Human Services Kathleen Sebelius was also found to have violated the Hatch Act when she delivered the keynote speech at a gala calling on attendees to reelect President Obama. And prior to that, Secretary Perez’s predecessor at the Labor Department, Hilda Solis, resigned after word came out that she had solicited campaign contributions from a subordinate employee.
These were historic violations, as no Cabinet secretary in any prior administration had been found in violation of the Hatch Act since its enactment under Franklin Delano Roosevelt. Yet, neither Ms. Sebelius nor Mr. Castro suffered any consequences for these violations.
The full FOIA can be found here
12/13/2016
CoA Institute Sues CFPB for Refusing to Release Records Underpinning Anti-Arbitration Rule
Washington D.C. – Cause of Action Institute (“CoA Institute”) today filed a lawsuit in the U.S. District Court for the District of Columbia to compel the Consumer Financial Protection Bureau (“CFPB”) to provide records the agency used in formulating its rule to prohibit the use of mandatory binding arbitration clauses in financial services contracts.
Cause of Action Institute Vice President John Vecchione: “To issue a regulation affecting such a vast swath of the economy, and then attempt to conceal the bulk of the documents reflecting how that decision was made from public view, violates the law and the American people’s right to know.”
Prohibiting the use of third-party arbitration in financial contracts would subject numerous financial institutions to a flood of class action lawsuits, further burdening the courts and ultimately injuring consumers by increasing the costs associated with bank loans and other financial services. The CFPB’s proposed rule was largely based on a study commissioned by the agency in 2015.
In April 2016, CoA Institute filed a Freedom of Information Act (“FOIA”) request for records that would show how the agency conducted its study. Although CFPB produced some documents, the agency withheld a large number of responsive records and information.
In September, 2016, CFPB issued a final determination, indicating the agency would withhold 1,877 pages of responsive records. CoA Institute appealed the CFPB’s determination and challenged each FOIA exemption the agency applied to the production. Last month, CFPB denied the appeal.
In its lawsuit, CoA Institute argues that CFPB is required to produce all responsive records not covered by a valid exemption. The burden is on the agency to justify the use of any exemption to withhold or redact information, which CFPB has failed to do. The lawsuit compels the agency to produce all records improperly withheld within twenty business days of the court’s order.
The full lawsuit can be found here
12/12/2016
FOX News: East Coast fishermen file appeal over cost of government-required ‘at-sea monitors’
East Coast fishermen file appeal over cost of government-required ‘at-sea monitors’
By Cristina Corbin | Published December 09, 2016
SEABROOK, N.H. – David Goethel built his life off the profits of cod, trolling the waters of New England for 30 years netting the region’s once-abundant signature fish.
“My slice of the American Dream was paid for from fishing,” Goethel said from behind the wheel of his 44-foot fishing trawler on a windy Friday afternoon in December. “Cape Cod house, two cars, four college educations – it all came out of the fish hole in this boat.”
But a controversial federal mandate is threatening to put him out of business, he claims. Read More
12/12/2016
CoA Institute Challenges SEC’s Unlawful Expansion of Criminal Liability
Washington D.C. – Cause of Action Institute (CoA Institute) has filed an Amicus Curiae Brief in the First Circuit Court of Appeals challenging the District Court’s decision to defer to the U.S. Securities and Exchange Commission’s (SEC’s) interpretation of a law in a criminal case where that interpretation actually contradicts the text of the statute.
In May 2016, Richard Weed, a California-based attorney, was convicted on charges of conspiracy to commit securities fraud, which included a “pump-and-dump” scheme involving penny stocks. The government alleged that Mr. Weed performed legal work for two co-conspirators that enabled them to evade SEC stock registration requirements. Mr. Weed was sentenced to forty-eight months in prison.
The government’s case was premised on the fact that the co-conspirators were required to register the stock with the SEC. However, the stock at issue did not require registration under the Securities Act. The government conceded this point, but nevertheless argued that registration was required in accordance with the SEC’s interpretation of the law.
In its Amicus Brief, following a long line of judicial precedent, CoA Institute argued that Section 3(a)(9) of the Securities Act is unambiguous and should be construed as such, something the District Court of Massachusetts failed to do. More broadly, the Brief contends that federal agencies should not be able to administratively rewrite federal statutes to create new crimes that Congress never intended and then demand that the courts “defer” to the agency’s views on what the law prohibits or requires. Such a constitutionally dangerous practice violates the separation of powers and threatens individual liberty. The Amicus Brief argues that criminal statutes should be narrowly interpreted to protect citizens from arbitrary, overreaching prosecutions.
CoA Institute Counsel Patrick Massari: “The Constitution provides for the courts to have exclusive authority to interpret criminal laws passed by Congress. The SEC overstepped its authority by interpreting the law in a way that is directly contrary to the plain text of Section 3(a)(9). The unchecked power of the SEC and the administrative state harms individual liberty and threatens free market principles. CoA Institute is uniquely situated to assist the Court in reaching its decision because this case deals with the intersection of overcriminalization and administrative law.”
The full Amicus Brief can be found here.