Inter-convention, highlights from regulatory practice might be sparse, but both litigation and regulation provide some spice. The Administration filed a petition for rehearing in the immigration policy case and a further response to the remand of a dozen decisions on the Administration’s contraceptive mandate application to religious organizations. Two rules with regulatory process implic
ations were published last week or today – one responding to a logical outgrowth fault and the other illustrating the value and limitations of advance release.
Immigration Rule or Non-Rule Rehearing: The Acting Solicitor General, on behalf of the United States, asked the United States Supreme Court (SCOTUS) to rehear United States v. Texas after a nominee is confirmed by the United States Senate and the President of the United States (POTUS) appoints that ninth Justice to replace the late Justice Scalia. This case long-chronicled here revolves on a challenge to a November 20, 2014 memorandum by the Secretary of Homeland Security directing subordinates to grant employment authorization to a newly defined class of aliens. Texas challenged the Department of Homeland Security (DHS) memorandum on substantive grounds and on the basis that it was promulgated in violation of the notice and comment requirements of the Administrative Procedure Act (APA). A district court enjoined implementation and the United States Court of Appeals for the Fifth Circuit affirmed. SCOTUS affirmed by an equally divided court – leaving the nationwide preliminary injunction in place but as precedent only in the Fifth Circuit.
The situation is not unique. As the Acting Solicitor General points out: “Ordinarily, it is exceedingly rare for this Court to grant rehearing. But when this Court has conducted plenary review and then affirmed by vote of an equally divided court because of a vacancy rather than a disqualification, the Court has not infrequently granted rehearing before a full Bench.” SCOTUS has already denied two other petitions for rehearing under similar circumstances, which the Acting Solicitor General distinguishes as less important. SCOTUS requests a response before it will grant a petition for rehearing and requires a majority of the Justices to grant rehearing “at the instance of a Justice who concurred in the judgment or decision.” The petition concludes, “This Court therefore should grant rehearing to provide for a decision by the Court when it has a full complement of Members, rather than allow a nonprecedential affirmance by an equally divided Court to leave in place a nationwide in-junction of such significance.”
► Candidly, the Administration must believe that its nominee will vote in its favor if confirmed and that may or may not be the case (Judge Garland sits in the D.C. Circuit, of course, with its long history and substantive precedent for resolving rule / non-rule disputes). This arcane procedure further delays, of course, any substantive result in the courts below, which the Administration must believe it will lose, that could be brought back to SCOTUS.
Contraceptives Information Request & Zubik Review: The triumvirate Obamacare (Patient Protection and Affordable Care Act or PPACA) agencies – the Internal Revenue Service (IRS) of the Department of the Treasury (DOTr); Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL); and the Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS) – published a request for information (RFI) rather than a proposed rule in light of the SCOTUS opinion in Zubik v. Burwell. The agencies requested information on alternatives to the current regulations that could permit eligible organizations to object to providing coverage for contraceptive services on religious grounds and also ensure that women enrolled in that organizations’ health plan have access to seamless coverage of the full range of Food and Drug Administration (FDA)-approved contraceptives without cost sharing.
Zubik vacated a plethora of lower court rulings on whether the current regulations comported with the Religious Freedom Restoration Act (RFRA) requirement that government actions (including regulations) not substantially burden a person’s exercise of religion unless that burden is the least restrictive means to further a compelling governmental interest. After extensive briefing and oral argument, SCOTUS asked the parties “whether and how contraceptive coverage may be obtained by petitioners’ employees through petitioners’ insurance companies, but in a way that does not require any involvement of petitioners beyond their own decision to provide health insurance without contraceptive coverage to their employees.” The responses indicated possibilities and SCOTUS avoided the issue by remanding all of the cases to the lower courts.
Responses to the RFI are due on September 20, 2016.
► After the extensive history chronicled here and elsewhere, the agencies plead ignorance and the RFI is problematic because it merely delays the necessary regulatory process. Any new accommodation under the RFRA must comply with the APA process for amending the existing accommodation in the regulations through an advance notice and an opportunity for public comment. The RFI asks only for information, but does not propose – even by why of merely stating “a description of the subjects and issues involved” or contain an incantation of words of issuance of a proposed rule.
The Department of Justice (DOJ) admits as much in explaining in court filings that “this RFI will be used to determine whether changes to the current accommodation regulations should be made and, if so, to inform the nature of those changes.” And the agencies’ hands continue to be tied because, as DOJ acknowledges, Zubik demands that the agencies may not impose taxes or penalties for failure to provide the notice required by the current regulations. Non-parties should need only a threat of action against them and an expedited complaint to embarrass the Government into acquiescing in their unenforceable non-compliance.
Distance Learning Accreditation: The Department of Education (ED) proposes modifications under the now generic title Program Integrity and Improvement to the State authorization provisions of the institutional eligibility regulations under the Higher Education Act of 1965 (HEA) in today’s Federal Register. The proposed rule responds in part to a portion of the 2012 decision of the United States Court of Appeals for the District of Columbia Circuit in Association of Private Sector Colleges and Universities [(APSCU)] v. Duncan.
ED’s 2010 regulations required that higher education institutions be authorized by the States in which they were physically located and contained specific additional provisions for distance learning from outside that State. In APSCU, the D. C. Circuit set aside (i.e. vacated) a provision of those regulations requiring State authorization of distance education programs or correspondence courses for States in which the school “operated” by reason of having students from that State because the final rule was not a logical outgrowth of the proposed rule under the APA. The distance learning schools could not have anticipated that they would be covered by the final rule from the text of the proposed rule and the fact that some commenters actually addressed the issue did not absolve the agency of its duty to provide advance notice and an opportunity for public comment. After the D.C. Circuit decision, ED folded the issue back into an ongoing negotiated rulemaking process, resulting in today’s updated and modified proposal.
ED allows the public only 30 days to comment rather than the traditional 60 days – comments are due August 24, 2016.
► Given the history of the rulemaking, stakeholders should be aware of the process, but ED should have provided some justification for a shortened public comment period. ED, somewhat surprisingly, somehow failed to even properly cite the court decision to which it is responding in this legal or policy significant regulatory action, even despite the additional review by the Office of Management and Budget (OMB).
Payday Loans: The Consumer Finance Protection Bureau (CFPB) finally published last Thursday its Payday, Vehicle Title, and Certain High-Cost Installment Loans proposed rule. As noted previously, the CFPB released a draft noted in early June with a stipulated public comment period that would have exceeded three months. The public inspection release and Federal Register publication specify that public comments are now due October 7, 2016.
► Two points need to be made about this delayed publication: (1) Advance release of a draft remains a substantial positive value in the regulatory process by extending the time that commenters may consider the likely proposed rule, and agencies should be commended for such advance releases. (2) On the other hand, the advance release does not provide legal notice under the APA and the Federal Register Act and a public comment period must be tailored to provide a reasonable time for public comment after formal publication. The comment period here exceeds 60 days and that seems reasonable, but requests for extension of the period are, nonetheless, likely and the CFPB may not take credit for the advance release.
The post Monday Morning Regulatory Review – 7/25/16: Immigration Rule or Non-Rule Rehearing; Contraceptives Information Request & Zubik Review; Distance Learning Accreditation & Payday Loans appeared first on Federal Regulations Advisor.