The Regulatory Week in Review: August 12, 2016

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Sixth Circuit reverses Federal Communications Commission’s municipal broadband order, Department of Energy’s commercial refrigeration rules survive industry court challenge, and more…

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IN THE NEWS

  • The U.S. Court of Appeals for the Sixth Circuit reversedFederal Communications Commission (FCC) order that sought to preempt state laws of Tennessee and North Carolina aimed at restricting the expansion of “municipal broadband” services—broadband provided by local governments—to underserved areas. The Court stated that changing the “allocation of power between a state and its subdivisions requires at least a clear statement in the authorizing federal legislation” and that the Telecommunications Act of 1996, on which the FCC relied for its preemption authority, fell short of that requirement.
  • The U.S. Court of Appeals for the Seventh Circuit held that the U.S. Department of Energy (DOE) properly used the Social Cost of Carbon (SCC) to estimate “monetized damages associated with an incremental increase in carbon emissions” in justifying two rules designed to increase the efficiency of commercial refrigeration equipment. The Court rejected challenges to the rules from industry groups, which had argued that the DOE abused its discretion by considering the SCC in its cost-benefit analysis, holding that DOE’s “methodology and conclusions were not arbitrary or capricious.”
  • The U.S. Court of Appeals for the Third Circuit held that the National Labor Relations Board (NLRB) reasonably interpreted, and properly applied, the legal standard used for making collective bargaining-unit determinations, in a case about whether the NLRB properly certified as a collective-bargaining unit a group of FedEx drivers at a New Jersey shipping facility, without including the facility’s dockworkers. The Court rejected FedEx’s argument that the NLRB had abused its discretion because a 2011 NLRB decision, on which its decision relied, was irreconcilable with NLRB precedent, the National Labor Relations Act, and the Administrative Procedure Act.
  • The U.S. Department of the Interior’s (DOI) Office of Surface Mining, Reclamation and Enforcement (OSMRE) released a policy advisory on self-bonding—a coal industry practice in which mining companies pledge to use their profits to finance the cleanup of their mining. Concerned that the federal government is too often forced to foot the bill when companies fail to pay for their own cleanup, and in light of the fact that several of the nation’s largest mining companies recently declared bankruptcy, OSMRE recommended that state regulators not allow new self-bonds until coal production matches consumption—something not expected to happen until 2021.
  • Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), along with Representative Jackie Speier (D-Calif.), filed an amicus brief with the U.S. Department of Labor (DOL) Administrative Review Board, urging the DOL to uphold strong whistleblower protections. The brief was filed in support of upholding the DOL’s original ruling in Palmer v. Canadian National Railway/Illinois Central Railroad Company, a case set to be reconsidered by the DOL. If reversed, the decision could dismantle the current whistleblower protection system, and the lawmakers who filed the brief fear that its replacement could make it “more difficult for whistleblowers to prove their cases.”
  • The U.S. Food and Drug Administration (FDA) issued a direct final rule that will increase the requirements tobacco manufacturers must satisfy before the FDA will review new tobacco products. The rule is intended to allow the FDA to better allocate its resources and focus only on “quality submissions” by refusing to accept submissions with deficiencies, including those that are not in English, do not pertain to a tobacco product, or do not include an environmental assessment.

WHAT WE’RE READING THIS WEEK

  • Sam Batkins, Director of Regulatory Policy at the American Action Forum, released a study announcing that as of July 2016 President Obama had created 600 major regulations—those with a $100 Million or more economic impact—and predicting that he is “on pace to issue 641 major regulations,” over twenty percent more than President George W. Bush did during his time in office. The report estimated that the economic burden of those 600 rules is at least $743 Billion, and that compliance with their associated “paperwork burden” requires 194 million person-hours.
  • Writing for The Hill, Melanie Zanona highlighted the Obama Administration’s push to complete a regulatory scheme for drones in its final months. Though the Federal Aviation Administration (FAA) finalized several important rules in the last few months, including a rule that permits commercial use of drones that weigh less than 55 pounds, Zanona pointed out that the drone industry has not been pleased with the pace of regulation, believing that the new rules are long overdue. In addition to the regulatory push, Zanona assessed other Obama Administration initiatives to promote drone development, including $35 million to fund drone research and the chartering of a committee within the FAA to examine drone safety.