Posts Tagged ‘regulation and its reform’

An emergency bonfire of the regulations

So as to deploy medical services more effectively during the COVID-19 emergency, the Department of Health and Human Services has announced that it will forgo enforcement of rules restricting telemedicine, both by waiving HIPAA prohibitions on the use of everyday communications technologies like Skype and FaceTime, and by removing a requirement that reimburseable services be provided by the holder of an in-state license. At the same time, as I noted last week, many states have been relaxing rules prohibiting practice by out-of-state medical professionals (partial list here).

That’s part of a pattern in which governments are slashing many old regulations that they realize get in the way of crisis response and complicate the lives of ordinary citizens trying to work and shop under difficult conditions. My Cato colleague Chris Edwards links some of them in this post, including compilations by the Competitive Enterprise Institute and Americans for Tax Reform. (More: R Street Institute; Katherine Timpf, National Review. Hospitals and medical professionals aside, suspended rules include hours of service rules for truckers driving emergency medical supplies, requirements that Florida insurance agents keep public offices, rules forbidding the combined transport of food and liquor in Texas trucks, and federal standards restricting universities’ use of online classes. How many of these rules were unnecessary or unwise in the first place?

While movement of persons between communities may pose a danger during epidemics, movement of goods remains vital to prosperity and mutual exchange. Simon Lester points out in a Cato podcast that easing trade restrictions is a direct way to address difficult bottlenecks in emergency medical supplies. Relatedly, recent tariffs on medical supplies haven’t been helpful, encouraging large factories overseas to prioritize customers outside the U.S. (earlier).

In a reaction to the financial strains caused by the outbreak, the feds have been flooding the banking system with liquidity, both by relaxing regulations and through central bank operations. Cato’s Diego Zuluaga in a podcast distinguishes between liquidity objectives and (what is rightly more controversial) bailout objectives.

Regulation and administrative law roundup

February 5 roundup

  • If your personal injury lawyer instructs you not to file a claim with your health insurer concerning your medical care, you may instead be in the hands of a “lien doctor” [Sara Randazzo, WSJ, paywall]
  • Supreme Court passes up opportunity to decide whether the Constitution’s Excessive Fines Clause applies to business defendants, and also whether a state can conjure an excessive fine out of existence by conceptually slicing it up into smaller daily fines [Ilya Shapiro on Cato support for certiorari petition in Dami Hospitality v. Colorado; petition denied January 13]
  • Assessing (favorably) the Trump Administration record on regulation [Cato Daily Podcast with William Yeatman and Caleb Brown; Casey Mulligan, Economics 21]
  • Twelve scholars pick their favorite dissents in Canadian law, and the result might furnish something of a mini-education in the jurisprudence of Canada, where unions, for example, are deemed to have a constitutional right to strike [Double Aspect via Prawfsblawg]
  • Ben Barton of the University of Tennessee, whose books we’ve much admired, has a new one out on a topic dear to our heart, called Fixing Law Schools [Scott Jaschik interview, Inside Higher Ed via Caron/TaxProf]
  • This, except not disapprovingly: current administration retreats from predecessor’s moves to define international human rights as including economic welfare and social justice claims [JoAnn Kamuf Ward and Catherine Coleman Flowers, Columbia Human Rights Law Review]

Regulation and administrative law roundup

In two new executive orders, Trump reins in agency guidance

Some important (and promising) news that otherwise might be missed: last week President Trump signed executive orders curtailing the use of subregulatory guidance, such as Dear Colleague letters and informal field advice, to create binding law [Susan Dudley, Forbes (guidance should be shield for regulated, not sword for regulators), Michael P. DeGrandis, Reason; first (rules for development of guidance and transparency) and second (use of guidance in civil enforcement) executive orders; background here and here]

Trimming back the “regulatory thicket”

For small businesses, regulation vies with taxes as the most complained-of public policy issue. Commonly, however, no one regulation is singled out as causing most of the problem: it’s more the cumulative and interactive hassle of various burdens, especially as a company grows or tries to enter new markets or take on new functions. The Federalist Society has launched a “regulatory thicket” project aimed at shedding light on the problem. Among its products so far: an overview paper by Anastasia Boden et al.; a paper on how the thicket operates in one urban jurisdiction, the District of Columbia [Yesim Sayin Taylor]; a video on how it affects an Oregon couple’s home-based telecommunications services firm; and a teleforum with Brooks Rainwater and Luke Wake.

A related op-ed [Braden Boucek and Luke Wake, Real Clear Policy] notes that reformers often appeal to state legislators, with ideas such as sunset laws and regulatory impact statements for new legislation. But other actors can be involved too:

One especially interesting proposal that has been tried in Arizona with success is giving people a way to challenge regulations in court when they needlessly burden the right to earn a living. That way lawmakers are not the sole party able to bring about reform.

State governors are also in a position to help trim the regulatory thicket in many cases. Governors might follow Canada’s success in controlling the growth of regulation by requiring government agencies to eliminate regulatory impositions for every new mandate. President Trump’s executive order to eliminate two regulations for every new regulation is another instructive example. Likewise, state legislatures might assign the task of reviewing and eliminating regulation to a special commission.

Restraining regulation by guidance document

My new post at Cato finds some real progress in grappling with a longstanding problem of the administrative state:

Since my update post last year, there have been a number of new developments. Soon after then-Attorney General Jeff Sessions’s announcement of the new policy, followed by the revocation of dozens of existing guidance documents, then-Associate Attorney General Rachel Brand issued a January 2018 directive telling Department of Justice attorneys not to rely on allegations of noncompliance with agency guidance, in and of themselves, as reason to initiate civil enforcement actions. And this past winter, DOJ updated its Justice Manual to limit the use of guidance as a basis for direct liability in both civil and criminal enforcement. “Guidance is not law. It’s not binding. And it shouldn’t be given the force or effect of law,” said Deputy Assistant Attorney General Charles Cox in a January speech.

Plus OMB guidance on the Congressional Review Act (it applies to some guidance documents) and a new study by Prof. Nicholas Parrillo for the Administrative Conference, which found that

regulated parties are most likely to feel that they have no real choice but to obey guidance 1) when they need to obtain preapproval before doing business, 2) when repeat interactions with regulators are inevitable and full compliance all the time is unlikely no matter how hard they try; 3) when the consequences of agency enforcement, or even the opening of an enforcement action, are severe; and 4) when the regulated party employs a large dedicated compliance staff.

These might serve as interesting guideposts in looking for ways to revamp regulatory schemes in such a way that agencies’ whims will no longer be received as law.

May 29 roundup

  • Lawyer don’ts: Don’t steal your client’s book advance [Rebecca R. Ruiz, New York Times on Michael Avenatti indictment]
  • “This isn’t science, it’s witchcraft”: latest verdict against Bayer/Monsanto in Roundup weedkiller/non-Hodgkin’s lymphoma case rests on ultra-loose standards of causation [David Bernstein, related video, earlier]
  • Blazing sunset: Idaho legislature fails to reauthorize state’s code of more than 8,000 regulations, which expire. Between now and July 1, Gov. Brad Little “gets to pick and choose which ones to reinstate as emergency regs until legislature meets again.” [James Broughel, Mercatus]
  • News blackout on STEM Charter School shooting (Highlands Ranch, Colorado) has judicial origins: entire court file in murder case against older of the two shooters “is ‘suppressed’ from public inspection. This even over the express request of the prosecutor” to have the judge unseal most records [Eugene Volokh]
  • Baltimore corruption and development, red flag law, Montgomery Countyites for private toll lanes, Yuripzy Morgan show and more in my latest Maryland policy roundup;
  • A point I’ve been making for years about the Electoral College: one of its underrated benefits is in bolstering election integrity by much shortening the list of jurisdictions in which a material chance of fraud might throw overall result into doubt with consequences for legitimacy [Stephen Sachs and followup]

Banking and finance roundup

  • “In the banking world, with which I am familiar, the general belief has been that you disobey supervisory guidance at your peril. That sounds like law and regulation, but without the open process and accountability. Over many years it has certainly felt that way.” [Wayne A. Abernathy, Federalist Society commentary]
  • Some House Democrats use hearings to badger banks into cutting off clients in industry areas like guns, pipeline construction [Zachary Warmbrodt, Politico]
  • New U.S. Chamber Institute for Legal Reform papers on reforming securities litigation: “Risk and Reward: The Securities Fraud Class Action Lottery” [Stephen J. Choi, Jessica Erickson, Adam C. Pritchard]; “Containing the Contagion: Proposals to Reform the Broken Securities Class Action System” [Andrew J. Pincus]
  • “A pot banking bill is headed to House markup with bipartisan support” [Jim Saksa, Roll Call]
  • Your periodic reminder that corporate law *is* a form of public interest law [Stephen Bainbridge quoting Hester Peirce]
  • “History Shows Forcing Companies to Put Workers on Boards Is a Bad Idea” [Ryan Bourne, UK Telegraph/Cato, earlier on Elizabeth Warren proposals]

Regulation and administrative law roundup

  • Supreme Court could help rein in the administrative state by overruling Auer v. Robbins (1997), which directs courts to defer to agencies’ interpretations of their own regulations [Ilya Shapiro, Trevor Burrus, and William Yeatman on Cato amicus brief in Kisor v. Wilkie, earlier] “Does Kisor Really Threaten the Foundations of Administrative Law?” [William Yeatman]
  • “What Is Regulation For?” [video panel from Federalist Society National Lawyers’ Convention with Richard Epstein, Philip Hamburger, Kathryn Kovacs, Jon Michaels, moderated by Hon. Britt Grant] Plus, panel on the use of adjudication in place of rulemaking [Jack Beermann, Allyson Ho, Stephen Vaden, Chris J. Walker, moderated by Hon. Gregory Katsas; Antonin Scalia, “Making Law Without Making Rules,” Regulation magazine 1981]
  • “Businesses in regulated industries rely on the regulating agency’s advice to make decisions.” But if advice from agency staff can neither be relied upon for legal purposes nor be subject to judicial review, isn’t it worse than getting no advice at all? [Ilya Shapiro on Cato cert amicus brief in Soundboard Association v. FTC]
  • “Administrative Law’s Assault On Civil Liberty: Lucia Vs. SEC” [Margaret Little, Federalist Society, earlier]
  • Identifying regulations that disproportionately harm the poor [Cato Daily Podcast with Ryan Bourne, Vanessa Brown Calder, Diane Katz, and Caleb Brown]
  • Seek permission to innovate, or innovate first and then seek forgiveness? How startups manage regulators [Sam Batkins, Regulation reviewing Regulatory Hacking by Evan Burfield with J.D. Harrison] Sides tend to switch on this each time White House changes partisan hands, so now it’s the left-liberals who see a silver lining in agencies’ procedural ossification [Stuart Shapiro, Regulation]