Week in Review

IN THE NEWS:

• President Donald J. Trump signed an executive order requiring federal agencies to accelerate medical research for mental health disorders by cutting red tape and providing $50 million for state-led research on the therapeutic benefits of psychedelics, including ibogaine compounds. The order directs the U.S. Food and Drug Administration(FDA), the Drug Enforcement Administration (DEA), the U.S. Department of Justice (DOJ), and other federal agencies to expedite their reviews of specific psychedelic treatments and ease restrictions for FDA-approved drugs. The order also directs FDA and the U.S. Department of Health and Human Services to collaborate with the Department of Veterans Affairs and the private sector to drive participation in clinical studies for experimental psychedelic therapies. Although the National Institutes of Health halted its initial research into ibogaine in the 1990s due to potential fatal heart risks, new research could clarify the substance’s clinical potential.
• A federal appeals court vacated an order halting operations at the immigration detention facility known as “Alligator Alcatraz,” allowing the site to remain open. The U.S. Court of Appeals for the Eleventh Circuitoverturned a lower court’s order that required the site to halt its operations because it was constructed without conducting environmental studies on its impact on the nearby Everglades as required by the National Environmental Policy Act. The court, however, concluded that the facility is primarily a state-run operation and therefore not subject to those federal requirements. Environmental rights groups pledged to continue challenging the facility’s legality.
• Judge Denise Casper of the U.S. District Court for the District of Massachusetts temporarily blocked the federal government from enforcing several Trump administration energy policies that would have slowed renewable solar and wind development. Members of renewable energy trade groups challenged the policies, alleging that they violate the Administrative Procedure Act and would cause “irreparable harm.” The policies require heightened review of certain solar and wind projects and limit projects on federal lands—measures that industry groups argued would delay or restrict development. The court found that the plaintiffs were likely to succeed in their claims and allowed their renewable energy projects to proceed during the ongoing litigation.
• The U.S. Department of Education proposed a rule that would link the eligibility of higher education institutions for federal loans to the earnings of the institutions’ graduates. The proposed rule would replace a current rule that tracks the debt-to-earning rate of program graduates. Under the new rule, the Education Department would track the earnings of graduates and compare those earnings to the median earnings of working adults of the same age without the degree. Institutions that do not meet the new earnings standards in two out of three consecutive years would no longer be able to receive federal financial aid. The Education Department claimed the proposed rule would encourage institutions to provide programs that “deliver economic value” to graduates.
• The Rural Housing Service issued a proposed rule that excludes real estate commission fees from limits on costs paid by the seller through its Single Family Housing Guaranteed Loan Program, which aims to make homeownership more affordable for low- and moderate-income rural buyers. Real estate commission fees are payments made to real estate agents for helping people buy or sell a home, calculated as a percentage of the home’s sale price. Under current rules, these fees count toward a cap on what sellers can pay, which limits the amount of help buyers receive with closing costs. Sellers may pass commission costs to buyers or include them in the purchase agreement as seller-paid costs, increasing buyers’ upfront expenses. By excluding real estate commission fees from the cap, the rule would allow sellers to cover more closing costs and other expenses, reducing upfront costs for buyers and making homeownership more accessible.
• The Alabama legislature enacted a consumer privacy law restricting the ways businesses can collect, aggregate, and sell customer data. The Alabama Personal Data Protection Act (APDPA) establishes a comprehensive network of privacy regulations modeled after those enacted in Virginia. The law follows a recent trend of state legislative action tightening laws that mandate accessible opt-out and opt-in mechanisms for online consumers who do not want their data collected or sold by e-commerce platforms or other controllers. The APDPA applies to entities that control or process the data of 25,000 consumers or more. This compliance threshold lies below the thresholds that trigger compliance with data privacy laws in other states, so companies with programs that satisfy similar legal frameworks likely already meet the APDPA’s requirements. The law included no explicit private cause of action, suggesting it will be enforced solely by the Alabama Attorney General. Noncompliance can result in injunctions and penalties of $15,000 per violation.
• The Commonwealth Court of Pennsylvania ruled that a ban on the use of public funds to provide abortions violates the Equal Rights Amendment and the equal protection provisions of the Pennsylvania Constitution in a 4-3 decision. The case was brought by abortion providers, who challenged two sections of Pennsylvania’s Abortion Control Act of 1982 that prohibited Medicaid payments for abortions, with exceptions for abortions to protect the life of a mother, pregnancy caused by a rape, and pregnancy as a result of incest. The dissent, relying on past Pennsylvania state court precedent, argued in favor of the ban’s constitutionality because it was narrowly tailored. Although this case can still be appealed, it marks the first time the right to an abortion has been protected under the Pennsylvania Constitution.
• California Senate Bill 1074, which sought to penalize tech companies for preferencing their own products in search results, stalled after a deadlock in the state legislature. The bill would have prohibited internet platforms from manipulating the results or order of searches to favor their own products or services. Proponents of this bill, which included a private right of action for individual internet users, argued it would have prevented large platforms from stifling competition to the detriment of emerging companies and consumers. Although the deadlock means that this bill will not advance, California State Senator Scott Wiener stated that he plans to reintroduce legislation with similar regulations for tech companies.

WHAT WE’RE READING:

• In a recent Brookings Institution report, Sanjay Patnaik, the director of the Center on Regulation and Markets, Mike Wiley, the Senior Center Manager for the Center on Regulation and Markets, and Eli Schrag, a former research assistant with the Center on Regulation and Markets, argued that the United States should implement a voluntary export fee (VEF) as a feasible approach for U.S. companies to avoid international fees from the European Union’s Carbon Border Adjustment Mechanism (EU CBAM). Through this, EU companies must pay a fee equivalent to the greenhouse gas emissions embedded in the goods they import, and estimates suggest that imports from the United States under this regime will be charged $400 million annually. To recapture a portion of the EU CBAM fees for the United States, Patnaik, Wiley, and Schrag suggested a VEF on CBAM-covered exports, through which American exporters could voluntarily pay a fee equivalent to the CBAM amount to the United States and avoid paying into the EU CBAM. They argued that U.S. companies would participate in the VEF if companies viewed it as a shift of an existing fee to the U.S. Department of the Treasury or if lawmakers channeled VEF revenue to spur U.S. clean manufacturing.
• A recent report by the U.S. Government Accountability Office (GAO) investigated efforts by the Justice Department to enforce regulations prohibiting the sale of unauthorized electronic cigarettes. Although the Federal Food, Drug, and Cosmetic Act and the Prevent All Cigarette Trafficking Act of 2009 create restrictions on tobacco sales, GAO found that of the 6,000 electronic cigarette products available, only 39 have been approved for sale by FDA. GAO researched enforcement actions by the Justice Department, noting that the agency pursued 88 civil and criminal actions between 2022 and 2025 through its Civil Division, the Offices of the United States Attorneys, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Given the relatively low number of investigations, GAO found that the Justice Department was unable to accurately assess the resources needed for effective electronic cigarette enforcement.
• In a recent Brookings Institution report, Chiraag Bains, a nonresident senior fellow at Brookings Metro, Alex Chohlas-Wood, a professor at New York University, and Katie Kinsey, the Chief of Staff and Tech Policy Counsel at the New York University School of Law Policing Project, argued that state legislatures are the best actors to regulate artificial intelligence (AI) in the criminal justice system while protecting public safety and civil rights. Bains, Chohlas-Wood, and Kinsey explained that new AI technologies used by law enforcement, especially facial recognition, are often untested by independent sources and thus threaten civil liberties. They acknowledged the Trump Administration’s recent executive order seeking to preempt state regulation on AI by threatening to sue states or pull their federal funding. Bains, Chohlas-Wood, and Kinsey emphasized, however, that the order violates prior precedent on attaching conditions to federal funding and broader principles of federalism and state sovereignty. They contended that other states should follow California, which recently required state AI vendors to implement certain privacy and safety standards.

EDITOR’S CHOICE:

• In an essay in The Regulatory Review, Jordan Cade, an attorney at the Environmental Litigation Group, P.C., argued that the Occupational Safety and Health Administration (OSHA) should update its worker exposure limits for ethylene oxide—a chemical used to sterilize medical equipment. Cade explained that although the U.S. Environmental Protection Agency (EPA) has designated ethylene oxide as a carcinogen and has adopted stricter controls for ethylene oxide emissions, OSHA’s standards for ethylene oxide have not changed in over three decades. Cade emphasized that OSHA must revise their regulations to match EPA’s higher standards without delay in order to protect workers. In the meantime, however, Cade recommended that companies with workers who are exposed to ethylene oxide implement effective leak detection systems and provide their workers with appropriate protective gear and medical evaluations.