Administrative Law Prof Blog

Deference is due an agency's application of an ordinance, but not to its "pure legal interpretation"

In the Law of the Land blog, Patty Salkin reviews a New York appellate opinion on the deference due a zoning board's interpretation of an ordinance - "Zoning Board’s Interpretation of Ordinance Not Upheld Where it Was Contrary to Clear Wording". 

While a zoning board’s interpretation is entitled to deference with respect to specific application of a term of an ordinance to a particular property, when the question is one of pure legal interpretation, such as here, deference is not required. Further, where the zoning board’s determination is counter to the clear wording of the statutory provision, little weight is given to the interpretation.

EMM

Why You Should Always Plead And Prove Preemption

The Drug and Device Law blog discusses two cases where failure to plead or prove federal preemption was found to waive the defense. 

In the recent case of Sherman v. Winco Fireworks Inc., No. 07-2267, slip op. (8th Cir. July 3, 2008) [Lexis] [Westlaw], Winco, the defendant fireworks distributor, did not plead Federal Hazardous Substances Act preemption in its answer. Winco did seek leave to file an amended answer to plead that defense 17 months after the deadline for amending pleadings had passed.

More importantly, this was after the scheduling order had been entered, without good cause.

In the old (pre-Lohr) First Circuit case of Violette v. Smith & Nephew Dyonics, 62 F.3d 8 (1st Cir. 1995) (here's a link to the case at the First Circuit website) [Lexis] [Westlaw], the defendant did plead Federal Food, Drug and Cosmetic Act preemption in its answer, but then never again mentioned the defense until after an unfavorable jury verdict.  The First Circuit held that this conduct waived the preemption defense.

The need to plead and prove federal preemption as an affirmative defense would arise in defending against state or local enforcement cases where the local laws arguably conflict with federal laws or regulations.

EMM

Border Searches Include Baseless Search and Seizure of Laptops

Thinking about bringing your laptop on your next international trip?  You may want to think again.  On July 16th, the U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement issued policies that allow officials to seize laptops as part of  government border patrol search practices.

Federal agents may take a traveler's laptop computer or other electronic device to an off-site location for an unspecified period of time without any suspicion of wrongdoing, as part of border search policies the Department of Homeland Security recently disclosed.

Also, officials may share copies of the laptop's contents with other agencies and private entities for language translation, data decryption or other reasons, according to the policies. . .

The Washington Post reports here.

You can find the regulations here.

KP/EH

A different admin law conflict: Auctioning airport access

On PrawfsBlawg, Verity Winship has posted about a conflict among agencies over the allocation of landing and takeoff slots at New York airports, "Auctioning Airport Access".  Conflicts among agencies are not the sort of matters most practitioners see, so this may be interesting to follow from train-wreck curiosity perspective.  From the post:

It's also worth keeping an eye out for litigation, which will likely raise messy questions about the relative powers of these agencies. The list of players (and potential litigants) is large, and includes the airline carriers, the Port Authority of New York and New Jersey, Congress, the U.S. Department of Transportation and the Federal Aviation Administration.

Quite a collision.  Sounds like fun - to watch.

EMM

Why every lawyer in general practice needs to know about securities law

I ran into this issue several times in practice:  Most lawyers (much less clients) don't understand that a client selling stock to the dominant shareholder’s mother raises securities law issues. Maybe Mom won't sue, but when she dies and the siblings find out that Mom lost her life savings in your client's dot-com startup, they will.  The fact that your client was always Mom's favorite will not help.

In the Conglomerate Blog, Christine Hurt has posted another example of failing to address securities law issues in "One More Time: Selling fractional interests in your career or your work product will take you for a ride through securities law -- even if you are an 'ant trading a mote of sand for a leaf or something'."  Her lede:

Every once in awhile I just have to blog about the folks who escaped having to go to law school and take securities regulation and now are unaware that their activities are governed by a whole host of rules that they could never imagine.

As with tax, securities laws lay many traps for the unwary.  I recommend that business law and admin law profs coodinate to make sure their students headed towards general practice get some exposure to the basics of securities law.  The small-business lawyer needs to be able to recognize a security and then review the situation to see if federal or state securities laws require registration, documentation of investor qualifications, or any other actions.  The minimal documentation will be a memorandum for the attorney's client file showing why no securities actions are required in the particular case.  It may be prudent to present this to the client and include it in the organizational records.  CYTWP (cover your tuchas with paper). 

EMM

GAO Investigation Reveals Defrauding Medicare is Easy

The GAO has recently completed a test run to see just how easy it is to set up a fraudulent durable medical equipment supplier and bill Medicare for false claims. In its July 2008 report, Covert Testing Exposes Weaknesses in the Durable Medical Equipment Supplier Screening Process the GAO concludes:

Investigators easily set up two fictitious durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) companies using undercover names and bank accounts. GAO’s fictitious companies were approved for Medicare billing privileges despite having no clients and no inventory. CMS initially denied GAO’s applications in part because of this lack of inventory, but undercover GAO investigators fabricated contracts with nonexistent wholesale suppliers to convince CMS and its contractor, the National Supplier Clearinghouse (NSC), that the companies had access to DMEPOS items. The contact number GAO gave for these phony contracts rang on an unmanned undercover telephone in the GAO building. When NSC left a message looking for further information related to the contracts, a GAO investigator left a vague message in return pretending to be the wholesale supplier. As a result of such simple methods of deception, both fictitious DMEPOS companies obtained Medicare billing numbers.

Once criminals have similarly created fictitious DMEPOS companies, they typically steal or illegally buy Medicare beneficiary numbers and physician identification numbers and use them to repeatedly submit claims. In one case from HHS IG, a company received $2.2 million in payments from Medicare for supplies and services that were never delivered. The owner submitted these fraudulent claims from March 2006 through July 2006 using real beneficiary numbers and physician identification numbers that he had purchased illegally. The only employee not involved in the scheme was a secretary, who told HHS IG that there was no business activity in the office and that the owner was rarely there.

LT

An administrative law situation

Here is a truly obscure and thoroughly complicated admin law mess, suitable for class discussion, exam question, or the moral equivalent to waterboarding.  In "A Look At Recent Liquidations Decisions: Less Fluidity And More Transparency", Fried, Frank attorneys Jay R. Kraemer and Kerry Hotopp review problems with the process of imposing a trade remedy duty rate on imported goods after the Department of Commerce has determined that a penalty should be imposed. The introduction:

In most international trade law administrative proceedings, and the judicial appeals therefrom, the private parties typically focus their attention on whether, and to what extent, available trade law remedies will be applied to their own, or their competitors’, imported goods. Once these issues have been fully litigated and a final decision rendered, what happens thereafter—the implementation of that final substantive decision—should, in principle, be no more than a ministerial implementation exercise by Customs. Experience, however, indicates that the assumption of liquidation of an entry at the proper rate of duty “ain’t necessarily so” in practice, and that counsel’s job in securing a favorable result for the client may not end once Commerce or the courts have ruled on the substance of trade remedy claims. This paper is intended to help counsel to identify some of the pitfalls that may lead to unexpected results in the liquidation process and, hopefully, to take timely action to assure that their clients do not receive unwelcome surprises at the very end of the game, perhaps even snatching defeat from the jaws of victory.

(Footnote omitted.)  This monster has all sorts of issues, including but not limited to statutory inconsistencies, traps for the unwary, and specialized vocabulary (namely, the word "liquidation").

EMM

EPA to get sued again for failure to regulate greenhouse gasses

From The Volokh Conspiracy:  California (and others) to Sue EPA Over GHGs (Again).  The plaintiffs assert that the EPA has inadequately responded to the Supreme Court's decision in Massachusetts v. EPA, 549 U.S. 497, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) [Lexis] [Westlaw].

EMM

State imposes moratorium on electronic billboards by regulation

Montana's Transportation Commission recently amended its regulations to prohibit electronic billboards along highways until a federal safety study is completed or the state legislature takes action.  This is an interesting use of administrative action to maintain the status quo until adequate information is available.  The Commission's evaluation of the many comments is pithy.  My favorite:

We should not proceed with this technology because "it has a clean look," or "it's cool," or "it's a good looking system," or "it communicates that we are a state that appreciates technology," or "it's the wave of the future."  These are ridiculous.

Thanks to Patty Salkin at the Law of the Land blog.

EMM

New Federal Housing Finance Agency Begins to Prioritize the Tasks Ahead

The Federal Housing Finance Agency made its debut on Wednesday and already faces the arduous task of regulating many aspects of the abysmal mortgage market; more specifically, its responsibilities will include "establish[ing] standards governing internal controls, internal audit systems, interest rate risk management, market risk management, and liquidity adequacy, to name just a few."

Read more about the uphill battle the agency faces here.

KP

Study looks at Federal agencies to Assess Judicial Partisanship

Cass Sunstein reports on an empirical study of the connections among judicial political leanings, judicial activism, and whether judges uphold federal agency decisions.

I have been studying these issues with several colleagues, including Thomas Miles, an economist and lawyer at the University of Chicago Law School, for a number of years now. One big question: Do judges show a political bias? We also wanted to see what any bias might tell us about how judges might rule in the future – under, for example, an Obama or McCain administration.

We catalogued thousands of judicial decisions -- well over 20,000-- to analyze this. We looked for partisan bias by studying whether and when judges vote to uphold decisions of federal agencies, in areas including environmental protection, labor, telecommunications, discrimination and occupational safety.

We investigated which members of the Supreme Court are the most partisan -- in that they are more likely to vote in favor of conservative agency decisions than liberal ones. (Because Chief Justice John Roberts and Justice Samuel Alito have been on the court only a short time, we did not include them because we had too little data.) We wanted to see if some justices are more political in their voting patterns than others – and also learn something about how future administrations are likely to fare in the Supreme Court.

The Washington Independent reports.

KP

EPA to Employees: You Say It Best When You Say Nothing At All

According to Time Magazine, the Associated Press has obtained an internal memo that directs managers from the EPA's Office of Enforcement and Compliance Assurance, the branch charged with making sure environmental laws are followed, to not talk to the IG's office or the GAO. 

From the article

"If you are contacted directly by the IG's office or GAO requesting information of any kind ...please do not respond to questions or make any statements," reads the e-mail sent by Robbi Farrell, the division's chief of staff. Instead, staff members should forward inquiries to designated EPA representative, the memo says.

The EPA is currently under pressure from several congressional committees to disclose documents relating to its position on global warming and its denial of a petition by California to control greenhouse gases from motor vehicles. Just last week, EPA Administrator Stephen Johnson denied a request to appear before two Senate committees to discuss whether the agency's decisions comply with its staff's technical and legal recommendations.

LT

State preemption of a local ordinance

In "Local Zoning Ordinances Imposing Distance Requirements for Convicted Sex Offenders Struck Down by New Jersey Appellate Court", Patty Salkin (Albany) summarizes a recent N.J. Appellate Division case that provides a good review of when and why state statutes will preempt local ordinances.

EMM

The Regulatory Information Service Center and its Unified Agenda of Regulatory and Deregulatory Actions

One way to stay ahead of the federal regulatory process is the Unified Agenda of Regulatory and Deregulatory Actions published by the General Service Administration's Regulatory Information Service Center.  From the Center's Unified Agenda start page:

The Regulatory Information Service Center (RISC) was created in June 1981. The Center undertakes projects that will facilitate development of and access to information about Federal regulatory and deregulatory activities. It accomplishes this by gathering and publishing information on Federal regulations and their effects on society. The Center provides this information to the President, Congress, agency officials, and the general public to help them better understand and manage the regulatory process. The Center's principal publication is the Unified Agenda, which is published in the spring and fall of each year. Since 1978, Federal agencies have been required by Executive orders to publish agendas of regulatory and deregulatory activities. The Regulatory Plan, which is published as part of the fall edition of the Agenda, identifies regulatory priorities and contains additional detail about the most important significant regulatory actions that agencies expect to take in the coming year.

In election years, with a certain change of Presidents and the potential change of political parties in charge of the Executive Branch, this may have less predictive value.  Nevertheless, it provides an insight - and warning - of regulatory actions each department presently intends to take.

EMM

USDA issues interim final rule on mandatory country of origin labeling for food

From the announcement:

The U.S. Department of Agriculture today issued an interim final rule for the mandatory country of origin labeling (COOL) program that will become effective on Sept. 30.

The rule covers muscle cuts and ground beef (including veal), lamb, chicken, goat, and pork; perishable agricultural commodities (fresh and frozen fruits and vegetables); macadamia nuts; pecans; ginseng; and peanuts -- as required by the 2002 and 2008 Farm Bills. USDA implemented the COOL program for fish and shellfish covered commodities in October 2004.

Commodities covered under COOL must be labeled at retail to indicate their country of origin. However, they are excluded from mandatory COOL if they are an ingredient in a processed food item.

...

The full text of the interim final rule will be published in the Aug. 1, 2008, Federal Register.

Copies of the interim final rule and additional information can be found at: http://www.ams.usda.gov/COOL.

EMM