This week, the United States Supreme Court (SCOTUS) will hear argument over a thorny issue of finality when the determination imposes a draconian choice. The Department of Labor (DOL) took center stage in the regulatory practice last week with the publication of two long anticipated final rules: exposure limitations on one of the most common elements on earth and new disclosure requirements for employers for attempting to persuade employees on the subject of unionization.
SCOTUS on WOTUS Jurisdiction & Finality: SCOTUS will hear argument in United States Army Corps of Engineers v. Hawkes Co., Inc. (No. 15-290) this coming Wednesday. Hawkes as whether a United States Army Corps of Engineers’ determination that the subject property contains “waters of the United States” (WOTUS) protected by the Clean Water Act (CWA) constitutes a “final agency action for which there is no other adequate remedy in a court,” and is therefore subject to judicial review under the Administrative Procedure Act (APA). Even the respondent suggested that SCOTUS grant review, albeit of a different formulation of the question, because of an intercircuit conflict over the APA finality issue. The United States Court of Appeals for the Eighth Circuit decided that the Engineers’ determination of jurisdiction was a final agency action, creating what many consider an intercircuit conflict. SCOTUS has previously held in Sackett v. EPA that landowners could challenge an EPA “compliance order” and the underlying jurisdictional determination. Hawkes now brings the base question before SCOTUS.
► Hawkes is caught between the Scylla of seeking a very costly and time-consuming permit, and the Charybdis of civil and criminal penalties of $37,500 per day (and prison time). The real question may be “when does the cost of choice imposed by the agency become so onerous as to create an effective final agency action?” The issue presented here magnifies the efficacy issues presented in litigation over the Environmental Protection Agency (EPA) and Engineers’ WOTUS jurisdiction rule pending before the United States Court of Appeals for the Sixth Circuit. While the issues are separate, they inherently intertwine and will not go away soon.
Privilege & Persuader Agreements: DOL’s Office of Labor-Management Standards (OLMS) published last Thursday the Interpretation of the “Advice” Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act (LMRDA) final rule. The rule, in development for at least the past six years, adopts the proposed rule with modifications, and claims to provide increased transparency without imposing any restraints on the content, timing, or method by which an employer chooses to inform employees of its position on matters relating to union representation or collective bargaining. DOL claims also that the final rule maintains traditional attorney-client privilege. The LMRDA specifically bars requiring a report on advice given or representation of an employer before a tribunal, and from requiring a practicing attorney to include privileged information. The preamble argues that DOL’s new interpretation does not require reporting of information protected by the attorney-client privilege and “does not infringe upon the common law attorney-client privilege.”
The rule restores the traditional meaning to the term whereby an attorney or a labor relations consultant does not need to report, for example, when he counsels a business about its plans to undertake a particular action or course of action, advises the business about its legal vulnerabilities and how to minimize those vulnerabilities, identifies unsettled areas of the law, and represents the business in any disputes and negotiations that may arise. It draws a line between these activities, which do not have to be reported, and those activities that have as their object the persuasion of employees – activities that manage or direct the business’s campaign to sway workers against choosing a union – that must be reported. An employer’s ability to “accept or reject” materials provided, or other actions undertaken, by a consultant, common to the usual relationship between an employer and a consultant and central to the prior interpretation’s narrow scope of reportable activity, no longer shields indirect persuader activities from disclosure.
In reality, the rule revises the forms and instructions to require more detailed reporting on employer and consultant agreements. Among the instructions for the form:
If you hired an attorney who provided legal advice and representation in addition to persuader services, you are only required to describe such portion of the agreement as the provision of “legal services,” without any further description.
► The core problem here is combining two disparate groups into a single solution – attorneys and labor relations consultants; the former having legal obligations that the latter do not. Consultants present one set of issues, but attorneys present more. The issue may be less whether the rule “infringe[s] upon the common law attorney-client privilege” and more whether DOL was delegated authority to speak to the issue under the LMRDA, i.e. whether the rule is “contrary to privilege” or “in excess of statutory jurisdiction, authority, or limitations.” For example, subsequent to the LMRDA, Congress spoke to the broader issue of privilege and rejected codification in the Federal Rules of Evidence. Although not general applicable to judicial review of administrative action, Rule 501 requires that “[t]he common law — as interpreted by United States courts in the light of reason and experience — governs a claim of privilege unless any of the following provides otherwise: the United States Constitution; a federal statute; or rules prescribed by the Supreme Court.” DOL correctly points out that Congress has required other disclosures by attorneys, but Congress did so, not an agency reinterpreting a half-century old statute. At the end of the day, it is not DOL’s place to determine whether its rule infringes on the common law attorney-client privilege, “[i]t is emphatically the province and duty of the judicial department to say what the law is” with respect to a claim of privilege.
Respirable Crystalline Silica, Morbidity & Mortality Values: After two decades of development, the DOL’s Occupational Safety and Health Administration (OSHA) published its economically significant final Occupational Exposure to Crystalline Silica rule last Friday. The bottom line: OSHA is establishing a permissible exposure limit (PEL) of 50 micrograms of respirable crystalline silica per cubic meter of air as an 8-hour time-weighted average in all industries covered by the rule. OSHA additionally includes requirements for exposure assessment, methods for controlling exposure, respiratory protection, medical surveillance, hazard communication, and recordkeeping. The rule treats construction trades somewhat differently.
The rule becomes effective June 23, 2016. Compliance is general required by June 23, 2018, and some aspects require even longer to implement.
► All sides have criticized the silica rule – equal opportunity dislike. Litigation is not only likely, but given – the issue is not whether a petition for review will be file, but what issues the litigants raise.
A limited scope of judicial review and OSHA’s exceptional breadth of authority to make choices is long standing. OSHA vividly argues its protective mandate with an estimated benefit of $9 million per worker fatality avoided, leading to nearly $9 billion in estimated benefits overshadowing $1 billion in costs (3% discount rate). Such numbers inherently lead to questioning, such as OSHA’s decision to ignore the effects of baseline respirator use on risk. That single assumption may not determine the result, but an accumulation of assumptions and estimates can skew the result.
For another example, OSHA’s final economic analysis points to public comments that third party costs accrue in government programs – from food stamps, to Medicaid and Medicare, to Social Security – that are avoided by the rule’s effect. The next logical step or relevant factor, with large emotional consequences, is the extent to which early mortality terminates these government program costs and, therefore, creates a theoretical benefit. Litigants may join whether exclusion of those offsetting “benefits” rises to the judicial review level of arbitrary and capricious or abuse of discretion. Any “value of life” inherently creates these issues, and while they may be difficult to project for purposes of judicial review, they do cause agencies, litigants, and everyone else discomfort.
Ultimately, economic analysis (or rhetoric) forms only one element in an agency’s final decision to promulgate a rule. The mortality and morbidity values may be only a symptom of the plethora of issues to be litigated in pre-enforcement petitions for review.
The post Monday Morning Regulatory Review – 3/28/16: SCOTUS on WOTUS Jurisdiction & Finality; Privilege & Persuader Agreements; and Respirable Crystalline Silica, Morbidity & Mortality Values appeared first on Federal Regulations Advisor.