EPA Jobs Loss Evaluations Update

Late last year, CoA submitted an amicus brief in the case of Murray Energy v. EPA.  The brief supported Murray Energy’s cert. petition seeking review of its case before the Supreme Court.  The Murray Energy case centered on employment evaluations required under Section 321(a) of the Clean Air Act.

A federal court in West Virginia ordered the EPA to comply with the statutory mandates of Congress, requiring the EPA to conduct “continuing employment evaluations” related to Clean Air Act implementation or enforcement.  The Fourth Circuit, however, sided with the EPA and ruled that, despite the plain language of the statute, Section 321(a) was discretionary and not an agency obligation.

Our brief made the following point: Congress specifically stated that the EPA shall conduct these continuing employment evaluations.  Not may, or if something happens, or if the EPA deems it expedient, but shall.  Unfortunately, earlier this year, the Supreme Court denied Murray Energy’s petition and will not review the matter.  However, the EPA has admitted its failure to conduct job loss evaluations and committed to doing so in the future: “the Agency historically has not conducted these assessments. EPA acknowledges the importance of considering the cumulative effects of its regulations on the American public. Accordingly, EPA intends to conduct these evaluations consistent with the statutes.”  CoA will continue to monitor these developments and help ensure that the EPA follows through on its promises.

Meanwhile, nearly two years ago, CoA petitioned the EPA to initiate a rulemaking to implement procedures and hearings under Section 321(b) of the Clean Air Act.  This section allows any employee who is discharged or laid off, threatened with discharge or layoff, or whose employment is adversely affected by Clean Air Act requirements to request an investigation and a hearing from the EPA.  The EPA has failed to promulgate any regulations regarding the process and standards by which it should conduct investigations and hearings under Section 321(b) and has not responded to our petition, other than to acknowledge it.  As the agency is now under the new leadership of Acting Administrator Andrew Wheeler, the opportunity again presents itself for the EPA to finally address our petition and give the public the necessary tools to seek relief from its regulatory activities.

Josh Schopf is Counsel at Cause of Action Institute

CoA Institute Files Opening Brief in Appeal of Decision that Imperils Low Cost Children’s Clothing to Families

Washington, D.C. – Cause of Action Institute (“CoA Institute”) today filed its opening brief in the Court of Appeals for the D.C. Circuit challenging a district court ruling issued last September that wrongly found that consignors who also volunteer at children’s clothing consignment events must be considered employees under the Fair Labor Standards Act (“FLSA”).

In 2013, the U.S. Department of Labor (“DOL”) sent our client, Rhea Lana Riner, a letter claiming that her company was in violation of the FLSA regarding minimum wages and overtime pay.  The government threatened steep fines if Rhea Lana did not comply.

CoA Institute Counsel Josh Schopf: “The FLSA is a decades-old law intended to protect vulnerable workers from exploitation. That is clearly not happening at Rhea Lana’s events, and the district court acknowledged that fact. Yet the court sided with the government anyway, attacking a business model that provides hardworking families and communities with affordable children’s clothing and goods. We prevailed once on appeal, and we hope to do so again.”

The brief states:

These are not unprotected workers lacking in bargaining power or workers toiling away for long hours in sub-standard conditions.  Common sense dictates that this activity does not require remediation of the type contemplated by the FLSA…

The District Court even acknowledged that Rhea Lana’s did not exploit any of the consignor/volunteers, yet somehow the court still accepted the DOL’s claims that the agency’s determination was consistent with the purposes of the FLSA.

The brief urges the Court to reverse the judgment of the lower court and declare that consignor/volunteers at these events are not Rhea Lana’s employees.

Case background:

Rhea Lana founded her clothing consignment business in her living room more than two decades ago. Since the company’s humble beginnings, Rhea Lana, Inc. has expanded as a franchise with dozens of locations across 21 states.

Rhea Lana’s semi-annual, consignment events allow families to consign their used children’s items and receive 70% of the proceeds. The events also allow families to save money by giving them the opportunity to purchase discounted goods. At the end of the event, consignors can collect their unsold goods or elect to donate them to charity. This model allows Rhea Lana’s customers to provide high quality items for their children at a price they can afford.

Yet in 2013, the U.S. Department of Labor conducted an audit, and sent Rhea Lana an enforcement letter claiming that her company was in violation of the FLSA regarding minimum wages and overtime pay.

With the help of CoA Institute, Rhea Lana fought back. Her company’s complaint was initially dismissed in 2014 for lack of a reviewable agency action.  On appeal, however, the Court of Appeals held that the government’s letter to Rhea Lana was subject to judicial review.  In September 2017, the district court ruled in favor of the government on the merits. CoA Institute continues to represent Rhea Lana in appealing the district court’s decision to the D.C. Circuit.

Watch a video about Rhea Lana’s story here.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

Documents Reveal Special Interest Groups Lobbied HUD for Mortgage Settlement Funds

Groups committed to “revolutionary social change” sent proposals, met with high-level HUD officials

The Obama-era appears to have been a flush time for a number of favored special interest groups seeking hand-outs. It now appears that the previous administration’s pattern and practice of circumventing the congressional appropriations process to funnel money to third-party groups may have been more widespread than we thought. Beginning in 2013, the federal government entered into a number of settlements with major banks to resolve claims related to the issuance of residential-mortgage-backed securities. These settlements included billions of dollars in “consumer relief” payments that should have gone to the alleged victims, but instead were funneled to third-party organizations, including to those favored by the Obama administration.

CoA Institute has been investigating these settlements for several years and has recently uncovered documents indicating that some of these third-party organizations were directly lobbying high-level Housing and Urban Development (“HUD”) officials for a piece of the settlement pie. These documents are consistent with prior records discovered by the House Judiciary Committee regarding similar lobbying of Department of Justice (“DOJ”) officials.

In May of 2015, the House Judiciary Committee wrote a letter to the DOJ requesting information and documents relevant to the residential-mortgage-backed securities settlements.  The information they received suggested that some third-party organizations were advocating for provisions that included mandatory donation requirements from which they would benefit.

One of the communications the House Judiciary Committee received was an email sent on November 8th, 2013 from the Leadership Conference on Civil and Human Rights (LCCHR) to the DOJ.  In the email, LCCHR urged the DOJ to include funds in the JP Morgan settlement promoting community restoration and specifically seeking investment in Virginians Organized for Interfaith Community Engagement (VOICE) and their Metro Industrial Areas Foundation (Metro-IAF) affiliates. The DOJ also provided the House Judiciary Committee with an email from VOICE leadership to the head of legislative affairs at the DOJ.  VOICE asked to set-up a meeting to make the argument that grants to community equity restoration funds be mandatory in all future settlements.

Commentators have noted that groups like VOICE and their IAF affiliates have “a commitment to what [they] call ‘revolutionary social change’” promoted through their own training institutes. One “objective of the training is to help leaders see the connection between their local issues and the broader national IAF objectives and associated progressive causes.”

CoA Institute recently received documents from HUD that are similar to those that the House Judiciary Committee received from the DOJ two years ago.  CoA Institute filed a FOIA request for information on HUD’s involvement in the mortgage settlements.  After filing a complaint against HUD for failing to disclose its role in the mortgage settlements, COA received documents including the segments below from HUD. The HUD documents reveal communications between HUD and VOICE, the same organization that had been lobbying the DOJ to receive settlement funds.

For instance, the following is an email between senior policy advisor Michelle Maiwurm, then working for Sen. Mark Warner (D-VA), and Damon Smith, then Principal Deputy General Counsel at HUD, discussing opportunities for third parties, such as VOICE, to submit proposals for the settlement agreement.

The lead organizer at VOICE, Martin Trimble, responds to a meeting with HUD officials Lelaine Bigelow and Damon Smith earlier that day and attaches the fund proposal.


Here are the relevant portions from VOICE’s proposal for the VOICE/Metro IAF National Community Equity Restoration Fund mentioned in the previous email correspondence.

The parallel evidence discovered from documents submitted to the House Judiciary Committee and those provided to CoA Institute helps explain why Attorney General Jeff Sessions recently prohibited DOJ from entering into settlement agreements that provide for payments to non-governmental, third-party organizations that are not parties to the dispute. In order to ensure this problem won’t reoccur in a future administration or with other agencies, however, Congress should pass the Stop Settlement Slush Funds Act of 2017. This bill would prevent all agencies, not just DOJ, from entering into these slush-fund agreements, would remove agencies’ ability to divert funds to politically-aligned third-parties and would allow them to be disbursed to actual victims of the alleged violations or deposited in the Treasury, as required by law.

Josh Schopf is Counsel and Cara Brown is Law Clerk at Cause of Action Institute, a Washington, D.C. non-profit oversight group advocating for economic freedom and individual opportunity.




A Low Bar for White House Transparency – But Concerns Rising

Citing “national security risks and privacy concerns,” the White House recently announced that it would no longer disclose the contents of its visitor logs to the public, contrary to a policy introduced and maintained (albeit, inconsistently) by the Obama Administration.  According to The New York Times, White House press secretary Sean Spicer went so far as to suggest that disclosure would be “unnecessary, intrusive, or even harmful.”

The Trump Administration’s proffered justification for reversing President Obama’s discretionary disclosure of the logs is overstated. While the Executive Branch has an undeniable interest in some secrecy, the goals of good government are better served when the public has knowledge of those with whom the President—the quintessential public servant—is spending his time, whether in consultation about government policy or on the golf course.  Yet the decision to keep visitor logs secret is only the latest indication of a troubling trend emerging from the Trump White House regarding a lack of support for open and transparent government.

Of greater concern than the discontinuation of the WH visitor logs is the apparent continued use by the Trump administration of the policy known as “White House equities.”

When a member of the public requests records from a federal agency under the Freedom of Information Act (FOIA), that agency will often “consult” or seek the input of another government entity that created any record at issue.  Under the Obama Administration, however, evidence suggested that agencies were sending records to the Office of White House Counsel whenever they were politically sensitive, newsworthy, or otherwise embarrassing to the administration.  The result of this policy was to delay the production of records when they should have been promptly released under FOIA requirements.  Cause of Action Institute even filed a lawsuit in an attempt to reverse President Obama’s overbroad “White House equities” policy.

Shortly after President Trump’s inauguration, we reached out to the new White House Counsel to request revisions to, or elimination of, this damaging policy.  We have yet to receive a response.

Ending “White House equities” review as currently practiced would strike a blow for accountability and the rule of law and would send a strong signal that this administration takes seriously its obligations to the public.  As others have noted, President Obama promised transparency and delivered one of the most secretive governments in American history.  The bar is already low; President Trump can and should do better.

Josh Schopf and Ryan Mulvey are counsels at Cause of Action Institute