Hundreds of Important Rules Vulnerable To Repeal Under the Congressional Review Act

The Congressional Review Act (“CRA”) provides expedited procedures for Congress to disapprove of an agency rule.  If both chambers of Congress pass a disapproval resolution and the president signs the resolution, the rule is invalidated and may not be re-promulgated in substantially the same form.  The CRA has long been viewed as a limited tool that can reach back and invalidate rules from approximately the last six months.  Todd Gaziano, of the Pacific Legal Foundation, has argued that if an agency failed to properly report a new rule to Congress as required under the CRA, the Act may be able to reach back all the way to 1996 when the CRA was enacted.  Using this theory, the current administration could trigger the CRA disapproval resolution process by submitting a report for an old rule to Congress and take advantage of the expedited congressional process.

This has set off something of a scrambledownload to identify all of the rules that were never properly submitted, and thus subject to invalidation.  We are partnering with the Pacific Legal Foundation’s Red Tape Rollback project to identify rules.

Argive, a regulatory analysis project of U.S. Common Sense, identified nearly 700 economically significant rules that were not reported to the Government Accountability Office (“GAO”) for analysis as required by the CRA.

Inspired by their work, we decided to build on it by comparing the same data against the Executive Communications database maintained by the Library of Congress.  This database includes all of the direct communications from federal agencies to the relevant congressional committees of jurisdiction.

We uncovered hundreds of important rules that appeared in the Federal Register but were not received by Congress, as required by the CRA.  Those rules are listed below:

Download our data here to view filtered by agency.

Methodology

We started with the Mercatus Center’s QuantGov database for all documents published in the Federal Register from 1996 to March 14, 2017.  We filtered that dataset to “rules” that were identified as “economically significant.”

We then compared that data against the data we pulled from the Library of Congress’s list of Executive Communications.  We eliminated rules where the text in either the “document title” field or the “RIN” (regulation identifier number) field matched text in the congressional database.  The formula we used to run these comparisons was =COUNTIF(Cong.GovExCommData!A:A, “*” & [cell reference] & “*”)>0.  We also eliminated some EPA rules that were listed by that agency’s FRL numbers, as well as some duplicates.

Next, we reviewed each remaining document in the Federal Register and gave each a score from 0-3 to signify the item’s importance, with a 3 being the most important.  An item was scored as a 3 if it is a rule with national importance or interest; for example, a habitat designation under the Endangered Species Act.  An item was scored as a 2 if it was an interesting rule but that likely is of interest only to its regulated community; for example, the Farm Credit Administration’s risk-based capital requirements.  All remaining rules were given a score of 1, while notices and technical corrections were rated a 0.  This scoring system is of course subjective and is just a rough guide.  The list above it currently sorted with the most important rules at the top

We then clarified the data in the “issuing agency” and “sub agency” fields to enable researchers to filter the remaining data.

Advantages

  • Our results include rules submitted to the Federal Register from 2015–2017. The Argive results are limited because the GAO database does not include reports about these recent rules.  We identified 74 unreported rules from this time period.
  • Most importantly, we compared data against the rule reports Congress actually received, not only rule reports sent to GAO. We believe this is the most relevant analysis because the 60-day time limit imposed by the CRA begins when Congress receives the report for a rule.
  • We compared our results against the Argive results and concluded we identified hundreds of important rules subject to the CRA. We also found numerous rules that were missing from both the GAO and congressional database (i.e., rules that were identified by both Argive and us).

Limitations

  • The CRA covers more rules than those submitted by agencies to the Federal Register. For example, the CRA covers guidance documents and agency rules of procedure or practice, if those rules “substantially affect the rights or obligations of non-agency parties.”[1]  Our analysis does not include these rules because we started with a database that only included rules published in the Federal Register.
  • Similarly, we did not review each rule to ensure that it met the CRA’s definition of a rule, which excludes rules that set rates and prices.
  • The congressional Executive Communications database only includes rule reports sent to the Senate. To the best of our knowledge, there is no corresponding database of House communications.  This does not invalidate our results, however, because the CRA requires agencies to notify both chambers of new rules.  Therefore, even if the House received a communication identifying one of the rules on our list, the fact that the Senate did not receive a similar communication means the rule is still subject to the CRA.

We welcome feedback on these findings and methods.  You can contact me at james.valvo@causeofaction.org

James Valvo is Counsel & Senior Policy Advisor at Cause of Action Institute. You can follow him on Twitter @JamesValvo.

Update: This post was updated on April 6, 2017 to include further revisions and analysis of the data.

[1] 5 U.S.C. § 804(3).

 

FDA is Trying to Snuff Out America’s Cigar Industry

New rule would cripple a $20 billion industry and put thousands of American jobs in danger

Washington, D.C. – Cause of Action Institute (“CoA Institute”) today filed an amicus curiae brief in support of Plaintiffs the Cigar Association of America, the International Premium Cigar and Pipe Retailers Association, and Cigar Rights of America in their lawsuit against the Food and Drug Administration (“FDA”) challenging a new regulation with far-ranging, negative economic impacts on consumers and small businesses engaged in the premium cigar industry. The new regulation finalized by FDA unfairly targets America’s smaller-scale cigar manufacturers, trampling on a proud American heritage and eliminating economic opportunity for many small businesses.

“Common sense appears to be dead at the FDA,” said Patrick Massari, Assistant Vice President at CoA Institute. “Inexplicably, the FDA ignored tens of thousands of comments from the premium cigar industry, Congress, local government, media, and the citizens of the United States, particularly those affected in ways large and small by FDA’s power grab. Under this new rule, the tradition of premium, hand-rolled cigars handed down by generations will turn into a corporate profit mill.”

In its brief, CoA Institute argues that FDA failed to conduct a legally sufficient cost-benefit analysis, as required by federal law and Executive Orders issued by President Clinton and President Obama. Specifically, President Clinton’s 1993 EO 12866 requires that “[e]ach agency shall tailor its regulations to impose the least burden on society, including individuals, businesses of differing sizes, and other entities (including small communities and governmental entities), consistent with obtaining the regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations.” [emphasis added].

The limited analysis FDA produced either omitted or glossed over several important costs:

  • First, premium cigar prices will substantially increase for all consumers as a result of the rule;
  • Second, the sheer compliance costs of FDA’s regulation will be so high that smaller, family-owned businesses will no longer be able to comply;
  • Third, the resulting government-defined marketplace will cripple consumer choice and bar future innovation.

Many companies will likely have no choice but to sell out to larger corporations, which will then dominate the market as regulation-protected monopolies.

The FDA itself admits that it failed to do any analysis on consumer choice, saying: “We lack a baseline estimate of consumer valuation of tobacco product variety, making it impossible to estimate how consumers who continue to use tobacco products would value the potential loss of variety due to product exit under this final rule.” Instead, the FDA ignored this essential element of cost-benefit analysis by pretending that such data does not exist.

In its brief, CoA Institute calls on the Court to order FDA to reopen its cost-benefit analysis and to vacate and remand the final rule.

The full amicus brief can be found here

About Cause of Action Institute:

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.

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

Doctors Say FTC Overreach Endangers Patient Welfare

Washington, D.C. – Cause of Action Institute (“CoA Institute”) filed an Amicus Curiae brief on behalf of nine medical doctors who outlined to the court how regulatory overreach by the Federal Trade Commission (“FTC”) has harmed their patients’ welfare. The doctors argue that patients benefit from more competition and more providers of specialized cancer-diagnostic services. When the FTC put LabMD, a small cancer-detection laboratory, out of business for no reason, the FTC harmed the very consumers it was supposed to help.

Many of them former LabMD clients, the Amici doctors offer unique insight into the practical benefits of LabMD’s cancer-detection services.  While in operation, they say that LabMD’s business model was years ahead of its time and its services benefited doctors, healthcare providers, and patients through more accurate tests, reduced costs, and faster turn-around for patients to receive test results.

Congress chose to regulate medical data security by giving the Department of Health and Human Services (“HHS”) comprehensive authority to protect patient health information.  HHS has exercised this authority by creating regulations that set medical data security standards, which it actively enforces. While LabMD was in business, its work required securely storing personal health data and medical records in compliance with these HHS regulations.

In their Amicus brief, the doctors argue that the FTC overstepped its authority to regulate the practice of medicine by imposing new, confusing, and burdensome patient information data security obligations inconsistent with established federal healthcare law through HHS.

The doctors wrote:

Amici doctors are extremely concerned that, given its wholesale lack of healthcare expertise, the FTC’s recent decision to layer conflicting medical data-security requirements on top of those set by federal healthcare law will endanger their patients and have a deleterious effect on the practice of medicine and the patients whose care is entrusted to these providers.”

Ultimately, the doctors conclude that the FTC’s lack of medical expertise will “endanger patient welfare and stifle healthcare innovation.”

“In its disregard for the rule of law and due process, the FTC destroyed a small cancer detection laboratory whose primary mission was to serve its physician-clients and save lives,” said CoA Institute Assistant Vice President Patrick Massari. “The FTC’s ill-conceived foray into medical data security, where it has neither legal authority nor expertise, has endangered patient welfare.”

“The healthcare market does not need another player inserting itself  into the complex field of medicine,” added Amicus Doctor David L. Black, founder of Nashville-based Aegis Sciences Corporation. Aegis performs numerous types of laboratory testing and analysis, including workplace drug testing, prenatal monitoring, behavioral health testing, testing of food supplements to ensure that athletes do not ingest prohibited substances, and toxicology and consulting services to medical examiners, crime laboratories and police departments throughout the country.

Dr. David Black’s extensive work presenting at programs around the nation, authoring dozens of industry publications, and serving as an expert witness for testimony in federal, state, local and international courts of law, has made him a highly-respected industry leader. Dr. Black is acutely familiar with regulators in the healthcare space and has never before heard of the FTC wielding such authority as it has against LabMD in his 30-plus years of experience.

CASE BACKGROUND:

Last year, LabMD appealed a crippling FTC order that found the company’s data security practices were unreasonable. The case is now before the U.S. Court of Appeals in the 11th Circuit.

The agency has already caused irreparable harm to LabMD, forcing the small business to close its doors in 2014. If upheld, the agency’s order would cause continued harm to LabMD, requiring the company to submit to 20 years of monitoring that could cost the company, now virtually defunct, hundreds of thousands of dollars. This brief was filed in support of LabMD’s request to the Court to vacate the FTC’s order.

Amici are as follows:  Dr. David Lee Black, Ph.D., D-ABFT, FAIC, Aegis Sciences Corporation; Dr. Bruce G. Green, MD, FAC, Urology Specialists of Atlanta; Dr. Joan E. Hader, MD, Urology Specialists of Atlanta; Dr. Brian E. Hill, MD, Urology Specialists of Atlanta; Dr. Warren Hitt, MD, Gulf Coast Regional Medical Center; Dr. William L. Nabors, MD, FACS, Urology Specialists of Atlanta; Dr. Robert R. Ross, M.D., F.A.C.S., RTR Urology; Dr. Bradley N. Secrest, MD, Hattiesburg Clinic; and Dr. David C. Stout, MD, Hattiesburg Clinic.

Institutional affiliations of the individual signatories are given for purposes of identification only and do not constitute endorsement by any institution listed with respect to the contents of Cause of Action Institute’s brief.

Read the full Amicus brief here

Court Rules Against Local Fishermen, Upholds Job-Killing Government Mandate

The U.S. District Court for the District of New Hampshire held that the requirement is “an expected expense of doing business” for New England fishermen

 

WASHINGTON, D.C. – Today, the United States District Court for the District of New Hampshire dismissed the lawsuit filed by Plaintiffs David Goethel and Northeast Fishery Sector 13 against the U.S. Department of Commerce.

In December 2015, the Department of Commerce ordered that fishermen who fish for cod, flounder and certain other fish in the Northeast United States not only must carry National Oceanic and Atmospheric Administration (“NOAA”) enforcement contractors known as “at-sea monitors” on their vessels during fishing trips, but must pay out-of-pocket for the cost of those monitors.  This “industry funding” requirement would devastate the Northeast fishing industry, at the price of many jobs and livelihoods.  The District Court’s order allows that requirement to remain in place.

The Court found that the fishermen’s suit was untimely and that the requirement that monitors be funded by the fishermen was authorized by law.

“I am very disappointed by this decision,” said Goethel.  “I’ve made a living fishing in New England for more than 30 years, but I can’t afford to fish if I have to pay for at-sea monitors.  I’m grateful to Cause of Action Institute for joining the fight, and I hope that the rule of law will win in the end.”

“The fishermen in my sector can’t sustain this industry funding requirement,” said Northeast Fishery Sector 13 Manager John Haran. “They’ll have to try other fisheries, if they can keep fishing at all.”

“While we respect the District Court and its decision, it appears that decision is contrary to the law and facts,” said Alfred J. Lechner, Jr., President and CEO of Cause of Action Institute and a former federal judge.  “In the end, the federal government is overextending its regulatory power and is destroying an industry. We intend to study the decision and consider further action.”

The District Court’s full opinion can be found here. For additional information about the case, visit the Cause of Action Institute website.