Category: Elections

2018 MIDTERMS: The Power of Women, Possibility, and Partisan Rancor

The 2018 midterm elections showcased the power of women, both as candidates and as a key voting demographic. The elections represented a new political moment for women candidates who ran and were nominated in record numbers, particularly in the Democratic party. In total, 272 women ran for House, Senate, or Gubernatorial seats this year. This phenomenon is closely linked to the national gender gap of 25 points in favor of Democrats, which played a particularly key role in highly educated suburbs.

Tuesday’s results also illustrate the power of possibility, with voters siding against newly vulnerable incumbents and in favor of anti-establishment candidates across the country. While the ideological middle of both parties was well represented, progressive Democratic candidates like Beto O’Rourke and Andrew Gillum and anti-establishment Republicans Brian Kemp and Kris Kobach still managed to draw considerable attention and support, signaling increasingly credible challenges from the outer wings of both parties.

Additionally, the elections took place on—and in many ways helped stoke—a toxic and perilous political landscape characterized by negative and fear-inspiring advertisements, the long shadow of potential tampering by foreign states, ideologically motivated domestic terror threats, and tense developments with our allies abroad. The partisan rancor shows few signs of abating, especially as the establishment consensus of both parties continues to fray.

U.S. House of Representatives: Democratic Agenda “For the People” … or Anti-Trump Obstructionism?

The House has changed control and Democrats are now in the majority. Gains for Democrats came primarily from suburban districts Hillary Clinton carried in 2016 like Virginia District 10 (Rep. Barbara Comstock’s district), Illinois District 6 (Rep. Peter Roskam’s district), and Kansas District 3 (Rep. Kevin Yoder’s district). Democrats also made gains in heavily Republican suburbs like Virginia District 7, where Abigail Spanberger defeated Tea Party member Rep. David Brat. Democrats entered with an advantage due to the historically high rate of Republican retirements that surrendered the benefits of incumbency in extremely tight races.

Minority Leader Nancy Pelosi (D-CA) looks likely to ascend to the speaker position over prospective progressive and/or younger challengers. Her speakership would occur despite broader divisions in the party between its long-term establishment leadership and a wave of new candidates and elected officials seeking to pull the party left. The position of minority leader is expected to go to Rep. Kevin McCarthy (R-CA), who has been on the inside track since Speaker Paul Ryan (R-WI) announced his retirement. Majority Whip Steve Scalise (R-LA), who has been spirited around the country along with Rep. McCarthy, will also vie for leadership, but is unlikely to pose a major challenge.

The broader change in control also means committee gavels will change hands. It is an open question whether incoming chairs will focus primarily on articulating a new Democratic agenda or on obstructing Trump administration policy goals. Most likely, they will choose a combination of both. Already, the presumptive chairs of two House committees, Energy and Commerce and Oversight and Government Reform—Reps. Frank Pallone (D-NJ) and Elijah Cummings (D-MD), respectively—have indicated they will greatly increase the number and intensity of inquiries into the administration.

The commitments of the ascendant chairman herald an onslaught of oversight across committees, issues, and departments. Committees will likely take particular interest in issues related to the President’s finances, the Mueller investigation, and the affairs of cabinet officials already subject to ethics inquiries. These inquiries will also focus on industries perceived to have aided in the development of controversial regulatory actions, such as the Department of Energy Grid Resiliency Proposal, and recent moves at the Environmental Protection Agency (EPA) and the Bureau of Land Management (BLM) to relax methane regulations.

One major policy focus for House Democrats may be climate change and countering the administration’s narrative on energy and environmental regulations. Minority Leader Pelosi recently indicated she may bring back the Select Committee on Energy Independence and Global Warming that stood from 2007-2011 and assisted with major cap-and-trade legislation in 2009.

In the midst of these investigations, it is possible that both parties could find common cause on a handful of legislative issues, including infrastructure. Bipartisan legislation on any such issue would require a well-crafted compromise to navigate Democrats’ desire to buck the President, and internal divisions among Republicans on issues like infrastructure funding.

U.S. Senate: Statewide Voting Efforts Boost Republican Candidates 
As the results stand, Republicans expanded their Senate majority to 54-46. Republicans defended seats in key states like Arizona and managed to defeat vulnerable Democratic incumbents in Missouri, North Dakota, and Indiana. Democrats did, however, make one pickup in Nevada where Jacky Rosen defeated Dean Heller.

Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY) will continue to lead their respective parties in the 116th Congress, but both parties are poised to make changes to committee leadership. Specifically, Republicans will select chairs for two key committees: Foreign Relations, currently led by retiring Sen. Bob Corker (R-TN), and Finance, chaired by retiring Sen. Orrin Hatch (R-UT). Leadership is likely to remain constant on committees with energy and environment jurisdiction: Energy and Natural Resources, and Environment and Public Works. If Sen. Bill Nelson (D-FL) goes down to defeat, Democrats will select a new ranking member for the Senate Commerce Committee. The position falls to Sen. Maria Cantwell (D-WA), but since she is the ranking member of the Energy and Natural Resources Committee, the position may instead go to Sen. Amy Klobuchar (D-MN).

The Senate will likely see considerable action on the 182 executive branch nominees and 71 federal judges that have yet to be confirmed. Additionally, the Senate will likely face a number of high-profile nomination fights, with multiple members of the cabinet reported to be considering leaving in the near future, including Attorney General Jeff Sessions, Secretary of Commerce Wilbur Ross, Secretary of the Interior Ryan Zinke, and Secretary of the Treasury Steven Mnuchin. Additionally, the Senate will consider key appointments at EPA and the Federal Energy Regulatory Commission (FERC), including the possible formal nomination of Acting EPA Administrator Andrew Wheeler, as well as a new FERC commissioner.

While room for agreement will be slim, Senators will have to iron out a compromise on certain must-pass issues such as a debt ceiling increase. Additionally, Senators may work together on legislation to address the nation’s opioid crisis, like Sen. Lamar Alexander’s (R-TN) Opioid Crisis Response Act (2018), which passed 99-1. In the energy space, committees of jurisdiction will likely focus on incentivizing energy infrastructure, protecting key assets from cyberattacks, and new technologies in areas like carbon utilization.

And Outside of Washington

Election Day was also important outside of Washington, DC. 36 states held gubernatorial elections this cycle.  Democratic pick-ups (a half-dozen or so) are important for policy developments pushed down to the state level in light of the current administration’s approach to cooperative federalism in regulation. Further, governors elected this time around will still be in office as redistricting proceeds in 2021. Thirty states also elected attorneys general (AG), increasingly important on energy, environment, healthcare and other issues affected by multistate litigation. The four flips to newly-minted Democratic AG’s could have impacts on infrastructure and oil and gas issues in states like Michigan and Colorado.

We also were watching state ballot initiatives very closely this cycle, given the profound implications many had on energy issues in particular. In Washington state, the much-watched Initiative 1631 that would have imposed a $15 carbon tax per metric ton (increasing thereafter by $2 per year until 2035 goals were met) failed by 12 points. A ballot initiative requiring Arizona to source 50 percent of its electricity from renewables by 2030 also failed by almost 40 points. While a similar initiative passed in Nevada, it will have to pass again before becoming operative. In addition, a Colorado ballot measure imposing distance requirements on oil and gas development—an effective ban if passed—failed by about 15 points and did not enjoy the support of either nominee for governor. In each case, the regulated community took the ballot measures seriously and addressed them with sophisticated advocacy campaigns—a sign to come as more issues devolve to the state level.

 

© 2018 Bracewell LLP
This post was written by Scott H. Segal and Dee Martin of Bracewell LLP.

Why does it Matter if the NRA Used Russian Money to help Donald Trump’s Election?

The old saying goes, that “when you have a hammer, everything looks like a nail.” And as a campaign finance lawyer, I have to remind myself that not every story is a money in politics story. But the more I look at the 2016 election and what transpired, campaign finance is at the heart of the scandal.

To wit, this January, McClatchy reported that the FBI is allegedly investigating whether a Russian banker named Aleksander Torshin (who’s also wanted on criminal charges in Spain for unrelated matters) may have funneled money into the National Rifle Association (NRA) for the benefit of the candidacy of Donald Trump in 2016. At this point, all this is just a press report. We don’t have confirmation of this investigation.

In March, Politico reported that the Federal Election Commission (FEC) is investigating whether there really was any Russian money running through the NRA in the 2016 presidential election. This comes on the heels of Oregon Democratic Senator Ron Wyden asking similar questions to the NRA.

Illegal Political Sources

But why would this be so significant if the story of rubles flowing through the NRA is correct? For one, such spending by a foreigner in an American election is totally illegal under American law. Indeed foreign electoral spending has been barred since 1966 amendments to the Foreign Agents Registration Act (FARA). And with a Special Counsel actively indicting people for their roles in the 2016 election, this could become part of that criminal probe.

We Were Warned

Second, if the NRA-Russia-Trump nexus is borne out by the facts, then it will vindicate warnings from Supreme Court Justices and campaign finance reformers who said inviting secretive corporate money into our politics would provide cover for illegal foreign spending in American elections.

This caution was part of Justice John Paul Stevens’ dissent in Citizens United. He was leery of the possibility that inviting corporations into U.S. elections could invite foreign influence. As he wrote, “[u]nlike voters in U.S. elections, corporations may be foreign controlled.” He also noted the absurdity of giving equal protection to foreign speakers in this context: it would be like “accord[ing] the propaganda broadcasts to our troops by ‘Tokyo Rose’ during World War II the same protection as speech by Allied commanders.”

This warning that dark money could hide foreign money was particularly pronounced from transparency advocates among campaign finance reformers. In 2016, the FEC tried to promulgate new rules to clarify reporting requirements. But the FEC deadlocked and no new rules were finalized.

Without Clear Transparency Rules Dark Money Flourished

In the absence of new clear rules from the FEC, or Congress for that matter, dark money has increased. As I described in the law review article Dark Money As a Political Sovereignty Problem, since 2010, over $800 million in “dark money” has been spent in federal elections. Because of the dark money problem, often we don’t know what we don’t know about corporate money in politics—including whether it is from an illegal foreign source.

There is a data chart showing $183.8 million in dark money in 2016; $177.7 million in dark money in 2014; $308.6 million in dark money in 2012 and $135.6 million in dark money in 2010.

The growth of dark money is often blamed on the Supreme Court’s 2010 decision, Citizens United v. FEC. Paradoxically, Citizens United upheld the constitutionality of disclosure of the underlying sources of money in politics by a vote of 8 to 1. But regulators did not take up the Supreme Court’s open invitation to improve disclosure laws after Citizens United, thereby allowing dark money to metastasize like a cancer on our democracy.

How Dark Money Gets Dark

Here’s how dark political money works. Say you have a company that wants to exercise its Citizens United rights, but it doesn’t want to tell the public. That company gives the money to a politically active 501(c)(4) social welfare organization or 501(c)(6) trade association. Then that nonprofit buys political ads in a federal election. The FEC doesn’t require the nonprofit to reveal where it got the money. Even if the company is publicly traded, there is no SEC rule that requires the company to tell investors that they are spending money in politics. For even more secrecy, money can also be routed through a shell corporation like an LLC to make tracing the money even more difficult.

The Allegation

The reporting by McClatchy (and others) alleges that NRA’s Institute for Legislative Action (ILA), a 501(c)(4) arm of the NRA, that does not disclose its donors, received money from the Russian banker Torshin. We don’t know if that happened.

We do know how the NRA spent its money. In 2016, the NRA expended $54,398,558 in outside political spending. The NRA spent $31 million of that money to support Mr. Trump’s candidacy. According to Open Secrets.org, showing $183.8 million in dark money in 2016; $177.7 million in dark money in 2014; $308.6 million in dark money in 2012 and $135.6 million in dark money in 2010.

It is outlandish to think that the NRA would wittingly or unwittingly violate American campaign finance law? At this point we don’t know if they have done anything wrong. However, the NRA has a long history of fighting campaign finance regulations. In 2010 when the Congress was on the verge of passing the DISCLOSE Act which would have brought transparency to money in politics post-Citizens United, lobbyists for the NRA got a legislative carve out so that new disclosure would not apply to them.

The NRA was also center stage in litigation against the last big federal campaign law, the Bipartisan Campaign Reform Act (better known as BRCA or McCain-Feingold). In 2002, the NRA and one its PACs, National Rifle Association Political Victory Fund were plaintiffs challenging the constitutionality of BRCA. This case was consolidated into the case that became McConnell v. FEC, a case that ended up upholding the constitutionality of BRCA, including its campaign finance disclosure requirements. Moreover, in 2001 the NRA was held liable for campaign finance violations from the 1978 and 1982 elections.

Conclusion

Like so many aspects of the multiple investigations into what really happened in the 2016 election, the public has no idea what will ultimately be revealed. Reading the news has become like a live action spy novel. It is possible further investigation will only exonerate the NRA and the Russian banker. But one strain to keep an eye on is whether any foreign money helped elect a U.S. president. Did I mention that’s completely illegal?

 

© Copyright 2018 Brennan Center for Justice at New York University School of Law

Senate Confirms Lee Francis Cissna to lead USCIS

On Oct. 5, the U.S. Senate approved the nomination of Lee Francis Cissna to lead the U.S. Citizenship and Immigration Services agency (USCIS) on a bipartisan vote of 54-43. All Republican senators supported the nomination and were joined by Democrat Senators Donnelly (IN), Heitkamp (ND), Manchin (WV) and McCaskill (MO). Senators Cochran (R-MS), Cortez Masto (D-NV) and Heller (R-NV) did not vote.

 

This post was written by Robert Y. Maples of Greenberg Traurig, LLP. All rights reserved, ©2017

For more legal analysis go to The National Law Review

Watchdog: ‘Reason To Believe’ Trump And Super PAC Violated Election Law

Donald Trump Campaign finance election lawA campaign finance watchdog said Wednesday that chief White House strategist Steve Bannon may have illegally benefited from spending by a pro-Trump super PAC while he led Trump’s presidential campaign.

The Campaign Legal Center believes Make America Number 1, a super PAC that backed Trump, may have improperly subsidized Bannon’s salary. In a letter to regulators on Wednesday, the Campaign Legal Center argued that details in Bannon’s recent financial disclosure give “reason to believe” the Trump campaign and the super PAC may have violated federal election rules.

While Trump initially criticized his Republican opponents for their close ties to super PACs and disavowed outside groups that sought to support his bid, his team embraced outside help during his general election race against Hillary Clinton and pushed the boundaries of federal election rules as much as any other 2016 candidate, testing regulations meant to ensure super PACs operate independently from campaigns.

Bannon’s disclosure, filed March 31, confirmed his financial connection to Glittering Steel, a film production company that was involved with Bannon’s “Clinton Cash” documentary about the Clinton family and “Torchbearer,” which starred Duck Dynasty’s Phil Robertson.

Make America Number 1 paid the film production company nearly $1 million during the 2016 election cycle, with payments starting in July 2015 and continuing after Bannon became the Trump campaign’s CEO. The Trump campaign never paid Bannon, who previously was the executive chairman of Breitbart News, a right-wing news site.

The filing says Bannon resigned from Glittering Steel and stopped receiving monthly consulting payments from the company in August 2016, when he joined the Trump campaign. But the form indicates Bannon kept an ownership interest in Glittering Steel, worth at least $100,000. Bannon’s report says he’s trying to sell his stake in the company.

“As a result, as Bannon worked for the Trump campaign without pay, he continued to benefit, directly or indirectly, from the estimated $267,500 in payments that Make America Number 1 made to Glittering Steel LLC after or around his officially joining the campaign,” wrote the Campaign Legal Center’s general counsel, Larry Noble.

The Campaign Legal Center first filed its complaint with the Federal Election Commission in October. It’s unclear if the agency has decided to investigate, as the FEC doesn’t disclose investigations until they’re completed. Its commissioners have frequently deadlocked on whether to pursue apparent election law violations.

Overall, the FEC has done little to ensure that super PACs remain independent from candidates in the wake of the Supreme Court’s 2010 Citizens United decision, which allowed companies and unions to spend unlimited amounts of money on elections.

Super PACs and politically active nonprofits spent almost $1.5 billion during the last election cycle, with much of the money coming from ultra-wealthy individuals like billionaire Robert Mercer, the conservative hedge fund executive who financed Make America Number 1. His daughter, Rebekah, led the super PAC, which originally backed Texas Sen. Ted Cruz in the Republican primary race.

The Mercers pressed Trump to hire Bannon to lead his campaign, according to the Washington Post. Over the years, the Mercer family has funded Breitbart News, as well as the Government Accountability Institute, a conservative investigative nonprofit led by Bannon. Bannon and the Mercers founded Glittering Steel together, the Post reported.

The Mercers are also major investors in Cambridge Analytica, a data firm that worked for both Make America Number 1 and the Trump campaign. Bannon received monthly consulting payments from Cambridge Analytica and served on its board. Though Bannon’s financial disclosure says he resigned from the firm when he started working for Trump, he still has a stake in the company, worth over $1 million, that he’s planning to sell.

The Campaign Legal Center said that there’s reason to question whether Bannon did in fact resign from Glittering Steel and Cambridge Analytica in August.

Bannon’s financial disclosure says he resigned from Breitbart News then, but Breitbart’s CEO Larry Solov recently told the Senate Press Gallery that Bannon resigned from Breitbart in November, days after Trump’s victory.

The relationship between Bannon and Breitbart News, which gave Trump favorable coverage throughout the campaign, has generated controversy in recent weeks. Bannon has reportedly maintained contact with Breitbart editors about the site’s coverage. That news prompted a liberal watchdog group, Citizens for Responsibility and Ethics in Washington, to request an investigation into whether Bannon has violated his White House ethics pledge.

News reports suggested last week that there’s a growing rivalry between Bannon and Trump’s son-in-law and advisor Jared Kushner, and that Bannon could be on his way out the door, after Trump removed Bannon from a position on his National Security Council.

Trump did little to quiet talk of a shake-up on Tuesday when the New York Post asked him if he still has confidence in Bannon. “I like Steve, but you have to remember he was not involved in my campaign until very late,” he said. “I had already beaten all the senators and all the governors, and I didn’t know Steve. I’m my own strategist and it wasn’t like I was going to change strategies because I was facing crooked Hillary.”

*This article was produced by MapLight in partnership with Fast Company.

ARTICLE BY MapLight

© Copyright MapLight

Inauguration Day 2017: President Donald Trump

President Trump Inauguration DayOne year ago, few people outside of candidate Donald Trump and his closest and most loyal supporters imagined that January 20, 2017, would mark his inauguration as the 45th president of the United States. Regardless, today an estimated 800,000–900,000 people were on hand to witness his inauguration on the west front steps of the U.S. Capitol. As is the tradition, the new president was sworn in by the chief justice of the Supreme Court of the United States, with Donald Trump repeating the 37-word, constitutionally mandated oath of office administered by Chief Justice John G. Robert Jr. There then followed the traditional rendition of “Ruffles and Flourishes” and the first “Hail to the Chief” for President Trump, as well as the howitzers of the 3rd U.S. Infantry’s 21-round gun salute while the First Lady and other members of the Trump family looked on.

Meanwhile, many continue to refuse to accept the election results—in which Trump won a wide majority of votes cast in the Electoral College (301–237) but lost the popular vote by over three million votes. Their protests were reflected by hundreds of thousands of demonstrators in inauguration marches in Washington, D.C., and elsewhere around the country, including the Women’s March on Washington, which an estimated 200,000 individuals—brought to the nation’s capital by 1,400 buses—attended. In contrast to the calls for unity and peaceful transfer of power, a few of the protests turned violent resulting in property damage and police action, including the use of tear gas, pepper spray, and flash grenades, and numerous arrests.

Despite the protests, on January 20, Donald John Trump became the new president of the United States, along with Vice President Mike Pence, and the Trump era was launched.

His relatively brief inaugural address—20 minutes—written by his own hand, lacked the rhetorical flourishes of the most memorable lines from several of his predecessors.

For a president whose national popularity rating of 40 percent, according to a recent poll—the lowest rating of any new president on Inauguration Day over the past six most recent presidents—President Trump’s desire for national unity is an important message to deliver, especially in the face of impending change.

In this regard, President Trump used expressions in his inaugural speech such as “always pursue solidarity” and “We share one heart, one home, and one glorious destiny.” Yet essentially, it was a speech that mirrored his campaign speeches calling to “Make America great again.” Perhaps the most memorable line was,

From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first, America first.

The Trump White House

President Donald Trump and Vice President Mike Pence plan to advance a conservative domestic social and fiscal policy agenda from the White House, and to redefine global relationships with our trading partners, foreign governments, and international organizations. President Trump has promised to quickly overturn President Obama’s executive orders and regulations, as well as repeal and replace the Affordable Care Act, which was passed by a strictly partisan congressional vote with no Republicans voting in favor. President Trump also enjoys a Senate Republican majority to confirm his Cabinet nominees, although confirmation of some may face difficulty. However, Senate confirmation of his choice for the Supreme Court of the United States will be more difficult since, unlike lower federal circuit court judges and administration appointments that cannot be filibustered and only require a simple 51-vote majority to confirm, Supreme Court nominees require 60 votes to overcome a threatened Senate filibuster.

The Republican Congress—Critical to Trump’s Agenda

The Trump era will rely on a Republican-controlled Congress to advance its agenda. Republicans enjoy majorities in both Houses of Congress, albeit by slimmer margins than the 114th Congress. In the new 115th Congress (2017-2018), Senate Republicans hold 52 seats versus 46 Democrats and 2 Independents who caucus with the Democrats, which is 2 fewer Republicans than in the 114th Congress. The slim 52-vote majority makes Senate Republicans susceptible to a 60-vote super-majority vote necessary to invoke cloture to end a legislative filibuster blocking the Trump agenda. In the House the margin is 241 Republicans versus 194 Democrats, which includes 6 fewer Republicans than there were in the 114th Congress but more than sufficient to move the Trump agenda.

What is the Trump Agenda?

President Trump’s Inaugural Address echoed themes he had sounded over the course of his candidacy. Key excerpts from his speech reflect his priorities:

  • “We assembled here today are issuing a new decree to be heard in every city, in every foreign capital, and in every hall of power. From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first. America first.”

  • “What truly matters is not which party controls our government but whether our government is controlled by the people.”

  • “January 20th, 2017 will be remembered as the day the people became rulers of this nation again.”

  • “When you open your heart to patriotism, there is no room for prejudice.”

  • “A new national pride will stir our souls, lift our sights and heal our divisions.”

First 100 Days

On the first day, the Senate will confirm two of President Trump’s Cabinet nominees: retired United States Marine Corp general, James “Mad Dog” Mattis as Secretary of Defense and retired Marine General John Kelly as Secretary of Homeland Security.

Although President Trump will take executive actions on Inauguration Day following his swearing in, he has stated that he considers his “first day” to be Monday, January 23.

President Trump’s first 100 days in office are likely to include a laser-beam focus on:

  • confirming his Cabinet and sub-Cabinet nominees;

  • repealing the Affordable Care Act (or “Obamacare”) and replacing it with a slimmed-down version;

  • overturning most, if not all, of President Obama’s executive orders and instructing the Trump Executive Branch agency heads to undo Obama regulations by reverse rulemaking or by withdrawing their agencies’ legal defenses of such regulations before the federal appellate courts where they have been enjoined permanently (e.g., the persuader rule) or preliminarily (e.g., the government contractor “blacklisting” rule);

  • redesignating the chairs of the National Labor Relations Board (NLRB) and the U.S. Equal Employment Opportunity Commission (EEOC), and filling vacancies in those two agencies;

  • nominating a new Supreme Court justice and candidates for the lower federal circuit courts of appeals;

  • beginning work on immigration policy, infrastructure, tax reform, and trade policy; and

  • negotiating a spending bill to fund the federal government before the continuing resolution expires in April 2017.

How Might Labor and Employment Policy Change Under President Trump?

Under President Trump, expect a significant reversal of Obama labor and employment policies at the U.S. Department of Labor (DOL), NLRB, and the EEOC.

Traditional Labor. In terms of labor policy, for example, a recent study concluded that over 4,559 years of judicial precedent was overturned in eight years by the Obama Board in favor of pro-union policies. Expect gradual reversal of many of those decisions by a new Trump Board. Reversals will be slowed, however, by the need for a “live” case (the NLRB is not permitted to issue advisory opinions) and by incumbent pro-union Democratic General Counsel Richard Griffin, whose term expires in November of 2017.

Joint-Employer. Also, expect reversal of the Obama policy on “joint-employer” status, which saddles franchisors with the collective bargaining obligations and labor law violations of their franchisees. The ubiquitous Obama joint-employer standard has been developing government-wide by the NLRB (in its Browning-Ferris Industries decision) as well as by the DOL’s Wage and Hour Division and Occupational Safety and Health Administration, and by the EEOC. Business groups argue that the joint-employer standard would destroy the franchise model. We can likely expect the Trump administration to move quickly to reverse these joint-employer policies, especially if the chief executive officer of CKE Restaurants, Andy Puzder is confirmed as Secretary of Labor.

Wage and Hour Issues. On issues such as the “salary basis” for the Fair Labor Standards Act’s overtime exemption for white collar employees (executive, administrative, or professional employees), and the minimum wage, expect the Trump administration to propose significantly lower increases than those proposed by President Obama. Similarly, expect Trump to advance some version of a federal paid family leave law, although without some of the onerous provisions previously advocated.

Executive Orders. On issues like “government contractor blacklisting” (Executive Order 13673, “Fair Pay and Safe Workplaces” and its implementing regulations and DOL guidance), President Trump has promised to quickly rescind the executive order, perhaps on his first day in office. The same is true with Obama’s other labor and employment executive orders starting with those from the first days of the Obama presidency.

Persuader Rule. As for the “persuader” regulations, expect Trump to instruct his Justice Department and Department of Labor to withdraw their appeals in the Fifth Circuit of the permanent injunction granted by a federal district court in Texas. The same is true of the appeal of a preliminary injunction of the Labor Department’s overtime regulation entered by another federal district court in Texas. By withdrawing from the litigation, the Trump administration would effectively end those regulations without going through a burdensome and time-consuming reverse rule making.

Immigration. In addition to reversing and replacing Obamacare and rescinding other Obama labor and employment executive orders and regulations, immigration reform is a high priority for the Trump administration. Under President Trump, immigration policy will focus on boarder security, restrictions on entry, and deportation of undocumented aliens.

Court Vacancies. Finally, the composition of federal courts, including the Supreme Court of the United States, is important to labor and employment policy. Filling the vacancy on the Supreme Court, and the 100 vacancies in the lower federal courts, will be a priority. Currently, for example, only the Fifth, Sixth, Seventh, and Eighth Circuits retain majorities appointed by Republican presidents. Now, after the “nuclear option” was rammed through the Senate by then-Majority Leader Harry Ried (D-NV), it is possible that the Senate confirmation of judicial appointments will not be filibustered and will only require a simple 51-vote majority. We can likely expect President Trump to move quickly to fill those vacancies.

Post- Inauguration Day 2017: The Trump Era Begins

The next four years potentially will bring dramatic changes in domestic and foreign policy. One of the most significant changes likely will be in labor and employment policy. As with all of his predecessors throughout U.S. history, President Trump enters the White House hoping to bring about change. Time will tell.

ARTICLE BY Harold P. Coxson of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

The Unknown Future Of The Affordable Care Act

Donald Trump Affordable Care Act

Donald Trump’s victory to become the next president of the United States, and the Republican Party’s continued control of the United States Senate and House, will likely have a significant impact on the future of the Affordable Care Act (ACA). President-elect Trump (Trump) has vowed to immediately dismantle the ACA. To date, Trump has provided only a broad outline of what exactly he plans to replace the law with, such as the following:

  • Eliminating ACA requirements which generally require (1) individuals to maintain health insurance, and (2) employers with more than 50 full time employees to offer affordable major medical plan coverage or run the risk of paying penalties;

  • Eliminating tax subsidies that eligible individuals can use to purchase coverage and/or offset costs under health insurance exchanges;

  • Expanding the use of health savings accounts to pay deductibles, copayments, etc.;

  • Establishing tax breaks to allow taxpayers to deduct premiums they pay for individual health insurance policies;

  • Allowing health insurance across state lines;

  • Allowing states to manage Medicaid funds;

  • Modifying or eliminating the ACA’s “essential health benefits” requirements;

  • Expanding age rating bands (increasing the range of premiums that will be allowed); and

  • “Modernizing” Medicare.

Despite his general opposition to the ACA, Trump has expressed support for ACA rules which prohibit insurers and employer plans from excluding coverage for expenses related to preexisting conditions. However, those prohibitions force insurance companies and employer plans to bear significant costs. The ACA’s employer and individual coverage mandates were intended to make the pre-existing condition exclusions more palatable to payers by forcing healthy individuals into the applicable insurance pools. Consequently, it is unclear how Trump would preserve the pre-existing condition exclusions yet eliminate the employer and individual mandates.

In addition, the ACA contains hundreds of provisions affecting hospitals, corporations, Medicare, health care quality and integrity, the health care workforce, biosimilars, health care prevention and other issues unrelated to what most people think of as “Obamacare.” To date, Trump appears not to have taken any public position on these provisions.

ARTICLE BY Molly R. Berkery, Todd M. Cleary, John E. Donahue, Thomas N. Shorter, Charles G. Vogel & Jed A. Roher of Godfrey & Kahn S.C.

Copyright © 2016 Godfrey & Kahn S.C.

Post-Election Outlook for Higher Education

higher educationAmerican higher education confronts a starkly different reality today in the aftermath of an election that yielded both a Republican administration and a Congress with Republican majorities in the House and Senate.  While the full impact may take years to assess, a preliminary review suggests some results are likely in the near term, including:

  • Dramatic changes in Department of Education enforcement actions based on departmental guidance;

  • Less government support for public institutions as Republicans seek to constrain both state and federal spending;

  • Less support for the concept of free community college;

  • Substantial changes in the manner in which federal student aid is administered;

  • Added scrutiny of institutions with large endowments;

  • Greater pressure for lower tuition.

In the long term, the federal regulatory environment will stabilize, and institutions can adapt to the new environment in which they will operate.  For now, institutions facing enforcement actions based on departmental guidance should consider the likely impact of the election on enforcement actions based on departmental guidance.  A new set of policy makers will soon be ensconced at the Department of Education, and their priorities can be expected to be quite different.  Those changes in priorities will be quickly reflected in changes in guidance documents, and the revised guidance documents could either be helpful or harmful to institutions currently subject to enforcement actions.

ARTICLE BY James H. Newberry Jr.
© Steptoe & Johnson PLLC. All Rights Reserved.

President-Elect Trump’s Impact on Affordable Care Act

Health, Stethoscope, Affordable Care ActFor years, the Republican-controlled Congress has vowed to repeal or significantly scale back President Obama’s landmark legislation – the Patient Protection and Affordable Care Act (the “ACA”). During his campaign, President-elect Donald Trump repeatedly promised that he would “immediately repeal and replace” the ACA upon taking office.  Assuming Trump follows through on his promise, the ACA’s days are likely to be numbered, at least in its current form.  The scope of such repeal remains uncertain, however.  Trump has indicated that the ACA cannot simply be repealed – it must be replaced.  To date, he has not provided the details of any alternative to the ACA.

Under the current House proposal, the ACA’s individual and employer mandates would be repealed outright.  Although the controversial excise tax on high-cost health care (i.e., the so-called “Cadillac Tax”) would also be repealed, the proposal would put a cap on the deduction that employers can take for the cost of healthcare provided to employees.  It is also expected that the proposed alternative would give tax credits to individuals without employer-provided health coverage and expand the tax benefits associated with health savings accounts.  Certain popular aspects of the ACA, such as the prohibition of preexisting condition exclusions, dependent coverage through age 26 and Medicaid expansion, would remain in place. Democrats are likely to strongly oppose the House proposal. There probably will be little that Democrats will be able to do, however, to stop the repeal/replacement of the ACA facing Trump and a Republican-controlled Congress.

ARTICLE BY Paul M Hamburger of Proskauer Rose LLP

© 2016 Proskauer Rose LLP.

Impact of Presidential Election on Key United States Supreme Court Cases

Supreme CourtAmerica’s next President will potentially have the authority to nominate more than one United States Supreme Court Justice before the end of his or her presidency. Notably, during the final debate, this subject of Supreme Court appointments by the President Elect was one of the six topics for discussion and was identified as one of the top issues among voters. Employers should take note because the Supreme Court may hear several cases in the upcoming term that could have significant implications for employers across the country with respect to (1) the enforceability of class action waivers, (2) pre-suit obligations of the Equal Employment Opportunity Commission (“EEOC”) in discrimination complaints, and (3) the issue of transgender rights.

(1) The Enforceability of Class Action Waivers in Arbitration Agreements

Following the Court’s ruling in 2011 in ATT Mobility LLC v. Concepcion1, where the Court in a 5-4 decision held that the Federal Arbitration Act preempted California from refusing to enforce class action waivers in consumer contracts, many employers have utilized waivers in arbitration agreements as a method of avoiding, or reducing, the risks of class or collective actions by employees alleging employment-related claims such as wage-and-hour violations and unlawful discrimination.

However, the safe haven apparently created under Concepcion has been under attack and led to inconsistent federal circuit court rulings applying its holding. Now, the Supreme Court has the opportunity to reconcile a split in the federal circuits regarding the enforceability of class action waivers in arbitration agreements. Because former Justice Scalia authored the Concepcion opinion, his replacement could impact its holding.

(2) EEOC Obligations with Respect to Discrimination Complaints

Recent discrimination cases have challenged aspects of the EEOC’s pre-suit obligations to investigate and attempt to conciliate discrimination charges before filing a lawsuit. Many judicial opinions have cited MachMining LLC v. EEOC2, a case in which the Supreme Court held that the EEOC’s statutory obligation to attempt conciliation with an employer as a prerequisite to a Title VII suit is subject to judicial review—although the scope of that review is narrow—and also established that form letters announcing the initiation and conclusion of the conciliation process alone do not satisfy the statutory obligation to attempt to facilitate conciliation with the employer.

In October 2016, the Supreme Court denied certification in EEOC v. Sterling Jewelers Inc.3, a matter of first impression in which the Second Circuit cited MachMining LLC v. EEOC in a decision permitting the EEOC to pursue a nationwide sex discrimination lawsuit on behalf of female retail store employees. Sterling Jewelers Inc.4 established that while a court may review whether the EEOC conducted an investigation into a formal charge of discrimination as a prerequisite for bringing an enforcement action under Title VII, it may not review the sufficiency of the agency’s investigation.

The case to watch is The Geo Grp. v. EEOC5, which is being docketed for review by the Supreme Court. The Ninth Circuit cited MachMining6 in a decision that allows the EEOC to litigate 19 sex discrimination claims despite the fact that the agency did not identify the alleged victims until after filing the lawsuit on the basis that MachMining7 permits the identification of a class of people as an alternative to identifying the individual alleged victims.

While many believe that the 2015 MachMining opinion could have potentially reversed the Ninth Circuit’s holding in Geo Grp., the Court (with a newly appointed Justice) could possibly walk back the limited judicial review permitted by the previous Court or establish a broader scope of judicial discretion in determining whether or not an attempt of conciliation with an employer took place in order to satisfy the EEOC’s statutory requirement under Title VII.

(3) Transgender Rights

In August, the Supreme Court stayed the Fourth Circuit Court of Appeals ruling in Gloucester Cnty. Sch. Bd. v G.G.8, keeping Grimm, an individual who was born a female, but identifies as a male, from using the boys’ restroom at school, while it decided whether it would take the case. On Friday, October 28, the Supreme Court announced it would in fact take up the issue. The Court’s holding on whether the U.S. Department of Education’s interpretation of the word “sex” is appropriate, as it relates to Title IX discrimination cases, could have wide ranging impact on litigation involving H.B. 2 from North Carolina and employers as they address transgender issues in the workplace.

ARTICLE BY Marc D. Katz, Isabel Crosby &  Jason R. Regas of Andrews Kurth Kenyon
© 2016 Andrews Kurth Kenyon LLP

1. ATT Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

2. MachMining LLC v. EEOC, 135 S. Ct. 1645, 126 FEP Cases 1521 (2015).

3. Sterling Jewelers Inc. v. E.E.O.C., No. 15-1329; EEOC v. Sterling Jewelers Inc., 801 F.3d 96 (2nd Cir. 2016).

4. Id.

5. The Geo Grp. v. EEOC, No. 16-302; Arizona ex rel. Horne v. Geo Group, Inc., 816 F.3d 1189 (9th Cir. 2016).

6. MachMining LLC v. EEOC, supra.

7. Id. at 1648.

8. 136 S. Ct. 2442 (2016) (per curiam).

New Presidency Will Compel Action in Key Areas of Health Care in 2017

health careAs we enter the final stretch of the U.S. presidential election, health care remains one of the most contested issues with great potential for change, particularly to existing insurance and patient care systems. Compounding matters is the opening of enrollment season for exchange plans, which places the already hotly debated Affordable Care Act (ACA) at the forefront of the national health care discussion.

Former U.S. Congressman Dennis Cardoza, co-chair of Foley’s Federal Public Affairs Practice, and Public Affairs Director Jennifer Walsh opined recently about how our next president could symbolically break the congressional logjam on several health care-related fronts and why the industry is poised for more market-driven disruption.

What follows are a few highlights of their conversation.

1. What health policy issues will be most impacted by the next administration?

Cardoza: Since the passage of the ACA, there has been very little legislative activity when it comes to health care, as everything has been done at the administrative level and spread across various departments. During the honeymoon period that follows every newly elected president, we’ll likely see an immediate and significant push around the ACA marketplaces, especially in light of some high-profile defections, decreasing competition and increasing premiums. It doesn’t matter who is in the White House; there are things happening in the market that can’t be ignored.

Walsh: I agree that legislation concerning the exchanges will be the first out of the gate. There is a strong impetus to fix the system, but it may happen initially as part of the reauthorization of the Children’s Health Insurance Program (CHIP) that is set to expire in 2017. CHIP is a bi-partisan issue and no one wants to see it lapse. This must be passed in the first or second-quarter and could grease the skids for other ACA measures that are either attached as amendments or follow in subsequent bills.

On a separate, simultaneous track, drug pricing will continue to be scrutinized. Lawmakers will pick up where they left off leading up to the August recess. It’s now part of the national dialogue and lawmakers will continue to discuss how to address the issue.

2. Will merger activity continue on its current, accelerated pace?

Cardoza: The ACA has forced market consolidation due to everyone’s ability, or rather inability to compete over costs. We may see other large insurance plans leave the exchanges if the Department of Justice doesn’t approve their respective mergers.

Walsh: Mergers have been an interesting consequence of the ACA, and we’ll see more alignment in this regard. They don’t always generate big news headlines, but smaller acquisitions of technology assets and payments systems are happening all over, so health care organizations can build their portfolios.

3. What are some other noteworthy developments you’re watching closely?

Cardoza: Concluding a long, iterative process, the Centers for Medicare & Medicaid Services will soon be rolling out its new health care payment and service delivery models as part of the transition from fee-for-service. Next year will be a key period as we work toward full-blown implementation of new reimbursement practices that reflect better value and promote quality care for patients.

Walsh: The 21st Century Cures Act, which is Representative Fred Upton’s legacy issue, has received broad bipartisan support and already passed the House. It will allocate more funding to the National Institutes of Health to explore new cures and treatments, and incent to innovative approaches to disease management. It should get a fair shake in 2017, if not during the upcoming lame duck session.

4. What should health care executives be thinking about heading into 2017?

Cardoza: Complacency has set in with the Washington gridlock, and many executives with bearish outlooks have accepted the broken system and are merely just controlling costs. However, they need to change their mindset and be more cognizant of what could soon affect their business, as we’re about to enter a transformative year where there will be a lot of moving parts. If they’re not informed and engaged, they’re going to get left behind.

Walsh: The uncertainty surrounding the ACA has certainly caused a lot of angst, and makes planning for businesses extremely difficult. Companies need to channel that energy into advocacy for their organization. Although every system is different, the industry-wide movement toward modernization, value, and quality will affect all parties. While it will be incremental, the change that will be prompted by the election is inevitable.

ARTICLE BY Dennis A. Cardoza & Jennifer F. Walsh of Foley & Lardner LLP

© 2016 Foley & Lardner LLP