Did you know that you can require your bank to decline a transaction instead of charging an overdraft fee?

If not, you are not alone—in a recent study, 70 percent of Americans who were charged overdraft fees did not know they had the right to have their bank decline the transaction instead of charging them a fee.

In 2010, rulemakers amended Regulation E to require financial institutions to provide notice to consumers and have them opt-in to overdraft fees. But some advocates believe this regulation does not go far enough to protect consumers from predatory banking practices associated with overdraft fees.

Large banks such as Capital One and Bank of America recently decided to end or greatly reduce the use of these fees, despite making an average of $15 billion a year in overdraft fees. Some commentators say this shift comes on the heels of increased interest in regulating these types of fees at the federal level.

The Consumer Financial Protection Bureau (CFPB) for example, has stated its intention to intervene in overdraft practices to restore proper competition. CFPB director, Rohit Chopra, expressed concerns that banks depend on overdraft fees in their profit model, rather than compete for the best services and interest rates, which has bad outcomes for consumers.

U.S. Senators Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.) introduced the Stop Overdraft Profiteering Act of 2021 last August to regulate profits from overdraft fees in the United States. They drafted the act in response to growing concerns about predatory banking practices, which predominantly impact low-income communities.

According to the CFPB, 80 percent of revenue from overdraft fees comes from just 9 percent of customers, who are charged 10 or more times a year for spending above their balance. So, low-income individuals pay three times as much to maintain their checking accounts.

In this week’s Saturday Seminar, experts discuss recent scholarship on the regulation of overdraft fees.

• Do policies that prohibit aggressive overdraft fees help low-income consumers? Marco Di Maggio, Angela Ma, and Emily Williams of Harvard Business School argue that they do in a recent working paper. They focus on the practice of banks processing transactions from most expensive to least expensive, which can generate more overdraft fees if customers do not have enough funds in their account. Maggio, Ma, and Williams analyzed data on banks that were banned from this practice after lawsuits and found that households experienced better credit health outcomes. Consumers gained better credit scores, higher credit card limits, and better access to mainstream, likely cheaper credit.
• CFPB recently published a report on overdraft fees at smaller financial institutions by Nicole Kelly and Éva Nagypál, Senior Economist at CFPB. In the report, Kelly and Nagypál examine overdraft policies and their impact on consumers at financial institutions with assets under $10 billion with “core processors.” They found that smaller financial institutions had smaller per-item overdraft fees than large banks, which places less of a burden on low-income consumers who more frequently overdraft. Smaller financial institutions served by core processors, however, charged similar overdraft fees to larger banks. Their data set also showed that banks with overdraft fee opt-in programs charged a higher number of overdraft fees and collected more revenue from overdraft overall. Kelly and Nagypál emphasize the importance of studying the impact of varying overdraft policies at smaller financial institutions, as these institutions make up a large portion of the financial sector and have different risks and benefits for consumers.
• In an article in Columbia Law Review, Natasha Sarin of University of Pennsylvania Carey Law School explains some consequences of the regulation that prevents banks from imposing overdraft fees on consumers unless they have explicitly opted-in to overdraft protection. Sarin notes that the Federal Reserve Board implemented the rule to allow consumers to decide whether to use overdraft protection and accordingly, the number of consumers who opted-in decreased dramatically. Sarin argues that an unintended effect of this reduction in over-drafting consumers is that banks, to keep from losing revenue, target customers who frequently over-draft to opt-in. These customers, Sarin emphasizes, are frequently poor and financially unsophisticated. Sarin calls for regulators to use the data of how banks reacted to this regulation to improve regulatory efficacy.
• Banks in the United States charge higher overdraft fees compared to banks in Israel and the United Kingdom, Aluma Zernik of Pagaya explains in an article in Georgetown Journal of Poverty Law & Policy. Zernik underscores that overdraft fees in the United States are sometimes non-marginal in relation to the overdraft cost because of less strict regulation­­­—especially on exploitative offers that bundle checking accounts with overdraft services. On the other hand, Zernik says that banks in Israel and the United Kingdom do not charge higher fees because of the increased risk of regulatory action if the industry were to raise fees in these countries. Zernik attributes this difference in fee amounts to the increased “regulatory and reputational risks” in the United Kingdom and Israel that “curb banks’ ability to exploit such market failures.”
• Would limiting overdraft charges help low-income households benefit from banking services? Jennifer L. Dlugosz of the Board of Governors of the Federal Reserve System, Donald P. Morgan of the Federal Reserve Bank of New York, and Brian T. Melzer of the Tuck School of Business argue “yes” in a report provided in cooperation with the Federal Reserve Bank of New York. They found that low-income households in states with overdraft coverage were more likely to have a bank account. In addition, high-income households did not show any change in bank account ownership, which Dlugosz, Morgan, and Melzer cite to demonstrate that overdraft limits only affect low-income households.
• The Consumer Financial Protection Bureau should update the model form that financial institutions use for getting consumers to opt-in to their overdraft service, according to Jonice Gray Tucker of Buckley LLP and several coauthors in an article in The Business Lawyer. Consumers have a private right of action against financial institutions that do not get their opt-in consent, but Congress created a safe harbor for financial institutions that use a model form or a substantially similar substitute. Tucker and her coauthors argue that the model form should help consumers make decisions about overdraft today, but it reflects the industry’s overdraft practices in 2009 and puts financial institutions at risk of non-compliance with financial legislation.

IN THE NEWS

• The U.S. Department of Energy announced its intent to build long-distance, high-voltage energy transmission facilities, according to its Building a Better Grid Initiative. To help meet emission reduction goals, the Energy Department explained that it would increase transmission lines that transfer energy between renewable energy generation sites. The Energy Department also stated that it would research where transmission lines are most needed and collaborate with federal, state, and tribal entities in making these decisions. To streamline the development of transmission lines, the Energy Department proposed using various financing tools to reduce investor risks because energy projects usually require substantial upfront investments but take long periods to return a profit. Moreover, the Energy Department stated that it will make permitting for transmission lines more efficient so that infrastructure can be built faster.
• The U.S. Department of Agriculture announced a 10-year plan to respond to the wildfire crisis in the United States. The Agriculture Department outlined that it would work with the U.S. Department of the Interior, Tribes, and local stakeholders to identify high risk areas and implement “fuels and forest health treatments” to reduce the risks of fires spreading. The Agriculture Department and other agencies have access to almost $3 billion from the Infrastructure Investment and Jobs Act to carry out this work. Secretary of Agriculture Tom Vilsack stated that working against wildfires “is essential to the future” of both U.S. land and the people who live on it.
• Over 150 former employees of the U.S. Environmental Protection Agency (EPA) sent an open letter to Virginia state senators reportedly asking them to reject the Virginia governor’s nomination of Andrew Wheeler to be Virginia’s Natural Resources Secretary. The former EPA employees reportedly wrote that Wheeler, a former coal lobbyist, treated polluters favorably and “rolled back rules to cut greenhouse gases” during his time as EPA Administrator. Macaulay Porter, press secretary for the governor, responded that Wheeler would protect the environment. Democrats hold a two-vote majority in the Virginia Senate and claim to have the votes to defeat the nomination.
• The Center for Devices and Radiological Health—a branch within the U.S. Food and Drug Administration—issued a strategic plan for its Health of Women Program. The program attempts to “address the steadily growing importance of sex- and gender-specific issues” related to medical devices and their regulation. The center establishes three primary priorities, which includes a roadmap for research on women’s health and medical devices. The center noted in its plan that most biomedical research is based on studies in males, and highlights that female data “are prerequisite” to advancing women’s health in general and medical devices in particular.
• Attorneys general from 46 states requested that an appeals court revive their lawsuit against Meta, which was known as Facebook at the time of the original suit. The coalition argued that the court prematurely denied their earlier complaint that Facebook gained a monopoly over social networking platforms through its purchase of Instagram and WhatsApp. The coalition also argued that the court incorrectly analyzed Facebook’s acquisition of Instagram and Whatsapp as independent events, rather than as parts of a concerted effort to gain a monopoly. New York Attorney General Letitia James cautioned against the social media giant, stating that Facebook has exploited its size to “force small companies out of business and reduce competition.”
• The Consumer Financial Protection Bureau (CFPB) published a bulletin discussing how medical debt collectors and credit bureaus can comply with rules under the new No Surprises Act. The Act—which U.S. Department of Health and Human Services Secretary Xavier Becerra praised as “the most critical consumer protection law since the Affordable Care Act”—established protections from certain types of unanticipated medical bills. CFPB Director Rohit Chopra called the bulletin a “reminder” for debt collectors and credit bureaus “not to collect on or furnish credit reporting information about invalid medical debt.”
• A federal court banned Martin Shkreli—former CEO of Vyera Pharmaceuticals—from participating in the pharmaceutical industry because he suppressed market competition for Daraprim, which is a drug that treats parasitic infections for immunocompromised individuals. The court also ordered Shkreli to pay back $64.6 million that he received in profits from the anticompetitive activity. The court found that Shkreli first began his scheme of monopolizing Daraprim by purchasing the rights to the drug and raising its price substantially. Shkreli also imposed restrictions on Daraprim distribution contracts. This prevented distributors from selling the drug without Vyera’s permission, which limited generic drug companies’ ability to study Daraprim and release a generic and less costly version. Federal Trade Commission chair Lina Khan praised the ruling, stating that it “should be a warning to corporate executives everywhere” who engage in anticompetitive behavior.
• The Federal Motor Carrier Safety Administration announced the details of a pilot program, called the Safe Driver Apprenticeship Pilot, that would allow people between the ages of 18 and 20 to drive commercial trucks between states. A similar pilot program was proposed previously in September 2020, but was never executed. The Infrastructure Investment and Jobs Act, however, required the agency to establish a program that is “substantially the same” as the earlier proposed version. The program is part of a broader trucking action plan aimed at “building a next generation trucking workforce” and addressing other employment issues in the trucking industry.

WHAT WE’RE READING THIS WEEK

• In an article in the Harvard Environmental Law Review, Anthony Moffa, professor at the University of Maine School of Law, discussed how the presence of radon in prisons violates the U.S. Constitution and endangers prisoners, who are disproportionately people of color. Radon, Moffa explained, is dangerous because it is a “odorless and invisible radioactive gas” that can cause cancer. Moffa discussed that the U.S. Supreme Court has already found that the Eighth Amendment’s ban on “cruel and unusual punishments” extends to inhumane prison conditions and argued that exposure to radon in prisons is one such inhumane condition. Moffa concluded that lawsuits brought by prisoners can be challenging to win because it is difficult for plaintiffs to prove that officials had knowledge of harmful substances, and he emphasized that some reformers have suggested removing knowledge requirements altogether.
• In an article in the Yale Journal of Law & Technology, Christopher Morten, professor at Columbia Law School, and Charles Duan, policy fellow at American University, argued that the United States government can use COVID-19 vaccine patents without pharmaceutical companies’ permission to increase supply for under-vaccinated populations. Morten and Duan contended that a provision in patent law allows the federal government to take control of patents that are licensed with the U.S. Patent and Trademark Office. Morten and Duan noted that once the United States takes control of the pharmaceutical companies’ patents, it can release the information needed to make COVID-19 vaccines, allowing manufacturers to increase production of the vaccine.
• In a forthcoming article in the Duke Law Journal, Mason Marks, assistant professor at the University of New Hampshire Franklin Pierce School of Law, examined the use of artificial intelligence and other computer models on FDA regulation. Marks discussed three ways FDA has incorporated technology into the regulatory process, including its use of technology-simulated clinical trials. Marks examined the relationship and impact of such technologies on administrative law, highlighting debate among scholars that indicates “administrative law may be unprepared for automated FDA regulation.” Marks concluded by calling on FDA to modernize its regulatory regime in relation to these new technologies. Marks proposed incorporating principles from artificial intelligence ethics, such as using independent boards to review models, as one way to modernize.

FLASHBACK FRIDAY

• In an essay for The Regulatory Review, Adam M. Finkel, professor at the University of Michigan School of Public Health and former executive director of the Penn Program on Regulation, warned against the dangers of radon gas found in homes across the United States. Finkel estimated that in 2013 there were 8 million U.S. homes where radon levels were “likely to be especially high,” but only one quarter of these homes had ever been tested, despite tests costing less than $40. Finkel noted that because radon caused approximately one-sixth of all U.S. lung cancer cases, federal funds should be used to improve testing and mitigation efforts.

Veterans leave the military with a wide variety of skills, ranging from bomb disposal techniques to aerial combat strategies. These skills make veterans and civilian officials who leave the U.S. Department of Defense attractive hires for businesses that contract with the Defense Department, such as Raytheon, Lockheed Martin, and Boeing.

But when senior military and civilian officials begin working for defense contractors after leaving their government positions—as more than 1,700 did from 2014 to 2019—concerns of potential conflicts of interest arise. The movement of personnel from their roles in government to relevant industries, and sometimes back again, is known as a revolving door, and the Defense Department restricts former personnel from certain employment activities with defense contractors.

But the existing post-government employment regulations may not be strict enough, according to a recent report by the U.S. Government Accountability Office (GAO), the government oversight arm of the U.S. Congress. Specifically, GAO recommends that the Defense Department amend the Defense Federal Acquisition Regulation Supplement (DFARS) to require that defense contractors affirm their employees’ compliance with updated lobbying restrictions in any contract proposal.

The Defense Department contracts with private companies to provide a wide range of goods and services. When a business wants to “win” a contract with the Defense Department—whether to supply aircraft or equip naval vessels with new radar—the company must submit a contract proposal for consideration, providing details including pricing and completion timelines. In these proposals, the business must also certify that they meet a range of DFARS requirements, such as cybersecurity minimums and proper ammunition labeling.

This self-certification model means that companies—known as contractors—implement internal control programs for each of the DFARS requirements. Companies that fail to comply could face hefty fines and penalties.

Now, in its recent report, GAO recommends amending DFARS requirements to reflect updated lobbying restrictions from the National Defense Authorization Act (NDAA) requiring contractors to certify their compliance with the NDAA’s post-government employment restrictions.

The NDAA prohibits former flag officers—generals and admirals—and their civilian equivalents from lobbying the Defense Department or other executive branch officials about defense matters for up to two years after departing their government positions. Private companies compete for contracts, and the federal legislation ensures former officers don’t use their relationships—through lobbying current officials—to assert improper influence the contract selection process.

Although the NDAA and other ethics laws forbid such lobbying efforts, GAO suggests that amending the DFARS would give defense contractors more incentives to prevent their own employees from lobbying. Strong constraints on the defense industry’s revolving door are critical to promote the “public integrity of the government’s decision-making processes,” GAO emphasizes.

The DFARS changes, GAO argues, would reinforce ongoing efforts by the government to address lobbying and other ethical concerns about post-government employment by creating a “sense of shared accountability between the employees and the contractors who hire them.” Furthermore, a regulation updated to follow GAO’s recommendation would safeguard the Defense Department from approving contracts with “companies whose employees violate the lobbying restriction with their employers’ knowledge.”

One reason GAO recommends adding a self-certification requirement on lobbying activity to contractor proposals is that defense contractors currently have “varying forms of compliance practices in place to address lobbying.”

For example, of the 11 major defense contractors that responded to GAO’s survey, nine have a formal program in place to monitor compliance with the NDAA’s lobbying restrictions—but the programs have differing and potentially ineffective protocols. Just six contractors reported that their standard job application procedures involve asking candidates whether they are subject to any lobbying restrictions.

Separate from the recent NDAA lobbying restrictions, however, defense contractors already certify their employees’ compliance with several other post-government employment restrictions that were issued by a 2011 DFARS amendment. In fact, GAO found that defense contractors generally had effective internal programs in place to promote awareness and compliance with these previous post-government employment restrictions—suggesting that adding the NDAA’s updated lobbying restrictions to the contractor self-certification requirement could be just as effective.

GAO previously reported on the Defense Department’s post-government employment regulations in 2008, then recommending the need for greater contractor disclosure of compliance with the applicable restrictions. The Defense Department concurred with that earlier GAO report and, according to the latest report, implemented all recommendations for executive action.

In its recent report, in addition to calling for more effective internal contractor compliance programs, GAO also found that the Defense Department has since “taken steps designed to increase employee awareness” of post-government employment restrictions. These measures include a publicly accessible website for the Department of Defense Standards of Conduct Office, which publishes digital toolboxes for ethics training and procedural guides for current personnel seeking employment with a defense contractor.

The Defense Department has concurred with GAO’s latest recommendation to amend the DFARS to require contractor compliance with updated lobbying restrictions, internally referring the recommendation to the Under Secretary of Defense for Acquisition and Sustainment for further action.

The Republican Party once championed the power of bureaucracy, but now, the party criticizes administrative agencies and seeks to repeal a landmark decision it once applauded, one legal expert argues.

In a new article, Craig Green, professor at Temple University Beasley School of Law, seeks to explain this observed shift. He argues that conservatives changed positions suddenly around 2013, when they began to argue for overruling a longstanding legal doctrine calling for courts to defer to agency bureaucrats. According to Green, conservatives’ new argument threatens to make agencies, the U.S. Congress, and the President less democratically accountable and less capable of responding to changing needs.

Green explains that conservatives’ target is Chevron deference—a doctrine established by the U.S. Supreme Court in the 1984 case Chevron v. Natural Resources Defense Council. The doctrine directs courts to defer to an agency’s interpretation of ambiguous law, as long as the interpretation is reasonable.

Green identifies a complete reversal in conservatives’ position on Chevron deference today as compared to 50 years ago.

Green observes that in the 1980s, President Ronald Reagan wanted to relax environmental restrictions but could not achieve his goals through Congress, so he decided to deregulate from within the executive branch by using his appointed bureaucrats. Accordingly, President Reagan adopted a litigation policy of encouraging judicial deference to agency decisions, Green notes.

These efforts, according to Green, culminated in the landmark Chevron decision. The decision required courts to yield to reasonable agency interpretations of statutes, which gave Presidents wide discretion to fill statutory gaps and craft policy outside of Congress.

Green argues that Republicans viewed the Chevron decision as a success for the Reagan Administration, and conservatives chastised critics of bureaucracy after the decision. According to Green, some conservative voices even hinted that deference to agencies was constitutionally required.

Today, on the other hand, Green contends that mainstream conservatism stands against Chevron deference, with the most recent Republican Party platforms condemning regulatory agencies and calling for judicial action to stop them.

Green argues that this shift against Chevron deference is striking because conservatives have not acknowledged their previous support for the doctrine and have justified both positions by using the same philosophy: constitutional originalism, a legal view that focuses on the intent of the U.S. Constitution’s framers. But to Green, conservatives’ new argument is not focused on the framers’ views. Instead, he argues that their position stems from partisan politics under the convenient guise of a timeless legal philosophy.

By examining conservative think tank publications, legislative proposals, judicial decisions, and Republican presidential platforms from the 1980s to the present, Green asserts that conservatives nearly universally accepted Chevron as constitutional until President Barack Obama’s reelection in 2012. At that point, for the first time, conservatives criticized Chevron deference as unconstitutional and began to advocate constitutional litigation as a way to end it, Green argues.

Green finds some developments in the shift curious. For example, he observes that Supreme Court Justice Anthony Kennedy had ample opportunity to raise constitutional questions about Chevron deference during his 43 years on the federal bench before he first condemned it in a concurring opinion in Pereira v. Sessions in 2018.

Green also points out that Justice Clarence Thomas, despite applying deference as recently as 2013 by joining an opinion from Justice Antonin Scalia, began to argue that Chevron deference was unconstitutional in a series of decisions in 2015.

Some scholars have argued that opinions on deference change in tandem with party politics. The party in the White House will favor deference to its own administration, while the opposing party will attack it.

But Green pushes back by claiming that the historical record does not support that narrative. He finds that mainstream conservatives supported agency deference through multiple Democratic administrations, and they later opposed deference despite the election of President Donald J. Trump.

So why the sudden change in 2013?  And why did conservatives maintain their opposition to Chevron even under the Trump Administration?

Green contends that a strongly conservative federal court system could be lending Republicans confidence that closer, less deferential review of agency decisions will lead to favorable outcomes.

Republican Presidents nominated 13 of the 17 most recent Supreme Court appointees and over half of sitting federal appellate judges. The Trump Administration also ensured that its judicial appointees held anti-agency viewpoints, according to Green.

By contrast, when the Supreme Court decided Chevron, nearly two-thirds of appellate judges were Democratic appointees.

Green argues that unlike Justice Scalia’s generation, which hoped to protect presidential policymaking from liberal judges, contemporary conservatives have recognized that they can exert political power in the judiciary by using this appellate court advantage and by invoking flexible constitutional principles.

Green also suggests that the new originalist opposition to Chevron could be related to a partisan focus on the “deconstruction of the administrative state,” as former White House Chief Strategist Steve Bannon reportedly described. Green argues that President Trump implemented a deregulatory agenda using the regulators themselves.

Green notes that the Trump Administration employed hostile language toward agencies and undermined them through funding cuts and furloughs. Green argues that the Administration appointed agency heads hostile to their departments and worked to undercut trust in independent experts.

Green also warns that “not all precedents are created equal” and that readers should take seriously the Supreme Court’s potential to overrule Chevron apart from political changes in the executive branch. He contends that, if the Court does overturn Chevron, it could result in the invalidation of hundreds of prior decisions applying deference.

Green also claims that undermining deference through the courts could shift power away from Presidents, who would no longer be able to execute policy through agencies. As a result, the “dead hand” of prior administrations would restrain Presidents, and dynamic policymaking would be more difficult. Green also argues that overruling deference would constrain Congress from creating agencies to handle new, unforeseen problems.

Green suggests that overruling Chevron could ultimately result in more conservative law being made. He argues that conservative judges might selectively review agency decisions and grant deference to agency interpretations that align with conservative policy goals while scrutinizing interpretations that clash with conservative agendas.

According to Green, partisan politics should not dictate the future of Chevron deference, but they must not be ignored in understanding the history and constitutionality of the doctrine. Green argues that both liberals and conservatives must acknowledge the deeper issues at play in the debate over Chevron’s future. Only by recognizing the full consequences of overruling Chevron can the Court avoid creating a disaster, he concludes.

Nine-year-old Ka’Mauri Harrison was taking a test online when his little brother ran into his room and tripped over a BB gun. Ka’Mauri moved the BB gun from the floor to out of harm’s way. His school tried to expel him for the incident and ultimately suspended him for five days.

“Ben,” a 12-year-old Latinx student with a hearing impairment, briefly showed his classmates his katana sword used for martial arts during virtual instruction. Like Ka’Mauri, he was suspended for five days and faced expulsion.

Isaiah Elliot, another 12-year-old student of color with a disability, momentarily held a toy NERF gun during his online class. His school suspended him and called the police to conduct a welfare check before notifying his parents of the incident.

In a recent article, Victor M. Jones, Education Special Counsel at the NAACP Legal Defense and Educational Fund, recounts these students’ stories of exclusionary discipline in virtual schools to examine the continued use of exclusionary disciplinary policies in online classrooms. Jones also analyzes these students’ stories to illustrate new constitutional challenges raised by the regulation of student behavior at home through virtual platforms.

Exclusionary discipline occurs when a student is removed from the classroom setting due to a behavioral infraction, such as by a suspension, expulsion, or detention. These practices result in disproportionate referral of students of color and students with disabilities out of school and into the juvenile justice system, often referred to as the “school-to-prison-pipeline.” Students who experience exclusionary disciplinary practices such as suspension and expulsion are at significantly higher risk for involvement in the criminal justice system, Jones explains.

Exclusionary discipline became a part of most school district regulations in response to the federal Gun-Free Schools Act of 1993, which mandated a one-year expulsion of any student who brought a weapon on school grounds. Soon after, states passed various “willful disobedience” statutes that punished nonviolent behavior with suspension and even expulsion. The U.S. Department of Justice also allocated $68 million to establish school resource officer programs that placed law enforcement officers in schools. These programs formally codified the connection between school and the juvenile justice system.

Jones explains that these federal and state policies, in the name of student safety, have led to negative unintended consequences for students, especially Black and Latinx students and those with disabilities.

Jones warns that “at least two decades of multi-disciplinary research finds that the use of exclusionary discipline practices against children in schools does not serve its goals of reducing disruptive and unsafe behavior.”

Furthermore, Jones shows that these types of disciplinary measures may even lead to lower academic achievement. The COVID-19 pandemic and the rise of virtual schooling not only amplifies the inappropriateness of exclusionary discipline but also presents new legal challenges that schools need to address through new regulation, Jones argues.

These equity issues only compound with more constitutional issues in the virtual setting, Jones explains. The invasion of school disciplinary consequences within students’ homes through virtual learning introduces privacy and free speech concerns. For example, families whose children face exclusionary discipline in virtual school claim that schools may not regulate what items they keep in their homes, such as martial arts swords and toy guns. Jones worries schools might violate free speech by disciplining for posters hung in the home without new regulations for virtual school. Parents argue that use of images of their children in their home recorded during virtual class in disciplinary hearings are a violation of their right to privacy in their own home.

Jones does not stop at privacy concerns: The extension of weapons-free policies to the virtual space without explicit notice likely violates students’ right to due process, argues Jones. And the continued disproportionate use of exclusionary practices against students of color implicates the Equal Protection Clause of the U.S. Constitution.

Government entities are aware that better regulation is needed to ensure equitable school disciplinary policies. Recently, the Office for Civil Rights (OCR) issued a request for public comment on the equitable administration of school disciplinary policies. OCR acknowledged in its request that the current implementation of school disciplinary policies fails to meet the aims of civil rights laws and relevant regulations.

OCR’s request explains that, in 2018, the U.S. Government Accountability Office and the U.S. Commission for Civil Rights (USCCR) found that Black students, boys, and student with disabilities were disproportionately disciplined in every type of public school setting.

Similarly, in a 2019 report on the use of exclusionary discipline, the USCCR reported that Black, Latinx, and Native American students do not commit more disciplinable infractions than their white classmates but receive harsher and longer punishments than their white peers for the same behaviors.

Jones recommends that school districts reimagine their disciplinary policies and implement distinct disciplinary regulations for virtual platforms. He argues that these changes are necessary to address the various new constitutional issues presented by online classrooms and racial and disability discrimination. He advocates the development of disciplinary policies explicitly for virtual school. “Weapons-free” zero-tolerance policies and the Gun-Free Schools Act should not extend into students’ homes through online class, he argues. To safeguard student and family rights to privacy during virtual school, districts should encourage students to use neutral virtual backgrounds and forbid them to record their classmates during virtual school.

Jones concludes that the COVID-19 pandemic presents a moment for innovation, and he urges school districts to prioritize keeping students in school and connected to their classrooms—regardless of whether their education is online or in-person.

Last week, President Joseph R. Biden and Vice President Kamala Harris spoke in Atlanta to garner support for the John R. Lewis Voting Rights Advancement Act of 2021, which must pass in the U.S. Senate before it can become law. Some Black Americans, though, do not believe that the President has expended enough political capital to get the voting rights bill through the U.S. Senate, especially as voter suppression laws spring up in states across the country.

Indeed, many of the Georgia activists who mobilized voters for the 2020 election boycotted the President’s speech in Atlanta because they do not believe that the President has “done enough to advance matters of racial equity, particularly voting rights.” Voter protection stands as a core pillar of American democracy, and as midterm elections approach, “justice too long delayed” could ultimately result in “justice denied.”

Much the same could be said of the pursuit of improved justice in policing. The George Floyd Justice in Police Act, which has passed in the House of Representatives, awaits Senate approval.

But a focus on stalled legislative efforts need not lead the public to overlook how, in other key areas, the Biden Administration has made tangible strides to promote equity through executive action and earlier legislation. As Marc Morial, the President and CEO of the National Urban League, has noted, President Biden has done some historic work that has had an impact on Black Americans, even though this work has largely gone under the radar.

One of the President’s first executive orders directed every federal agency to address the lasting impacts of systemic racism on Black communities, advance racial equity, and support underserved communities. As Vice President of the Joint Center for Political and Economic Studies, Jessica Fulton has said an acknowledgment from the U.S. government that it needs to tackle racial equity is “actually a very big deal.”

President Biden also led the way by following through on his promise to appoint one of the most diverse cabinets in U.S. history.

The U.S. COVID-19 relief package, the American Rescue Plan Act, increased economic opportunity for Black Americans through efforts including additional funding to social safety net programs and by federal support and investment in Black-owned businesses. The plan provided cash relief for low and middle-income Americans, which cut Black child poverty by 40.1 percent. This relief lifted approximately 420,000 Black children out of poverty between June and July 2021 and was estimated to cut the Black child poverty rate by more than 50 percent in 2021.

In addition, the American Rescue plan provided Historically Black Colleges and Universities (HBCUs) with $3.7 billion in pandemic relief, and 45 HBCUs received $1.6 billion in debt relief.

The Biden Administration has also bolstered educational equity through a series of administrative actions. For example, in September, President Biden issued an executive order establishing the “White House Initiative on Advancing Educational Equity, Opportunity, and Excellence through HBCUs.” This initiative will support HBCUs by eliminating systemic barriers that impede their participation in federal programs.

In October, President Biden issued another executive order launching a White House Initiative to advance educational equity, excellence, and economic opportunity for Black Americans, designed to dismantle entrenched disparities that “continue to plague America’s education system.”

The Biden Administration has also aimed to reduce health disparities. For example, the American Rescue plan included healthcare initiatives around Black maternal health and an equitable COVID-19 response.

The Biden Administration has also implemented criminal justice reforms. In September, the U.S. Department of Justice banned the use of chokeholds and carotid restraints by federal law enforcement officers except where deadly force is necessary and imposed new restrictions on no-knock warrants.

These uses of police force have resulted in the deaths of unarmed Black Americans, including Eric Garner, who was killed in an NYPD officer’s chokehold, and Breonna Taylor, who Louisville police officers killed in her home while executing a no-knock warrant. Of course, although the Justice Department’s new policy is meaningful, it does not apply to state law enforcement officers, so Congress must still pass the George Floyd Justice in Police Act to implement these reforms nationwide.

Even with respect to voting rights, despite Republican opposition to a federal voting rights law, the Biden Administration has taken action to use executive power to aid in voter protection. The Justice Department, for example, has doubled its staff dedicated to voter protection, so the government can bring more cases like the ongoing lawsuit against Georgia for voting laws that target the Black voters. President Biden also issued an executive order to leverage the resources of the federal government to provide access to voter registration.

Overall, the Biden Administration has taken numerous policy actions that seek to advance equity and opportunity for “Black people and communities across the country.” Many of these initiatives address high-priority policy issues for Black Americans.

Two summers ago, millions of Americans protested nationwide for structural anti-racist reforms and hoped that a new Administration would usher in this change. Many Black Americans believe, as Dr. King did, that “justice for Black people cannot be achieved without radical changes in the structure of our society.” A recent Pew study found that 58 percent of Black adults say most of the nation’s laws and major institutions need to be completely rebuilt compared to 18 percent of white adults.

Still, as the United States becomes more divided along racial and political lines, radical change proves increasingly difficult. It is too early to tell whether this Administration will have a lasting structural impact on racial equity in the United States.

For now, the Biden Administration says that fulfilling its objectives for voting and policing bills remains a priority and it boasts of additional equity efforts that could be achieved with the passage of the Build Back Better plan. Indeed, last week in Atlanta, President Biden, referring to the Voting Rights Act, asked a simple question of the nation’s public officials: “Do you want to be on the side of Dr. King, or George Wallace?”

If Dr. King’s words from a Birmingham jail shed any light on the Administration’s current political impasse with Congress, “progress never rolls in on wheels of inevitability” but requires “tireless effort.”

Law and technology overlap in many ways, but scholars and regulators tend to focus on incompatibilities between the two. I propose that they also explore synergies between law and tech, and address frictions in a way that preserves them. This exploration should begin with blockchain and antitrust.

In recent months, a body of blockchain antitrust cases has emerged. Looking at the cases in isolation could give the impression that the interaction between blockchain technologies and antitrust laws is only a point of friction.

In Gallagher v. Bitcointalk.org, a Bitcoin enthusiast filed a claim against the Bitcoin Foundation and the forum owners for excluding him from the website. He argued that the defendants conspired against him to prevent new competition in the space, therefore violating Section 1 of the Sherman Act.

In another case, United American Corporation v. Bitmain, the plaintiff argued that various firms—including those of prominent Bitcoin investor Roger Ver—schemed to hijack the Bitcoin Cash network, here again in violation of Section 1 of the Sherman Act.

More recently, in In re Tether and Bitfinex Crypto Asset Litigation, plaintiffs argue that Tether and Bitfinex have coordinated to manipulate the price of Bitcoin. They seek $1.4 trillion in compensation.

All these cases are directed against the blockchain ecosystem—for good or bad reasons. They provide only a partial view of the relationship between blockchain and antitrust.

As I argue in a new book, Blockchain + Antitrust, regulators should approach blockchain and antitrust from a cooperative angle. Both blockchain and antitrust seek to decentralize economic opportunities despite frictions that can arise. In fact, not only do blockchain and antitrust have the same focus, but they also complement one another and create synergies in a “1 + 1 = 3” fashion.

In the field of antitrust, if big tech companies abuse their dominant positions in the advertising market against specific blockchain, blockchain participants could enforce the rules against monopolization and claim for damages. They could also enforce anti-cartel rules, should on-chain or off-chain agents coordinate their behavior against the interest of decentralized communities.

Code alone cannot provide a complete solution, and the law can overcome many of its shortcomings. Policymakers and regulators could use blockchain to supplement antitrust rules where such rules prove ineffective or unenforceable. Empirical works show that agencies detect few infringements to antitrust laws or cannot enforce the laws when jurisdictions are mutually unfriendly.

Blockchain removes intermediaries with the power of command and control, which de facto eliminates abuses of that power. Furthermore, blockchain aligns value creation with value capture. For example, through NFTs, creators can capture the economic value of what they create. This alignment works in favor of antitrust enforcers. And agencies could also use blockchain to improve their merger control processes and, eventually, decentralize antitrust enforcement. Law alone cannot provide a complete solution, and code can help achieve the objectives set by the legal rules and standards.

Despite being two complementary parts of the same equation, the cooperation between blockchain and antitrust requires action. If not, frictions between the two will transform into retaliation strategies that reduce the common good. Cooperation requires a proactive approach followed by legal and tech communities.

On the side of public institutions, cooperation requires three actions. First, regulators should direct enforcement activities toward the practices that artificially recentralize blockchains. Including punishment for illegal behaviors implemented outside the chain to protect blockchain participants.

Second, when imposing remedies, courts and regulators should preserve blockchain decentralization. The same goes for the design of new regulations. If regulators force blockchain centralization for the convenience of applying the law, they will reduce its differentiation from centralization systems to the point where blockchain’s chances of survival will become too thin.

Finally, regulators should create legal comfort zones for blockchain innovation. They should also be concerned about regulatory capture and create a task force to prevent and document it.

On the side of blockchain communities, cooperation requires enabling easier legal enforcement by implementing new technical features where necessary. These features could be voting mechanisms to decide on impacting immutability, generalize modifiers, enums, and chameleon hash, or bypass immutability by pruning blockchains. Such features could also take the form of templates and legal factories.

There is a difficult balance between enforcement capacity and decentralization, but not an impossible one.

The stakes are high. Antitrust is at the very center of most discussions about big tech companies. It will soon be equally prevalent in blockchain ecosystems. We need to foster cooperation between law and technology, and eventually extend the “law + technology” movement beyond antitrust.

Low-income, minority, and tribal communities disproportionately suffer from the distribution of pollution in the United States.

In 1994, President Bill Clinton directed federal agencies to identify programs, policies, or activities that imposed disproportionate and adverse effects on “minority populations and low-income populations in the United States.” For example, the U.S. Environmental Protection Agency (EPA) has since developed a mapping tool called EJScreen that combines environmental and demographic data to identify geographic regions in the United States that require additional analysis or outreach within EPA programming.

By employing EJScreen, EPA identifies the “most overburdened” communities in the United States through a series of environmental and demographic indicators, such as proximity to hazardous waste sites and the percentage of low-income adults in a community. Once a community is identified as overburdened, EPA provides “additional consideration, analysis or outreach” to prevent further harm from EPA permitting, enforcement, or compliance activities.

Upon President Joseph R. Biden assuming office, his Administration committed to securing the fair implementation of environmental laws, regulations, and policies for all U.S. citizens, regardless of race or income. By executive order, President Biden announced the Justice40 Initiative, a government-wide approach directing federal agencies to deliver 40 percent of all benefits from federal investments in climate and clean energy to disadvantaged communities.

Federal agencies have already taken steps to comply with this initiative. In July 2021, the director of the Office of Management and Budget, the chair of the Council on Environmental Quality, and the National Climate Advisor issued guidance on achieving the initiative’s goals. Among other things, the guidance provides federal agencies with a sample of indices for determining whether a community is disadvantaged.

The White House Environmental Justice Advisory Council—a public advisory committee established by executive order—aims to support the federal government’s efforts to address current and historic environmental injustice. In May 2021, the Council issued recommendations on the development of a climate and economic screening tool, which would include interactive maps highlighting disadvantaged communities throughout the United States.

In this week’s Saturday Seminar, experts discuss recent scholarship on regulatory aspects of environmental justice.

• In an article published in the Fordham Environmental Law Review, Assistant District Attorney William C.C. Kemp-Neal argues for the establishment of a federal preclearance process to govern projects that could create disproportionate environmental harms in communities of color. Kemp-Neal suggests this preclearance process could function like Section 5 of the Voting Rights Act of 1965, which mandated certain jurisdictions prove that proposed changes to their voting laws would not discriminate against minority groups before enactment. Kemp-Neal elaborates that such a process could prevent polluters from placing “locally unwanted land uses,” such as hazardous waste sites, in majority-minority communities already suffering from the effects of environmental racism.
• Even in the absence of substantive environmental justice legislation, state environmental agencies could protect communities of color from disparate environmental harm through pathways provided by Title VI of the Civil Rights Act, according to Brenda Mallory of the White House Council on Environmental Quality and David Neal of the Southern Environmental Law Center. In an article in the Harvard Environmental Law Review, Mallory and Neal propose that Title VI—which prohibits racial discrimination in state environmental agencies that receive federal funds—grants state environmental agencies the authority to consider the potential disparate impact of existing environmental laws on communities of color. Mallory and Neal suggest that if state environmental agencies show that an existing law has a disparate impact on communities of color, the law should be subject to judicial review.
• In an article published in the Loyola Law Review, Rebecca Bratspies of the CUNY School of Law argues for the adoption of a “Renewable Rikers” proposal as a way to benefit New York City residents in the wake of the Rikers Island jail’s proposed closure. Bratspies argues that by using the island to house sustainable energy initiatives, wastewater treatment facilities, and green spaces, rather than noxious power-generation facilities, overburdened communities could gain material environmental improvements. As many of these overburdened communities also suffer from policing policies that disproportionately sent their members to the Rikers Island jail, Bratspies suggests the Renewable Rikers proposal would provide a unique opportunity to tie environmental gains to mass decarceration efforts.
• In an article in the Loyola Law Review, Clifford J. Villa of the University of New Mexico School of Law argues for a new definition of “environmental justice.” He argues that environmental justice has expanded since its development in the 1980s to include a broad range of social justice concerns. Villa also suggests that the traditional definition of environmental justice used by EPA obscures important differences by referencing “the fair treatment and meaningful involvement of all people.” Definitions focused on specific distinctions such as race also often fall short, according to He proposes instead a definition based on Martha Fineman’s “vulnerability theory”—the idea that everyone is vulnerable in some way and that some people are more vulnerable to environmental harms than others. Villa argues that a complete definition of environmental justice should ask three key questions: “What groups are most affected? Why are they affected? What can be done to remedy the problem?” Villa contends that these questions allow observers to account for unique circumstances and uncover the causes of disparate impacts. He cautions that definitions of environmental justice must continue to include race and ethnicity because of the persistence of widespread discrimination and inequality.
• The environmental justice movement ought to focus more on people, which are its greatest strength, argues Rachael Salcido a professor at the University of the Pacific McGeorge School of Law in an article in the UCLA Journal of Environmental Law and Policy. Salcido suggests that current scholarship focuses too heavily on elusive definitions of environmental justice. She instead promotes specific steps that she argues would effectively harness the power of people. Salcido recommends increasing the use of environmental justice assessments—tools prepared to analyze data about possible environmental justice problems. She argues that federal law should require a separate environmental justice assessment—independent of the typical environmental impact statement—for major federal proposals that would have a substantial environmental impact. Salcido contends that assessments would help empower people by providing concise information and should include public notice and comment. Mandating assessments would improve transparency, increase access to this information, and bring to light data that might be missing from other sources, according to Salcido.
• Marginalized communities are more vulnerable to the effects of climate change, natural disasters, pollution, and health crises, in part due to unequal distributions of green and blue infrastructure across and within those communities, according to Craig Anthony Arnold of the University of Louisville Brandeis School of Law. In an article in the William & Mary Environmental Law & Policy Review, Arnold explains that green and blue infrastructure refers to biotic and aquatic features—such as parks, tree canopies, open space, and retention of stormwater—upon which communities rely to provide water-related benefits, boost air quality, promote healthy activities, and build social cohesion. To ensure more equitable planning around green and blue infrastructure, Arnold recommends a model of co-governance that would partner local communities with government agencies. Arnold argues that other solutions fail in important ways: Top-down government programs tend to decenter actual community needs, and private or nonprofit efforts without community input can concentrate power among wealthy, elite, white individuals. Arnold contends that co-governance uses government resources while empowering local communities to make decisions that better serve low-income communities of color.

IN THE NEWS

• In a 6-3 decision, the U.S. Supreme Court temporarily blocked the Biden Administration’s mandate that businesses with 100 or more workers require those workers to vaccinate themselves against COVID-19 or undergo weekly testing. The Court reasoned that petitioners are likely to prevail in their charge that the Biden Administration lacks the authority to impose a vaccine-or-test mandate. In their dissent, Justice Stephen Breyer, Justice Sonia Sotomayor, and Justice Elena Kagan stated that this decision “seriously misapplies the applicable legal standards” and expressed that halting the mandate “stymies the Federal Government’s ability to counter the unparalleled threat that COVID-19 poses to our Nation’s workers.” The Court, however, allowed the vaccine-or-test mandate to remain in place for workers at health care facilities that receive federal funding.
• The Federal Aviation Administration (FAA) selected 50 airports to receive protection from 5G wireless signals, which will help prevent flight disruptions. The FAA stated that wireless companies providing the new 5G service agreed to temporarily turn off 5G transmitters near airports to reduce interference with aircraft instruments used in low-visibility landings. The FAA considered factors such as location, weather patterns, current severity of 5G interference, and traffic volumes to make selections for which airports would receive protection from 5G interference.
• The U.S. Environmental Protection Agency (EPA) announced it will assess whether leaded fuel used by piston-engine aircraft causes air pollution that endangers public health. According to the agency, piston-engine aircrafts release more lead emissions than any other source. Prior to regulating pollutants or activities, the agency must issue an endangerment finding based on its study of pollutants and sources of air pollution to determine if they “threaten human health or welfare.” EPA said it will issue an endangerment finding in 2022, allowing for public comment, and plans to issue a final finding in 2023.
• France’s Ministry of Social Affairs and Health announced it will lift its ban on blood donations from men who have sex with men. The ministry, in 2020, reduced a restriction on blood donations from men who have sex with men after sexual intercourse from 12 months to 4 months. The new rule will require sexual orientation to be removed from blood donation forms and remove any post-intercourse limitations beginning on March 16. France’s former health minister Marisol Touraine said the policy works to end “taboo and discrimination.”
• EPA announced that before registering new active ingredients in pesticides, it will evaluate their impact on endangered species. The new policy, which takes effect immediately, requires EPA to consult with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service on pesticides that may adversely affect endangered species or critical habitats. Assistant Administrator for EPA’s Office of Chemical Safety and Pollution Prevention Michal Freedhoff said that “protecting listed species and their habitats is essential to EPA’s mission to protect human health and the environment.”
• The Biden Administration released guidance for insurance companies to cover at-home COVID-19 tests. According to the U.S. Department of Health and Human Services (HHS), those with private health insurance can receive either prepaid at-home tests or reimbursement for tests by their health plans. The new requirement will allow people with qualifying insurance to obtain at least eight tests per month. HHS Secretary Xavier Becerra said the requirement for insurers is part of the Biden Administration’s “overall strategy” to increase access to at-home tests.
• The Louisiana Supreme Court ruled that hospitals in the state could continue to require their employees to be vaccinated against COVID-19. The court explained that the nature of the at-will employment doctrine allows hospitals to terminate employees for failure to comply with a vaccine requirement and that employees did not claim any “statutory or constitutional rights” to justify interfering with that doctrine. Warner Thomas, CEO and president of Oschner Health, the healthcare system named in the suit, said that the decision supported Oschner’s “right to enact policies that protect patients and staff.”
• The U.S. Government Accountability Office (GAO) recommended that the U.S. Internal Revenue Service (IRS) and the U.S. Department of Treasury review cryptocurrency kiosk registration requirements and require disclosure of kiosks’ locations. Cryptocurrency kiosks allow individuals to exchange money for digital currency. GAO found that virtual currency plays a growing role in human and drug trafficking. GAO reasoned that reviewing registration and reporting requirements, among other changes, will allow the IRS and Treasury Department to identify and monitor operations at high risk for illegal transactions.

WHAT WE’RE READING THIS WEEK

• In a recent Brookings Institution report, David Skeel, professor at the University of Pennsylvania Law School discussed the growing populist backlash to Chapter 11 of the bankruptcy code—the provisions allowing businesses to restructure themselves. Skeel argued that many have come to view Chapter 11 as unfairly benefiting “insiders” and “large corporations.” Skeel pointed to several elements that have contributed to the backlash such as the choice of venue rule that effectively allows a company to choose the judge that handles its case. Skeel concluded that these problems could lead Congress to enact significant reforms to bankruptcy law.
• In a recent article in the Cardozo Law Review, Raymond Shih Ray Ku, professor at Case Western University School of Law argued that pregnancy is a form of expression that should be covered by the freedom of speech provision of the First Amendment. Beyond the First Amendment’s traditional protection of the freedom of speech and press, Ku explained that the Supreme Court has expanded the definition to “protect expression and association more generally.” Ku concluded that although the First Amendment could someday be the only constitutional method with which to protect an individual’s right to choose an abortion, designating a specific constitutional right should not be necessary. Ku argued that the Constitution protects “liberty in general” and that this liberty is violated when the government forces an individual to remain pregnant.
• In a report for the Center for American Progress, Dylan Bruce, Tyler Gellasch, Todd Phillips, and Alexandra Thornton, argued that instead of relying on a third party, the U.S. Securities and Exchange Commission (SEC) should write its own environmental, social, and governance (ESG) disclosure rules, which would require public companies to disclose important information related to ESG. Bruce and his coauthors explained that challengers may raise objections about whether the SEC has the authority to appoint a third party, as opposed to a subordinate official or agency, to create ESG standards. In addition, Bruce and his coauthors argued that delegation to a third party may result in insufficient rulemaking because, for example, a third party may introduce bias into standards or limit public opportunity for comment. Bruce and his coauthors concluded that the SEC should write its own ESG standards to promote transparency and protection from systemic risk.

FLASHBACK FRIDAY

• In an essay in The Regulatory Review, Alice Kaswan, professor at the University of San Francisco School of Law, discussed the need for environmental and “social welfare advocates” to address how the transition away from fossil fuels will impact communities differently. Kaswan argued that in contrast to the traditional environmentalist approach, the environmental justice movement’s approach to balancing pollution reduction with “economic opportunities” is well-equipped to inform policies promoting the country’s shift to clean energy. She cited California’s attempts to direct revenues from its emissions trading program to underserved communities as a model of the environmental justice approach. Kaswan concluded by calling for environmental and climate justice advocates to form “real political alliances” that can prevent injustice during the transition to clean energy.

“We can no longer rely on these big superpowers to come in and save us.”

These words of biotechnologist Emile Hendricks capture the sentiment of countries unable to pay for the same quantities of COVID-19 vaccines as wealthier countries.

In Africa, Hendricks and others are currently working, with backing from the World Health Organization (WHO), to reverse-engineer the Moderna COVID-19 vaccine because the pharmaceutical company has not released the intellectual property rights for its vaccines.

Moderna, Pfizer, BioNTech, and other vaccine manufacturers have profited billions of dollars by selling their patented vaccines to wealthy countries, while nations such as Nigeria and Ethiopia endure the world’s lowest vaccination rates.

But the Biden Administration—despite publicly supporting a waiver of COVID-19 vaccine patents—has done little to help under-vaccinated countries lift the patents.

The Office of the United States Trade Representative (USTR)—the executive office that negotiates international trade and investments—has not pushed for an internationally proposed waiver of vaccine patents. South Africa, India, and other countries proposed such a waiver in 2020 at the World Trade Organization (WTO)—an international body that regulates international trade—but the USTR has yet to support the patent waiver as it was initially proposed. Nor has the office engaged in negotiations with the waiver’s opponents, such as the European Union.

With the emergence of the Omicron variant, members of the WTO indefinitely postponed a conference scheduled for November 26 that would have reinitiated discussions about the waiver. Critics lambasted the WTO for postponing the conference at a time when the Global South remains disproportionately unvaccinated and vulnerable to the Omicron variant.

Although the WTO conference was postponed, the Biden Administration can still push for a virtual general-member meeting at the United Nations (UN). General members at the UN can pass non-binding international recommendations by majority vote. The UN general members cannot waive the vaccine patents like the members of the WTO can, but a UN meeting could highlight the waiver debate and increase international pressure on countries that oppose the waiver.

International pressure from the Biden Administration can rebalance the waiver debate, but the Administration can also use domestic strategies to disclose patented vaccine technology.

For instance, the United States can use Moderna patents and Pfizer-BioNTech patents —which are licensed under U.S. patent law—without the companies’ permission to increase global vaccine production. Scholars argue that the Biden Administration can invoke a specific provision in patent law that would allow the government to take control of a patent. In effect, the Administration could override the pharmaceutical companies’ patents and publicly release the technology, enabling other manufacturers to ramp up vaccine production to address the global shortage.

The Biden Administration might be hesitant to use this option because of concerns about stifling private innovation and violating a constitutional prohibition against governmental takings of private property. Experts note, however, that there are still private incentives to innovate—such as grants and prizes for important inventions—and government use of a patent does not unconstitutionally deprive patent holders of the ability to use their own patents.

The Biden Administration may also threaten Moderna with a patent infringement lawsuit to draw Moderna to the negotiation table. The United States co-owns a patent on coronavirus vaccine technology, and Moderna and Pfizer, among others, rely on the technology to make their COVID-19 vaccines. Unlike Pfizer, Moderna has used the patent without paying for the license. Experts predict that an infringement suit could cost Moderna millions or even billions of dollars. Alternatively, experts argue that the Biden Administration should leverage a potential lawsuit to persuade Moderna to disclose its “patents, trade secrets, and other intellectual property” to other vaccine manufacturers.

Those opposing a vaccine waiver condemn President Joseph R. Biden’s endorsements in light of his failure to follow through with significant international or domestic action. The pharmaceutical sector argues that a waiver will not increase vaccine production because there are limited raw materials to make vaccines. The creation of vaccines, however, depends on numerous materials and technologies, which themselves may be artificially limited in the market because of patent protections.

Opponents of the patent waivers also claim that developing countries do not have the infrastructure to manufacture complex COVID-19 vaccines. And, they argue that waiving patent rights will discourage private investors from funding future vaccines. This position, however, downplays the existing and growing manufacturing infrastructure in developing countries such as India. In addition, discouraging financial actors from investing in vaccine development will not radically gut vaccine innovation because U.S. taxpayers—not private investors—funded the bulk of COVID-19 vaccine development.

Some researchers allege that vaccine hesitancy—partially caused by concerns about vaccine side effects and distrust of government and Western products—is another factor limiting vaccination rates in poorer countries. Other researchers, however, found that citizens in low- and middle-income countries, such as Nepal and Rwanda, exhibited less vaccine hesitancy than did U.S. citizens. Moreover, inequitable distribution of vaccines reinforces distrust of the wealthy pharmaceutical companies and nations distributing the vaccines, and prolonging non-vaccination causes complacency among the unvaccinated who have avoided infection so far. Waiving vaccine patents would increase vaccine production in poorer countries and likely decrease hesitancy because countries would no longer need to depend on distrusted pharmaceutical companies and wealthy nations to vaccinate their citizens.

WHO’s global vaccination program, which depends heavily on pharmaceutical companies’ vaccine donations, demonstrates the folly of relying on the private sector. The program has severely failed to reach its goal of vaccinating 20 percent of each country’s population. With the rise of the Omicron variant and pharmaceutical companies continuing to profit from the pandemic, it is time for the Biden Administration to exert international and domestic pressure and to fulfill its endorsement of a COVID-19 vaccine patent waiver.

“Our failure to put vaccines into the arms of people in the developing world is now coming back to haunt us,” explains WHO Ambassador Gordon Brown in reference to the Omicron variant. “We were forewarned—and yet here we are.”

The United States has the capacity to store more than 3,300 billion metric tons of carbon dioxide beneath its surface, according to a past study—sufficient space to sequester around 500 years’ worth of carbon dioxide emissions out of the atmosphere. This U.S. potential for carbon capture could be the difference between sustainable living or environmental catastrophe, based on the International Energy Agency’s suggestion that limiting global warming to 1.5 degrees Celsius will require carbon capture, utilization, and storage.

But obstacles stand in the way of increasing carbon storage and sequestration on U.S. federal lands. In a recent article, University of Wyoming College of Law professor Tara Righetti and three coauthors propose several policy solutions that address these challenges, and may increase the use of U.S. carbon storage capacity.

Righetti and her coauthors explain that a carbon storage project needs legal rights to use what is known as subsurface pore space—a term that generally refers to the underground space where carbon can be stored.

Yet no definition of pore space exists in statutes or regulations that govern federal land management, making it difficult to determine which entities may use pore space and how. This regulatory gap exemplifies the broader lack of statutory clarity facing carbon storage projects on federal lands. It also suggests a serious need for future clarification as to what “processes, rules, and regulations” guide pore space use on federal lands.

Moreover, it is often unclear how a project would obtain the rights to pore space in the first place. Righetti and her coauthors suggest that in certain contexts, such as on national forest lands, the U.S. Bureau of Land Management (BLM)—the agency charged with managing mineral rights on federal lands—may not even have the authority to grant leases for pore space use.

BLM is also tasked with developing resource management plans that balance mineral development with other competing interests, such as timber harvesting and energy development. Carbon sequestration projects, however, are not currently evaluated as a “potential use of public lands” in current resource plans.

Going forward, Righetti and her coauthors argue that future resource plans should be modified to include carbon storage in resource management plans for public lands. Directing agencies to incorporate carbon storage into resource planning, management goals, and management decisions will prompt agency actions, such as beginning environmental reviews, that are necessary to streamline sequestration project approvals.

Including carbon storage capacity in resource management plans will also help avoid some of the public concerns associated with carbon storage projects, such as local environmental impacts. Furthermore, incorporating storage capacity into resource management plans can help “harmonize requirements” between agencies with overlapping authority.

More broadly, Righetti and her coauthors recommend the passage of federal legislation to determine which agencies should hold the authority to govern pore space and to give agencies the authority to allow third party use of pore space.

Next, Righetti and her coauthors identify environmental impact reviews required under the National Environmental Policy Act (NEPA) as potentially “time consuming and costly” obstacles to carbon storage projects. These reviews often require multiple layers of analysis and different agency approvals.

To relieve the burden of NEPA review on carbon storage projects, Righetti and her coauthors advocate excluding certain activities related to carbon capture, utilization, and storage projects. They submit that exclusions should only be for small elements of projects, such as granting pore space rights to a developer when there are no accompanying “surface operations.”

They also oppose any exclusions for larger-scale elements of carbon storage projects such as pipeline construction. This balanced approach, the authors argue, would improve the efficiency of the review process without undermining the fundamental goals of NEPA.

Finally, Righetti and her coauthors consider the issues that arise when one person or agency owns land surface rights, but another entity owns the mineral or subsurface rights. This kind of split ownership complicates carbon storage projects by, for example, requiring a project developer to obtain a disclaimer of rights from whichever federal agency oversees the land.

In such situations, judicial rulings would help solve ownership disputes by determining which entity owns pore space. Since current statutes are unclear as to whether federal mineral rights include pore space, Righetti and her coauthors suggest that a court decision finding that the United States does not retain rights to pore space would ameliorate the problem of split land rights. Judicial rulings could also exempt carbon storage projects from comprehensive NEPA review if they do not overlap with federal surface lands.

Carbon capture—in coordination with a range of other solutions—is likely a necessary component of any meaningful attempt to solve the crisis of climate change. The United States has ample capacity for carbon storage on government-owned land, and making some simple regulatory changes could unlock new pathways toward a greener future, conclude Righetti and her coauthors.

Court cases can frequently confuse non-lawyers. Rarely, however, do judges openly admit to being confused. Yet, during oral arguments held earlier this month, the complexity of the Medicare system led U.S. Supreme Court Justice Stephen Breyer, who used to teach courses on regulation at Harvard Law School, to acknowledge that “the chances I understand it correctly are near zero.”

Breyer offered his comment in one of a pair of cases that raise highly technical issues about the law governing Medicare reimbursement to hospitals. These cases also raise important issues about how authority for making these determinations should be divided between courts and administrative agencies.

The first case, Becerra v. Empire Health Foundation, concerns a formula for extra Medicare payments to hospitals that provide care for large percentages of low-income patients. The formula for payments to these “disproportionate share hospitals” (DSHs) calculates days of treatment for patients eligible for Medicaid but not entitled to Medicare. Courts and the U.S. Department of Health and Human Services (HHS) had read “eligible” and “entitled” to have different meanings, but in 2005 HHS changed its reading of the terms and, consequently, its reimbursement formula for DSHs—prompting the litigation that now has reached the Supreme Court.

The second case, American Hospital Association (AHA) v. Becerra, involves a question about the law regulating Medicare reimbursement of drug costs for 340B hospitals—another category of hospitals that serve especially large proportions of low-income and uninsured patients. In 2018, HHS cut the compensation rate for these hospitals by 28.5 percent based on a change in its reading of the law respecting the statutory reimbursement formula for drug costs.

Both cases raise high stakes. HHS’s budget cuts in AHA reduced payments to 340B hospitals by an estimated $1.6 billion per year. And HHS’s interpretation in Empire reduces DSH hospitals’ payments by several billion dollars.

Money doubtlessly motivated the changes in HHS interpretations and the challenges to those changes, but the more significant reason these cases are important is because they may lead to revision of the rules about when and how much courts allow agencies to decide what statutes mean. The Supreme Court set out those rules 37 years in Chevron. v. Natural Resources Defense Council. Chevron says that courts should use “traditional tools of statutory construction” to decide what a law means, but if those tools yield no clear meaning, agencies should be presumed to have discretion to take actions consistent with a reasonable reading of the law.

Some courts have read Chevron as telling judges to defer broadly to agency interpretations of law. Others read Chevron as giving leeway to agencies only so far as it is reasonable to conclude that a law gave the agency discretion on a particular matter.

Critics of Chevron, such as Justice Neil Gorsuch, say that it allows agencies to supplant courts, which are supposed to interpret the laws. Critics also argue that Chevron encourages Congress to grant agencies broad discretionary authority that should remain with lawmakers.

Proponents of Chevron often say what Justice Breyer said in the Empire oral argument: even judges cannot always find the meaning of a statute to be clear. It is reasonable, Chevron’s proponents say, to let agencies make technical decisions, even if that looks like interpretation.

Recently, some of Chevron’s advocates have accused critics of wanting to reduce the size of government by limiting the authority of administrative agencies. But advocates and critics of the administrative state take positions on both sides of arguments about Chevron.

The Medicare cases currently before the Supreme Court—Empire and AHA—raise potential issues of Chevron deference. The U.S. Court of Appeals for the D.C. Circuit endorsed the HHS decision challenged in AHA, in large measure based on its conclusion that the decision merited Chevron deference. In Empire, however, the U.S. Court of Appeals for the Ninth Circuit decided that HHS’s decision was not entitled to deference. In the oral arguments for both AHA and Empire, the Supreme Court justices’ questioning focused on Chevron, and the Court could end up reshaping Chevron doctrine with its decisions in these two cases.

But these cases raise complicated legal issues. In commenting on the Empire case, Justice Breyer added that “these people are exhausted. Just like me, after reading this case.”

Despite the heat generated by the debate over Chevron deference, it is not clear exactly what form changed rules about agency deference would take. Nor is it even clear that changing the rules about deference will alter significantly the balance between courts and agencies in deciding the issues at stake in Empire and AHA. Scholars who have investigated Chevron’s importance have reached different conclusions on what difference the Chevron rule has made.

Like many old customs, how much Chevron mattered may not be known until it is gone. By that point, many more people may be exhausted along with Justice Breyer.

Despite 37.5 million adults in the United States reporting hearing loss, only one in five adults who would benefit from a hearing aid use one. If the U.S. Food and Drug Administration (FDA) has its way, this may change in the near future.

FDA recently proposed a new rule to make hearing aids more accessible. This rule would make it possible for consumers to purchase hearing aids over the counter at a local store or online without a prior medical exam or special fitting. An over-the-counter hearing aid is likely to cost a few hundred dollars. In comparison, a doctor-prescribed hearing aid can range in price from $1,000 to over $6,000 for a single device—and “most insurance providers do not cover the cost.”

FDA’s proposed rule has been anticipated since the U.S. Congress passed a law in 2017 that authorized over-the-counter hearing aids, intended for adults over the age of 18 who have mild to moderate hearing loss. For those with severe hearing loss, FDA still recommends prescription devices.

Although personal sound amplification products (PSAPs) are now available over the counter, they are not regulated as medical devices by FDA, nor are they intended to aid or compensate for hearing loss. PSAPs solely help to amplify sounds in the environment. They can be used for hobbies, such as bird watching or hunting, but they do not have the ability to adjust for loss of hearing at different pitches.

Hearing difficulties are complex and finding the right hearing aid requires more than just amplifying sound, experts say.

Several barriers currently prevent individuals from accessing hearing aids, even beyond the high cost. The stigma of wearing a hearing aid—often associated with old age, or a perceived disability—and the difficulty of accessing an audiologist are two significant obstacles. Because of these hurdles, many people wait an average of seven years after hearing loss starts to even seek access to a hearing aid.

The availability of over-the-counter hearing aids would help to overcome these barriers. FDA stated that the new rule aims to spark innovation and increase competition by lowering barriers for new companies to enter the market. An influx of products into the market may decrease prices by lowering out-of-pocket costs, currently tied to the lack of insurance coverage.

Furthermore, new hearing aids may allow consumers to adjust the fit by themselves, whereas traditional prescription devices can only be adjusted by a professional audiologist.

Companies such as Bose and Lexie are already developing potential over-the-counter devices with such capabilities. These devices would make it possible for consumers to adjust volume and specific frequencies via an app—functions that PSAPs do not have. In addition, Apple announced that it is conducting studies to make its AirPods into hearing aids.

These companies’ innovations have the potential to diminish the stigma people with visible hearing aids face, and produce products that are affordable than traditional hearing aids.

Beyond cost and stigma, access to an audiologist can be a common barrier to greater hearing aid use. Audiologists tend to be located in cities, while many elderly people live elsewhere. This makes it difficult to access an audiologist, especially for the multiple visits necessary to fit a hearing aid properly.

In contrast, under the rule proposed by FDA, over-the-counter hearing aids would be made available at pharmacies, online, and local corner stores. In the United States, 90 percent of Americans live within five miles of a pharmacy.

If the final rule is published, many patients would still be able to seek assistance from pharmacists when purchasing an over-the-counter hearing aid. A pharmacist would also have the ability to refer patients to audiologists and physicians if further treatment is necessary.

But the novelty of over-the-counter hearing aids does raise a few concerns, some experts say. Audiologists argue that if an over-the-counter hearing aid is a person’s first experience with a hearing aid and it does not fit or work properly, the potential negative experience may dissuade the person from wearing a hearing aid, or even seeing a trained audiologist.

In addition, hearing loss may be caused by an underlying condition such as an undiagnosed disease or health disorder. If patients buy hearing aids without undergoing medical exams, they may be putting their health at risk and an underlying condition may remain undiagnosed.

Although over-the-counter hearing aids may have their drawbacks, an untreated hearing impairment can lead to severe consequences. Hearing impairment is associated with mental health conditions such as depression, anxiety, and dementia. It also can be connected to physical consequences, such as reduced mobility and falls. One study found that even a mild degree of hearing loss could at least triple an adult’s chance of falling.

Without question, hearing loss significantly affects the quality of life of tens of millions of adults in the United States. Although finalizing the proposed rule for over-the-counter hearing aids may take months, it is promising that this need is finally being recognized.

The public may submit comments on FDA’s proposed rule until January 18, 2022.

Every day, government offices undertake a vast range of administrative tasks: granting licenses, issuing payments, adjudicating claims, and enforcing rules.

Historically, this work has been executed by government workers. But in an increasingly digital world, more government work is likely to be automated. Members of the public may even come to expect a digital automated state as they grow increasingly accustomed to conducting their private transactions online and having their complaints with online retailers resolved automatically through interactions with chatbots.

Already it is possible to go to government websites to renew drivers licenses, pay parking tickets, and make park campground reservations. Further changes are on the horizon, as government agencies at every level start to explore ways that artificial intelligence can handle tasks traditionally driven by humans. Instead of having human officials make decisions, such as whether an individual qualifies for disability benefits or unemployment insurance, agencies could eventually rely on automated systems.

Automation’s obvious potential lies with efficiency, speed, and accuracy. But automation can also bring forth a government with more consistency and fairness too. Algorithms, after all, pose less risk of corruption than do human officials.

And even though some early algorithmic tools have been shown to exhibit unjust biases (usually because bias is baked into the human-created data on which they rely), these algorithms can be mathematically adjusted to reduce undesired, unjust outcomes—a much more achievable task than eliminating humans’ implicit biases.

Because algorithms do exactly what they are told, an automated state could even be seen as the culmination of the ideals of fair, apolitical public administration that emerged in the Progressive Era at the beginning of the last century.

Yet, even with a responsible, uncorrupted, unbiased automated state, a key ingredient of good governance would turn out to be missing: the human touch. A future of a digital government seems, at first blush, quite sterile and devoid of empathy.

Empathic engagement with the public, after all, is an essential ingredient of any responsive, responsible governmental authority. Ensuring that members of the public have opportunities to engage with human officials, share their voices, and have their views acknowledged will remain a vital function of government—perhaps especially so in an increasingly digitized world.

In that world, government will continue to make highly consequential decisions that affect individuals. At these times, empathy will demand that administrative agencies provide opportunities for human interaction, listening, and validation of concerns.

The public’s need for empathy, though, does not mean that government should avoid automation. If planned well, the transition to an automated state could, surprisingly, make interacting with government more humane, not less.

Government should seek to ensure that, even as routine tasks become increasingly automated, civil servants work deliberately to “bring the personal, creative, and compassionate touch,” as technologist Kai-Fu Lee puts it in his book AI Superpowers.

Making government more empathic might even be easier to accomplish in an automated state. By freeing up administrators, clerks, and auditors from drudgery, and by reducing backlogs of files that need processing, government employees will have more time to offer genuine engagement with those individuals affected by their agency’s decisions.

The current human-driven bureaucracy, after all, is often far from sufficiently attentive and empathic to many members of the public. Although in the future existing government jobs could be automated, the ability of the state to meet the public’s need for empathy could be enhanced if new responsibilities could be conceived and created for civil servants.

Think of these new jobs not just as “essential workers”—to use the vernacular of our COVID time—but as “empathy workers.”

To ensure that government provides human empathy in an automated state, we will need to create processes and laws to reinforce the maintenance of human contact.

Today, a “right to a human decision” seems a rallying cry for those who wish to resist the spread of artificial intelligence. But if automated decisions turn out increasingly to be more accurate and less biased than human ones, a right to a decision by humans would only deny the public the desirable improvements in governmental performance that digital algorithms can deliver. And everyone knows anyway that not all human decisions are empathic ones.

Instead of a right to a human decision, the challenge should be to define a right to human empathy. This right would acknowledge that people deserve an opportunity to be listened to in human-to-human interaction when confronting life-altering decisions.

If public administrators themselves do not assume the mantle of carrying out this right on their own, then courts in the future may need to determine when and how agencies must provide supplemental engagement and empathy to individuals subjected to automated processes.

The prospect of automating a vast swath of governmental decisions, then, promises more than just a path toward more efficient delivery of government services. It can provide, at the same time, an important opportunity to lead toward a more empathic government.

To reinvigorate the human element in governing, officials who today might gravitate toward the creation of digital apps also need to think about ways to create what Sherry Turkle calls “empathy apps.” They must never lose sight of the need to find ways to take a genuine interest in listening and responding to what members of the public have to say.

How big is too big?

This question has plagued health care regulators for decades. Over the past twenty years, the U.S. health care system has seen rapid consolidation in hospital, physician, and insurance markets. With mergers and acquisitions expected to increase, it may be time to reimagine antitrust in the health care context.

Since 2010, more than a thousand U.S. hospital mergers have been executed, causing the vast majority of hospital markets to become highly concentrated. In some cities, such as Boston and Pittsburgh, only one or two hospital systems dominate the entire market. At the same time, hospitals have also increasingly acquired physician practices, with over a third of all physicians now employed by hospitals. In 2018, the percentage of physicians employed by another entity surpassed the percentage of physicians who own their own practice.

These consolidations can have a sizable impact on patients. Although some proponents argue that hospital acquisitions can reduce costs and improve care coordination, many studies have shown that hospital and physician consolidations have led to higher prices, increased insurance premiums, and lower quality of care. As health care systems develop larger market shares, they can demand higher rates when negotiating with insurers.

In recent years, the Federal Trade Commission (FTC) has attempted to rein in the number and impact of hospital-physician mergers. Between 2000 and 2018, almost half of all FTC merger enforcement actions were in the health care sector.

Some experts, however, argue that current federal enforcement tools are inadequate to address rampant consolidation. For example, the majority of physician practice mergers are not reported to the FTC because they fall below the $92 million reporting threshold. Moreover, current antitrust enforcement guidelines make it difficult to regulate cross-market mergers—an increasingly common practice involving the merger of health care entities that do not compete in the same geographic or product markets.

Consolidation among providers may accelerate following the financial distress caused by the pandemic. With the Biden Administration poised to heighten enforcement efforts, mergers and acquisitions in the health care industry could be set for a shake-up.

In this week’s Saturday Seminar, experts discuss how different antitrust approaches can increase competition in health care markets.

• In a report with the Hamilton Project, Martin Gaynor of Carnegie Mellon University’s Heinz College of Information Systems and Public Policy describes three policies to improve competition in health care markets. First, Gaynor recommends eliminating regulations that unintentionally encourage consolidation. For example, Medicare currently pays more for the same physician service if it is owned by a hospital. Second, Gaynor calls for increased funding for antitrust enforcement and revised guidelines that shield small transactions from regulatory oversight. Finally, Gaynor advocates the creation of a new federal agency that can both monitor prices, costs, and quality in health care markets and notify the FTC when a potential antitrust violation occurs.
• In an article published in the Saint Louis University Journal of Health Law & Policy, Jaime S. King of New Zealand’s University of Auckland and Erin C. Fuse Brown of Georgia State University College of Law argue that modern health care mergers complicate traditional antitrust analysis because they often involve horizontal, vertical, and cross-market provider integrations. Furthermore, they warn that cross-market mergers could lead to increased market power and higher health care prices. King and Brown recommend that antitrust regulators and policy analysts begin analyzing the legal and economic implications of cross-market acquisitions in light of their anticompetitive potential.
• State antitrust enforcement can play an important role in preventing consolidation in the health care industry, argue Alexandra D. Montague and Katherine L. Gudiksen of The Source on Healthcare Price and Competition and Jamie S. King in an issue brief for the Milbank Memorial Fund. By comparing merger review practices in all 50 states, Montague, Gudiksen, and King identify key elements for a successful antitrust framework. They argue that notice requirements, pre-transaction review, the ability to conditionally approve and block transactions, and oversight of conditionally-approved transactions can help state legislatures address more nuanced forms of consolidation.
• In an article in UCLA Law Review, Allison Hoffman of the University of Pennsylvania Law School challenges the assumption underlying modern antitrust analysis that competition will improve health care options. Hoffman explains that the unique structure of health care—in which insurers and employers act as intermediaries between the patient and the provider—makes it difficult to identify the “hypothetical end consumer” in antitrust analysis. Hoffman argues that the repeated “technocratic tinkering” that seeks to fix health care antitrust analysis has created an expensive “market bureaucracy,” which diverts resources from alternative policies that could actually address systemic problems.
• Nonprofit hospitals should be granted an exemption from antitrust laws, attorney Chad Nelson argues in an article in Health Matrix: Journal of Law-Medicine at Case Western Reserve University School of Law. Nelson posits that the tenets of the McCarran-Ferguson Act, which provide a limited antitrust exception to health insurance companies, would be better applied to nonprofit hospitals. Analogizing nonprofit hospitals to public utility companies, Nelson argues that nonprofit hospitals are already heavily regulated to protect patients from deceptive business practices. This existing regulatory regime addresses the consumer-protection policy objectives that typically underlie antitrust regulations. Nelson explains that an antitrust exception would grant nonprofit hospitals greater freedom to make decisions and ease the budgetary issues that these institutions face.
• In an article published in the Loyola University Chicago Law Journal, Spencer Weber Waller of Loyola University Chicago School of Law argues that the legal system should either return to a traditional health care antitrust approach or create a more “sector-specific, health care antitrust policy with a deliberate blend of regulation and competition.” Waller suggests that the latter approach would entail adopting legislation that relies on industry-specific guidelines and deliberately subordinates competition. Doing so, says Waller, would cement “health law antitrust” as a defined field and diminish reliance on U.S. Supreme Court precedents that apply to other industries.

IN THE NEWS

• Based on evidence that transmission of the coronavirus Omicron variant occurs “early in the course of illness,” the Centers for Disease Control and Prevention (CDC) has shortened the recommended isolation and quarantine periods for people with COVID-19. The CDC recommends that people with COVID-19 who are unvaccinated or received their second vaccine dose more than six months ago and have not received a booster should quarantine for five days and wear a mask for an additional five days. People with COVID-19 who have received the booster do not need to quarantine but should wear a mask for 10 days, according to the CDC. Given the recent spike in COVID-19 cases, CDC Director Rochelle Walensky urges the public to “get vaccinated, get boosted, wear a mask” and “take a test before you gather.”
• The U.S. Environmental Protection Agency (EPA) issued a final rule revising its greenhouse gas emissions standards for new vehicles made from 2023 to 2026. For 2025 and 2026 in particular, the rule sets “the most stringent standards ever set for the light-duty vehicle sector,” which includes passenger cars and light trucks. First proposed in response to President Joseph R. Biden’s executive order directing federal agencies to review past regulations, the new rule partially replaces emissions standards issued under the Trump Administration.
• The U.S. Food and Drug Administration (FDA) and the CDC approved Pfizer’s COVID-19 vaccine booster for 12 to 15 year olds, making all individuals over the age of 12 eligible for a booster after completing an initial two-shot series. The agencies also reduced the time between the initial shots and the booster from six months to five months, stressing the need to vaccinate the population fully against the Omicron variant.
• The United States Department of Justice issued a final rule that implements firearm storage requirements from the Gun Control Act. The new rule requires applicants for federal firearm dealer licenses to certify that they will have secure gun storage or safety devices, compatible with the firearms offered for sale, available when selling firearms to nonlicensed individuals. The rule also requires applicants for manufacturer or importer licenses to complete the certification if they plan to sell firearms to nonlicensees. The Bureau of Alcohol, Tobacco, Firearms and Explosives published a guide to help federal firearms licensees comply with the firearm laws and regulations.
• The Internal Revenue Service (IRS) and the U.S. Department of the Treasury issued new regulations explaining the potential tax consequences of moving away from interbank offered rates. An interbank offered rate is an interest rate used as a baseline in financial contracts, and the most widely used rate—the London Interbank Offered Rate, or LIBOR—ceased to exist at the end of 2021, forcing national regulators to coordinate with banks and transition to new base rates. As parties to complex contracts make this transition, the IRS and Treasury Department regulations offer guidance on how switching base rates could cause “realization of income, deduction, loss, or gain for federal tax income purposes.”
• The Office of Personnel Management issued a proposed rule rescinding portions of a November 2020 rule finalized under the Trump Administration. The 2020 rule streamlined the process for firing federal employees and required agencies to notify supervisors in their agencies at the three month and one month point prior to the expiration of every employees’ probationary period. Following President Biden’s January 2021 executive order, the Office of Personnel Management aims to rescind this rule, calling it “inconsistent with the current policy of the United States to protect, empower and rebuild the career federal workforce as well as its current policy to encourage employee organizing and collective bargaining.”
• The United Kingdom’s National Security and Investment Act (NSI) took effect on January 4. NSI allows the UK government to scrutinize and “intervene in certain acquisitions that could harm the UK’s national security.” Under NSI, acquirers of an entity with sufficient connection to the UK must provide notice to the government and receive approval prior to completing the acquisition. Business Secretary Kwasi Kwarteng described the process as “simple and quick, giving investors and firms the certainty they need to do business.” The UK Department for Business, Energy & Industrial Strategy published guidance to help investors and companies understand their new obligations under NIS.
• The New York Department of Labor issued a proposed rule outlining how the workplace safety committees created by the New York Health and Essential Rights (HERO) Act will be established, composed, and governed. State legislators designed the HERO Act to “protect employees against exposure and disease during a future airborne infectious disease outbreak.” The Act empowers employees to form workplace safety committees that can provide employers with input on safety and health issues.
• California’s State Water Resources Control Board adopted new regulations discouraging residents from overusing water in the middle of the state’s ongoing drought. The regulations include several prohibitions on using potable water, such as for washing sidewalks or overwatering lawns, except “to address an immediate health and safety need.” The new rules also shield property owners from homeowners’ associations seeking to enforce landscaping standards during the declared drought emergency. The Board’s chief deputy director, Eric Oppenheimer, reportedly described these regulations as “commonsense measures to save water as California faces more extreme cycles of wet and dry conditions driven by climate change.”

WHAT WE’RE READING

• In a recent Brookings Institution report, biophysicist Kevin W. Doxzen and professors Landry Signé and Diana M. Bowman of Arizona State University discussed how innovative regulation can advance precision medicine. Precision medicine uses a patient’s personal information, “such as DNA sequences, to prevent, diagnose, or treat disease.” Doxzen, Signé, and Bowman claimed precision medicine could transform treatment for late-stage cancer and rare genetic diseases, but noted several barriers to equitable delivery, including inefficient regulatory processes. According to Doxzen, Signé, and Bowman, governments that aim to integrate precision medicine into their healthcare systems should consider the “seven pillars of agile governance” that provide a “blueprint for regulators seeking to respond effectively and efficiently to technological innovation worldwide.” These pillars direct regulators to anticipate innovation and its implications, focus regulation on outcomes, create space for regulatory experimentation, use data to target interventions, leverage the private sector with industry-led governance mechanisms, and work across sectors, institutions, and international borders.
• In an article published in Land, researchers Yingkai Tang and Yunfan Yang of Sichuan University and He Xu of the Central University of Finance and Economics evaluated how China’s carbon emissions trading system (CETS)—which allows businesses to buy and sell emissions credits with the goal of reducing overall emissions—has affected the transition of local land use in the country. Tang, Yang, and Xu found that the CETS reduced overall economic output in some areas while also increasing energy efficiency, which the team took to indicate that former output was driven by “high-pollution industries” that were being pushed out by the CETS. At the same time, Tang, Yang, and Xu could not establish that the CETS caused “high quality economic development” by fully replacing previous growth from polluting sectors. They concluded that the CETS has effectively reduced carbon emissions across China even if emissions trading alone has not led to innovative growth.
• In a recent masters thesis, Kaja Koppang of Finland’s Aalto University showed how a European Union environmental information regulation (EIR) creating annual disclosure requirements of nonfinancial information affects small and medium businesses not subject to the regulation. Koppang explained that even though the EIR directly applies only to businesses with more than 500 employees, these larger businesses need to obtain non-financial information from smaller entities with which they do business in order to comply with the regulation’s requirements. Koppang documented how the EIR creates this “ripple effect” from Norwegian banks to smaller businesses in the supply chain, passing off some of the costs of compliance onto these smaller—supposedly excluded—businesses. If ignored, this expansion of the regulation’s effects threatens to squeeze smaller businesses out of any sustainable transition to a green economy, Koppang warned.

FLASHBACK FRIDAY

• In an essay in The Regulatory Review, Jack Lienke and Richard L. Revesz of the Institute for Policy Integrity at New York University School of Law argued that EPA’s attempt at replacing the Clean Power Plan represented a drastic about-face. Lienke and Revesz observed that the Trump Administration had played up the Obama-era regulations as “draconian” and a huge cost to the U.S. energy sector, but EPA’s final proposal justified a new plan by stating that no changes to emissions or health outcomes would have been achieved by the Clean Power Plan. Lienke and Revesz criticized EPA for attempting to obscure the effects of jettisoning the Clean Power Plan and engaging in less-than-clear regulatory analysis.

In a recent appearance before the U.S. Senate, Federal Bureau of Investigation Director Christopher Wray offered a warning: “The greatest terrorist threat we face here in the United States is from what are, in effect, lone actors.” Wray explained that terrorist organizations have successfully used social media to radicalize such individuals, increasing the likelihood that they will commit terrorist acts.

In light of such concerns, should social media companies be liable for terrorist content on their platforms? In a recent article, Michal Lavi, a postdoctoral fellow in Israel, argues that the answer is “yes.”

Some plaintiffs in the United States have filed civil lawsuits against social media companies under a federal antiterrorism law that prohibits supporting terrorists, Lavi observes. Families of victims have argued that companies cooperated with terrorists in posting, displaying, or hosting propaganda which then led to American deaths.

These lawsuits, however, face an uphill battle. Plaintiffs must overcome hurdles in proving causation and demonstrating that they have standing to have their claim considered by a federal court. In some cases, courts have refused to accept a threat or fear of terroristic harm as an “actual or imminent” injury that justifies standing.

In addition, no laws specifically require platforms to prevent terrorist content, and the First Amendment establishes strong protections for free speech—a factor which leads lawmakers to favor less content moderation online.

Plaintiffs must also convince courts to find social media platforms liable despite the immunity granted to these companies by Section 230 of the Communications Decency Act. In passing Section 230, the U.S. Congress prioritized free speech and innovation, opting to absolve content providers of liability for speech that occurs on their platforms. Courts may find liability when a company creates or develops content, but they have more often dismissed cases by interpreting Section 230 broadly to protect platforms.

Pushing back against Section 230’s sweeping protections, Lavi argues that giving immunity to platforms only enables terrorist recruitment and the incitement of violence. Lavi urges lawmakers to amend Section 230 to establish liability for platforms that host terrorist content.

Social media companies already regulate speech and moderate content according to their own policies and terms of service, Lavi explains. But according to Lavi, these companies—including Twitter, Facebook, and YouTube—fail to moderate terrorist content adequately. They have enforced their own policies inconsistently when removing terrorist hashtags, degrading statements, graphic photos, and violent videos. Lavi notes that attempts to detect and remove terrorist content using technology have also fallen short.

Any attempt to impose liability on platforms for terrorist content that incites violence must balance public safety with free speech, Lavi acknowledges. If platforms ramp up efforts to remove terrorist content, they may remove legitimate speech and make users suffer from collateral censorship. Increasing content moderation could also have a chilling effect on user autonomy, civic participation, and the free exchange of ideas, Lavi concedes.

Striking the right balance between public safety and free speech, Lavi explains, entails imposing liability with specific limitations. As a limit, Lavi suggests that platforms should only be liable when they know about terrorist speech and terrorists’ accounts but fail to act.

As a starting point, Lavi describes terrorist content as posts that “seek to cooperate, legitimize, recruit, coordinate, or indoctrinate on behalf of groups listed on the State Department’s list of designated terrorist organization.” Lavi predicts that by removing content that fits this narrow definition, companies could likely pass the strict scrutiny test that courts apply to prevent undue limits on the constitutional right to free speech.

Platforms should also be responsible for their algorithms and any content personalization that leads susceptible users to terrorist content, Lavi emphasizes. Social media companies apply algorithms to determine the recommendations, content, and advertisements that every user sees.

Algorithmic targeting can incite and reinforce violent extremism in many ways, Lavi explains.

Even if users have not searched for inciting content, algorithmic targeting may invite some users to engage with violent ideas and then recommend increasingly extreme content and connections. Algorithms may also radicalize users by siloing them in echo chambers that limit a free marketplace of ideas, reinforce prior dispositions toward radical beliefs, and strengthen extremist messages.

“Algorithms are also never truly neutral,” Lavi argues. She contends that digital intermediaries should not escape liability merely because algorithms make recommendations. Humans still intervene when they program, instruct, and update the algorithms that later make recommendations and manipulate users.

Policymakers could also implement a “safety by design” requirement for new technologies, subjecting platforms to a basic duty of care to keep users safe. Imposing a duty of care, as Lavi describes, would require engineers to design algorithms so as to avoid recommending content that incites users to terrorist activity.

Once a platform company implements an algorithm, it may still recommend terrorist content based on programming choices or unexpected machine-learning interactions. Lavi recommends that regulators require algorithmic impact assessments to catch algorithms that make harmful recommendations, providing companies with an opportunity to correct them.

Although the U.S. Department of Homeland Security seeks to combat disinformation, conspiracy theories, and false narratives on social media, government resources may not be enough. Recognizing social media platforms’ ability to either facilitate or counteract the spread of terrorist content, Lavi concludes that imposing liability on platforms creates a much-needed incentive to stop terrorist propaganda before it can circulate widely.

A professor at Emory University was fired and charged with theft of grant funds in 2019 after he was allegedly paid $500,000 of unreported funding by Chinese research institutions to conduct years of research at Chinese labs without his employer’s knowledge.

This case is just one example of a growing trend in allegations of U.S. researchers receiving undisclosed support from foreign entities in exchange for access to scientific knowledge or influence within the United States.

Yet the major U.S. federal agencies that fund scientific research projects at educational institutions do not currently have sufficient safeguards in place to prevent foreign influence over their research, according to congressional testimony delivered in October by a senior official at the U.S. Government Accountability Office (GAO).

Last year, GAO released a report based on a review of the five agencies that account for the vast majority of all federal research and development expenditures at U.S. universities. GAO found that two of these agencies—the U.S. Department of Defense and the U.S. Department of Energy—lacked any agency-wide policies requiring researchers seeking funding to disclose conflicts of interest.

Three other agencies—the National Science Foundation (NSF), the National Institutes of Health (NIH), and the National Aeronautics and Space Administration (NASA)—did have conflict of interest policies, but none of these policies specifically addressed foreign financial interests or specified whether such interests are required to be reported.

GAO commissioned this report in the wake of recent concerns about foreign governments’ talent recruitment programs. It addressed worries that unapproved diversions of scientific research materials to foreign governments may threaten U.S. leadership in emerging science and technology, weaken innovation, threaten economic competitiveness, and violate the integrity of the U.S. research enterprise.

In a letter sent to over 10,000 U.S. universities in 2018, Francis Collins, the director of the NIH,  claimed that foreign governments have mounted “systemic programs” to influence researchers at the NIH and other peer institutions. In particular, Collins noted his unease over efforts to divert intellectual property in biomedical research to other countries, attempts by foreign entities to influence NIH funding decisions, and the failures of many U.S. researchers to disclose when they received substantial resources from foreign organizations or governments.

In response to these concerns, the five agencies reviewed in the GAO report have taken preliminary steps to clarify their existing policies concerning foreign conflicts of interest and disclosure requirements. These measures include establishing working groups on identifying risks of foreign influence and conducting outreach to universities about these concerns, among other actions. As one example, the Defense Department established a task force to review regulations, procedures, and policies concerning the conduct of research. The agency reports to be working on identifying Chinese government-affiliated foreign talent recruitment programs for particular scrutiny.

These measures have produced results at some agencies to date, concludes GAO. For example, as of September 2020, the NIH had identified more than 200 scientists in the United States who were behaving in ways that threatened research security and integrity.

Based on interviews with officials from the five leading federal research agencies, university representatives and administrators, and researchers, GAO auditors identified five opportunities to improve the way the federal government addresses foreign influence in federally funded research.

For example, GAO recommended that agencies receiving federal funding for research harmonize their grant proposal requirements to ensure that all parties involved are aware of the risks of foreign influence. GAO also noted that these measures could help reduce the burden on universities, which often must ensure their researchers meet grant requirements for multiple agencies.

GAO also recommended that federal research agencies better communicate to universities the specific risks that they face concerning foreign influence, since many U.S. institutions do not yet have experience in trying to mitigate these risks. In addition, GAO offered guidance, based on input from university representatives, that federal agencies provide training to researchers on identifying and reporting potential foreign influences.

Agency and university officials range in their views as to whether researchers should be permitted to participate in foreign talent recruitment programs. NIH officials report that although some researchers readily disclose funding from these types of foreign sources, many fail to disclose funding from Chinese programs in particular. According to the NIH, these failures to report might be due to the fact that some contracts with foreign funding sources expressly prohibit researchers from disclosing their participation in such programs to grant-making agencies in the United States.

GAO notes, however, that the head researchers surveyed at various universities unanimously recommended that any researchers participating in these programs should at least disclose their involvement to their universities.

GAO concludes that if the five agencies noted in its report begin to fully implement its recommendations, they could improve their own abilities and enhance the capacity of U.S. universities to identify and mitigate conflicts of interest and ensure consistency in enforcement.

It makes your toaster, television, and lights possible. Without it, you could not access this essay.

It is electricity.

And people often take electricity for granted.

For most of the United States, electricity is created hundreds of miles away, carried across transmission lines running along streets and roads to be distributed into homes, offices, and hospitals. But these lines—known as “the grid”—are “increasingly at risk” from hackers, according to a recent report to Congress from the U.S. Government Accountability Office (GAO).

Although people may be more familiar with power outages caused by falling trees, low temperatures, and extreme weather, cyberattacks on the electric grid are also a threat to energy security.

In 2016, the U.S. Department of Homeland Security (DHS) found that a power outage caused by hackers affected 225,000 customers in Ukraine. In 2018, DHS reported that foreign hackers had previously infiltrated the U.S. electric grid.

Today, the electricity grid is more vulnerable to hackers than ever before, as it is increasingly complex and dependent on advanced technology. These advances in grid technology, such as remote-control systems and geographic positioning systems, allow grid operators to monitor and control the transmission of electricity remotely. They make coordinating the thousands of transmission lines easier for grid operators. But GAO notes that these improvements also make the grid more vulnerable to cyberattacks.

Grid vulnerabilities may also result from the system’s initial design. The electricity grid, created in the 1870s, was built many years before the internet. Because much of the physical infrastructure on which the grid operates today was not designed to be connected to the internet or to advanced technology systems, the grid lacks some protection from cyberattacks that inherently comes with newer, modern technology.

For example, many of the grid’s older technology systems are incapable of understanding whether commands are sent from an authorized person or a hacker. These systems often operate on out-of-date software that lacks modern security patches.

Who is responsible for protecting the U.S. electricity system? Federal policy, in the form of an Obama-era presidential directive and the National Defense Authorization Act, mandates that the U.S. Department of Energy is responsible for grid protection and the development of the nation’s energy cybersecurity strategy.

To date, the Energy Department has released three plans and an assessment related to cybersecurity. The Department acknowledges in its Multiyear Plan for Energy Sector Cybersecurity that cyber threats are increasing in both frequency and sophistication. The Department outlines that, to combat future risks, it must better prepare the energy sector by requiring utilities to analyze potential risks and consequences of cyberattacks.

In support of its national strategy plans, the Energy Department noted that it is collaborating with DHS on assessing response capabilities during cyberattacks. The Energy Department also called attention to its development of a coordinated national response strategy with the private sector. It stressed that it will continue to fund research and development for technology that bolsters grid security.

GAO, however, did not find that the Energy Department has sufficient plans for grid protection. GAO claims that the Energy Department has failed to address fully the risks of cyberattacks to the grid. According to GAO, the Energy Department has yet to consider the dangers of some newer technologies.

Some solar companies, for example, can remotely access and update their customers’ solar panel software. Hackers, in theory, could gain access to this software and send power back into the grid in unusually large amounts, which could lead to disruptions and power outages. Similar network problems can occur with electric vehicle chargers.

GAO recommends that the Energy Department “more fully address risks to the grid’s distribution systems from cyberattacks.” Even the Energy Department agrees, noting that its office of Cybersecurity, Energy Security, and Emergency Response will actively work to mitigate cybersecurity risks in the U.S. electric system and to target the most critical risks.

Furthermore, the Energy Department points to a few congressionally directed cybersecurity projects in the works. For example, the Energy Department partners with the National Rural Electric Cooperative Association, as well as the American Public Power Association, to bolster defenses against cybersecurity risks. Through these partnerships, the Energy Department assists with research and development to fund potential technical solutions.

Whether the Energy Department’s actions will provide sufficient protection to the electricity grid remains to be seen. Ultimately, GAO concludes that federal support for energy cybersecurity improvements is not likely to be prioritized effectively until the Energy Department fully assesses the vulnerabilities of the electricity grid.

Online platforms can be “double-edged swords,” generating spectacular economics while offering a forum for bad actors and bad behavior. To fix the dark side of platforms, only a combination of government regulation and pressure for companies to self-regulate has a chance to curb the extremes in social media. U.S. Supreme Court Justice Clarence Thomas has hinted at a similar position.

Although the challenges facing social media are global and require multinational solutions, we focus here mainly on the United States. We start by clarifying the problem we are trying to solve. On the one hand, social media platforms have an incentive problem. Facebook, Instagram, Google, YouTube, Twitter, and other platforms frequently accelerate the viral distribution of extreme content because it generates greater user engagement, which translates into billions of dollars in advertisements.

The more outrageous the content—for example, stories of grand conspiracies around the U.S. presidential election, the coronavirus, and COVID-19 vaccines—the greater the profit opportunity.

Yes, the social media companies have “terms of service” that allow them to delete harmful or illegal content. But there are no financial incentives for these firms to police themselves.

On the other hand, the volume of social media content—four billion videos are viewed on Facebook alone each day—makes it difficult and expensive, although not impossible, to track, curate, or edit so many postings.

We have been studying and writing about digital platforms since they first emerged in the 1990s. Our research has led us to conclude that many of the proposals being discussed in the press and the U.S. Congress are unlikely to work. Let us consider them one by one.

One option is to break up Facebook. This option would reduce Facebook’s market power, but it does not solve any of the incentive problems or conflict of interest issues identified by Frances Haugen, the former Facebook employee and whistleblower. Even if Facebook, Instagram, and WhatsApp returned to separate companies, each application would still be a huge, powerful network with no new incentives to stop bad behavior. Similar problems would persist if YouTube were detached from Google.

Another option is for the federal government to regulate social media algorithms directly. This option, which Haugen proposed, is possible—but would be difficult to execute for technical reasons. Social media and search algorithms are designed using artificial intelligence technology. The algorithms are difficult for outsiders and even the software developers themselves to pull apart and alter, let alone fully understand. Furthermore, these algorithms are based on machine learning and big data. They continually evolve as users interact with the platforms billions of times a day. Putting in a bureaucratic change-control process monitored by government officials or even expert special masters—as occurred with the Microsoft antitrust trial settlement—would likely freeze the technology and put a damper on innovation.

A third option would be for lawmakers to eliminate Section 230. This change would get rid of the 1996 law that protects online platforms from civil liabilities for content they disseminate. But Section 230 distinguishes the platforms from publishers, the latter who are fully responsible for their content. As such, the law remains fundamental to the operations of all online platforms. We want these internet businesses to continue to be as open as possible to innovation and to facilitate freedom of expression in user-generated content—without being legally liable for each of the billions of posts on their sites.

A better alternative would be to combine government regulations that alter incentives and put more pressure on social media companies to do more self-regulation. We offer three suggestions.

First, the U.S. government should require all social media platforms to abide strictly by their own “terms of service,” vesting enforcement power over these terms with the Federal Communications Commission (FCC), Federal Trade Commission (FTC), or even the Securities and Exchange Commission (SEC). These terms already give social media companies the ability to curate content or shut down accounts when they see misuse of their platforms. For example, Facebook has a set of “community standards” comprising a long list of potentially prohibited content, including posts considered to encourage violence and criminal behavior, child or sexual exploitation, hate speech, false news, and intellectual property violations.

Having terms of service is not enough, however. The federal government needs to make sure that social media firms adhere to their publicly stated terms of service and other standards. One way to force adherence would be government lawsuits or civil litigation—with fines levied against not only the companies, but also against their CEOs, other executives, and members of their boards of directors. Just as the Sarbanes-Oxley Act of 2002 made officers and directors personally liable for financial statements, new regulations could make Mark Zuckerberg and the Facebook board liable for failures to implement their terms of service.

Second, Congress, with the cooperation of the U.S. Department of Justice, should revise Section 230. We suggest that the revisions make it possible to hold the online platforms accountable for profits they earn from deliberately disseminating harmful content. The companies could then become open to civil lawsuits or specific FCC, FTC, SEC, or Justice Department actions. Since Facebook and Alphabet, Google’s parent company, collectively earned $69 billion in net income in 2020, episodic fines are unlikely to alter behavior—as we have seen with European antitrust fines against Google or the $5 billion FTC fine levied against Facebook. It should be possible, however, to force the platforms to identify profits gained from advertisements tied to these viral posts and then to have those monies clawed back as fines. Those numbers could be very large.

Finally, any additional government regulation should be administered in a way that promotes more effective self-regulation, as occurred with movie ratings and advertisements for tobacco, alcohol, pornography, terrorist recruitment, or self-preferencing in airline flight listings during the 1960s and 1970s. The technology that digital platforms use is too complex and fast-changing, and the content too vast, to rely only on government monitoring.

Historically, when new, complex technologies arise and new industries emerge, a credible threat of intrusive government regulation triggers many companies to regulate their own operations. In industries such as movies and video games, the threat of government intervention spurred coalitions of firms to establish content standards and codes of conduct—including content rating systems—which have worked reasonably well. This coalition approach could work with social media platforms.

Ultimately, accountable self-regulation is good for business: Social media platforms need to take more responsibility for their impact on the world, lest they run the risk of continuing to damage essential common resources for information and commerce—the internet itself, and user trust in digital content.