Week in Review

IN THE NEWS: 

• President Donald J. Trump signed an executive order that temporarily legalizes the use of dyed diesel on highways. Aside from its dye, red-dyed diesel is identical to standard diesel fuel, but it escapes taxation and is normally only legal for off-road use. President Trump stated that allowing the use of this fuel for highway travel would support the trucking industry, which has been affected by increased costs due to the Russia-Ukraine war.
• The U.S. Department of Health and Human Services issued a rule intended to make medical pricing information more accessible and understandable for patients. The new rule requires that files on medical care prices be publicly accessible on hospital and insurers’ websites in a standardized way so that the information is easily comparable by patients. The rule also mandates that information available online must also be available over the phone. U.S. Health and Human Services Secretary Robert F. Kennedy, Jr., reportedly stated that the rule will ensure that medical care will be easily accessible to patients.
• The Chair of the Federal Trade Commission (FTC), Andrew Ferguson, sent letters to 24 of the nation’s largest health care services companies, warning that failing to provide patients with timely and accurate health care pricing information may violate section 5 of the Federal Trade Commission Act as an unfair or deceptive practice. The letters clarified that compliance with the hospital price transparency rule issued by a Centers for Medicare and Medicaid Services does not shield hospitals from liability under the Act and that incomplete disclosures that omit physician or facility fees may still mislead consumers. The warning followed a rule from the U.S. Department of Health and Human Services strengthening price transparency requirements for insurers, which is part of the Trump Administration’s broader push to make health care pricing more accessible to patients.
• The U.S. Department of the Treasury and the Internal Revenue Service proposed rules under the Education Freedom Tax Credit set to launch on January 1, 2027. The Education Freedom Tax Credit was established by the President Trump’s mega tax and spending law as the first federal tax credit supporting private contributions for K-12 scholarships. Under the proposed rules, individual taxpayers may claim a nonrefundable credit of up to $1,700 for qualified contributions to eligible Scholarship Granting Organizations, which distribute scholarships to K-12 students. These organizations may deny scholarships to students based on disability, religion, or sexual orientation because the program is structured as a tax credit for private donors, which the Administration argues exempts it from federal antidiscrimination mandates.
• The U.S. Department of Education and the U.S. Department of Justice sent a letter to state attorneys general about parental consent rules in schools. The letter explained that the Protection of Pupils Right Amendment (PPRA) bans the use of opt-out permission systems, in which parents must inform a school when they do not want a student to participate in a school activity. The PPRA also requires schools to notify parents when the school collects private information from a student. The letter focused on schools’ mental health screenings and explained that under the PPRA, a school must receive written consent from parents before allowing a student to complete a mental health screening. The Education Department and the Justice Department argued that removing opt-out systems for parental consent when a school administers mental health screenings will strengthen parental rights in schools.
• Michelle Bowman, the Vice Chair for Supervision of the Federal Reserve, announced plans to restructure the agency’s bank supervision model by creating five geographic regions, each led by a regional leader. Under the current system, Federal Reserve officials in Washington set examination policy while the 12 Reserve Banks conduct actual supervision, a structure that Bowman argued weakened accountability. The Federal Reserve also plans to streamline its heavy use of supervisory committees, which Bowman said created delays and diffused responsibility when problems emerged at banks.
• Judge Valerie E. Caproni of the U.S. District Court for the Southern District of New York temporarily blocked the enforcement of a New York law that bans landlords from using algorithmic software to calculate rent prices. RealPage, a technology company that helps landlords “optimize revenues” by recommending rents and occupancy levels, argued that the law violates the First Amendment of the U.S. Constitution. RealPage contended that the information it provides to clients is protected speech. New York Attorney General Letitia James, however, has reportedly stated that algorithmic software information is not constitutionally protected because it stifles competition by allowing landlords to coordinate to keep rent prices high.
• The American Bankers Association sent two letters to federal agencies recommending that, as banks make confidential bank information available for the public to review, regulators should ensure that requirements on disclosure remain consistent across banks. In letters to the Federal Deposit Insurance Corporation and to the Office of the Comptroller of Currency, the Association advised that both agencies coordinate with the Federal Reserve when they issue new disclosure rules. In its letter to the Office of the Comptroller of Currency, the Association explained that coordination with regulators will expedite routine information sharing and decrease uncertainty around requirements.

WHAT WE’RE READING: 

• In a recent report, the U.S. Government Accountability Office (GAO) examined federal contractors’ compliance with section 503 of the Rehabilitation Act of 1973, which requires federal contractors to take steps to ensure that the federal government hires qualified applicants with disabilities.. The U.S. Department of Labor suspended two of the monitoring tools it used in the past to ensure section 503 compliance: certifying affirmative action programs, which are plans submitted by contractors explaining how federal contractors make their workplaces accessible and try to hire people with disabilities, and auditing programs to ensure compliance. That suspension has led to confusion among contractors on current requirements. GAO recommended reinstating both tools so that the Labor Department can gather more current data on section 503 compliance and can reduce confusion about standards among contractors.
• In a forthcoming article in the Cornell Law Review, Danielle A. Chaim, an assistant professor at Bar-Ilan University, explained  that the rise of large institutional investors has made the separation of corporate law and antitrust law “increasingly untenable.” Chaim noted that because these investors hold stakes across much of the economy, the governance standards these investors promote can shape competition. Chaim explained that this trend has played out through investors implementing governance policies that relax competition against other firms—both in labor and product markets—when investors also have a stake in rivals. Chaim also contended that investors’ “collective adherence” to similar standards makes companies more alike, narrowing the performance differences that asset managers use to distinguish themselves. Chaim argued that closing the resulting enforcement gap requires an integrated framework of antitrust enforcement that recognizes how governance affects competition.
• In a recent essay in the Yale Law Journal Forum, Rachel Rothschild, an assistant professor at the University of Michigan Law School, argued that the Clean Air Act does not block state common law suits to address climate change. The U.S. Supreme Court recently heard arguments in Suncor Energy, Inc. v. County Commissioners of Boulder County on whether federal law overrides state common law claims against oil companies for climate-related harms. Rothschild contended that, if the Court reaches the preemption question, it should find that state common law governs, because the Clean Air Act neither expressly preempts interstate environmental harm claims nor establishes a federal permitting program that would displace them. She further argued that the Trump Administration’s position—that the Clean Air Act grants the U.S. Environmental Protection Agency no authority to regulate greenhouse gases—only weakens the case for federal preemption, since eliminating federal regulation could leave injured plaintiffs without a legal remedy.

EDITOR’S CHOICE:

• In an essay in The Regulatory Review, Mark C. Weber, the Vincent DePaul Professor of Law at DePaul University, explained the harm that would result from rescinding a federal regulation that requires federal contractors to work towards employing workforces where people with disabilities make up at least 7 percent of employees.Weber explained that the 7 percent goal was chosen based on census data that 5.7 percent of contracted federal workers were individuals with disabilities, and that this 1.3 percent increase was a manageable goal. Weber argued that removing this regulation is a component of the Trump Administration’s attempt to attack diversity, equity, and inclusion policies. Weber concluded by stating that Congress has the power to restore or tell the administration to restore these regulations.