Category: Administrative & Regulatory

Legal Ramifications of Flouting Mask Rules by Members of Congress

During the invasion of Congress on January 6, 2021, members of Congress were forced to take shelter for a few hours with a large group of their colleagues. Several Democratic members of Congress—Reps. Bonnie Watson Coleman (N.J.), Pramila Jayapal (Wash.), and Brad Schneider (Ill.)—have revealed that they have tested positive for COVID-19 after sheltering with colleagues who refused to wear masks. There have been rules in place since July 2020 that require masks in House office buildings and on the floor of the House, but those rules have not been consistently enforced. A number of House Republicans did not wear masks during the emergency sheltering and refused to accept masks offered by Rep. Lisa Blunt Rochester (Del.). House leadership has committed to enforce the rules more stringently going forward and impose fines starting at $500 on members who do not wear masks on the House floor. Democratic Representatives Debbie Dingell (Mich.) and Anthony Brown (Md.) have introduced legislation that would go farther, imposing fines of $1,000 per day on House members who do not wear masks on the Capitol grounds.

But do representatives who have contracted COVID-19 have any legal remedy for holding the House or other individual House members liable for their having contracted the virus?

First, it is important to note that no one can say with certainty when, where, or how they contracted the virus. Representative Schneider has acknowledged directly that he does not know that he contracted the virus during the insurrection, but that his exposure during the shelter in place was the greatest exposure he has experienced during the pandemic. He surmises that the fact that three people (thus far) have tested positive points to the forced sequestering with unmasked colleagues as the probable source of infection. There has been no reporting on whether the Republican members who refused to wear masks have tested positive for the virus, making the proof of the source of the infection more challenging.

Second, even assuming the newly infected Representatives could establish they contracted the virus from unmasked colleagues on January 6, their legal remedies are extremely limited. While employees in the private sector could complain to the Occupational Safety and Health Administration (OSHA) about unsafe working conditions, the Occupational Safety and Health Act (29 U.S.C.§ 654) does not apply directly to the U.S. Congress. Under the Congressional Accountability Act (CAA), 2 U.S.C. § 1341, the legislative branch is required to comply with OSHA standards mandating that the workplace be free from recognized hazards likely to cause death or serious injury. Under the CAA, a member of Congress or a staff person can request that the General Counsel of the Office of Congressional Workplace Rights (OCWR) conduct an inspection of unsafe working conditions. If the inspection determines there are unsafe working conditions, the OCWR General Counsel can issue a citation or notice of violation. If the violation has not been corrected after that notice, the General Counsel may file a complaint to be submitted to a hearing. Currently, even without a formal complaint to the OCWR, Congress has taken steps to more rigorously enforce its rule requiring masks in congressional workplaces.

Third, assuming a member of Congress who contracted COVID-19 could prove he or she was infected by a specific colleague who was not wearing a mask, legal recourse against that colleague would likely be barred by the terms of the Speech or Debate Clause of the U.S. Constitution, contained in Article I, Section 6. This clause states that members of both Houses of Congress “shall not be questioned in any other Place” about any speech or debate and shall be “privileged from Arrest” during attendance at a session of Congress. The limitation on questioning a member of Congress about speech or debate is intended to protect them from efforts by members of the Executive branch or members of the public to interfere with their exercise of their legislative duties. The refusal to wear a mask might not be seen as an aspect of legislative debate, but at least one Republican who refused to take the mask offered by Representative Rochester was heard to say she did not want to make this “political,” and those who refuse to wear masks may assert that they do so for political reasons.

If the Speech or Debate Clause did not bar a suit by one Representative against another, the legal claim would likely be one for tort damages related to an intentional assault, which requires proof that an individual deliberately acted to cause another to fear imminent harm. There have been numerous tort cases filed against cruise ships, nursing homes, and entertainment venues by people exposed to COVID-19. Suits against individuals are rare, but might follow the theories advanced by individuals exposed to the Human Immunodeficiency Virus (HIV). HIV cases ordinarily involved battery claims because of the means of transmission through close bodily contact, but because COVID-19 is transmitted through airborne particles, liability would not necessarily be predicated on physical contact but merely the apprehension of contracting the airborne virus.

Establishing liability for COVID-19 infection is difficult in any workplace. As in many other areas of employment and tort law, imposing liability on members of Congress is even more challenging. In the absence of targeted legislation, members of Congress may have little recourse against colleagues who expose them to a greater risk of infection by their refusal to comply with basic health and safety practices during the pandemic.

ARTICLE BY Carolyn Wheeler of Katz, Marshall & Banks, LLP
For more, visit the NLR Coronavirus News section.

Stimulus Bill Extends the Availability of Student Loan Forgiveness (US)

Section 2206 of the CARES Act allowed an exclusion of up to $5,250 from an employee’s gross income, if an employer paid principal or interest on an employee’s “Qualified Education Loan”.

Section 2206 of the CARES Act was only designed to be in effect for calendar year 2020. However, The Consolidated Appropriations Act, 2021 (the “CAA”) extends this provision of the law through December 31, 2025.

This provision of the CAA is in Section 120 of Division EE, called “The Taxpayer Certainty and Disaster Tax Relief Act of 2020”.

It does not appear that during 2020, many employers decided to provide student loan forgiveness as an employee benefit. Given the pandemic, that is certainly understandable. However, going forward, it might be something that employers might find more attractive as a recruiting or retention tool. Thus, the following is a brief refresher on this benefit.

Code Section 127 – Education Assistance Programs

Internal Revenue Code (the “Code”) Section 127 has for a very long time, provided an exclusion from an employee’s gross income for reimbursement provided to the employee under an employer’s “educational assistance program”. The maximum amount of tax-free reimbursement is $5,250 per calendar year.

The employee’s education under the program may be reimbursed without regard to whether it relates to the employee’s employment. However, the educational expenses cannot pertain to a sport, game or hobby.

The CARES Act

Section 2206 of the CARES Act amended Code Section 127 to allow an employer to pay for all or part of an employee’s “Qualified Education Loan” as a tax-free benefit, provided that benefit is provided as part of an employer’s education assistance program.

An important point to note is that the employee would not have had to incur the educational expenses while that person was an employee of the employer.

For example, an existing employee with student loan debts that were incurred prior to be being hired, can have that debt forgiven under the plan. Likewise, a newly hired employee with pre-existing student loan debt can also have that debt forgiven under the plan.

Code Section 127 – Employer Plan Requirements

Under Code Section 127, the employer must establish a written plan and communicate the terms of that plan to eligible employees. In addition, the Plan must satisfy the following requirements:

  • The terms of the Plan cannot discriminate in favor of highly compensated employees (“HCEs”).
  • For this purpose, Code Section 414(q) is referenced. In 2021, an employee is an HCE if he or she had compensation of more than $130,000 in 2020. 5% owners of businesses are also considered to be HCEs.
  • Collectively bargained employees must be considered in determining nondiscrimination eligibility requirements, unless educational assistance benefits were the subject of good faith bargaining.
  • Controlled group rules apply for testing nondiscrimination.
  • The calendar year $5,250 maximum exclusion for loan forgiveness must be combined with any other educational assistance that is provided to the employee under the employer’s Code Section 127 plan for that calendar year.
  • The plan cannot permit an employee to choose between taxable compensation and benefits and the educational assistance. Thus, an employee cannot elect salary reduction as a means of participating in the Section 127 plan. Simply put, the benefits under the plan have to be employer paid benefits.

Qualified Education Loans

The rules that define what will qualify as a “Qualified Education Loan” are somewhat complex. The IRS advises taxpayers to review Chapter 4 of IRS Publication 970.

However, in general, the loan had to be incurred for the employee’s costs of attendance (i) in pursuit of a degree, certificate, or other program that would lead to a “recognized educational credential”, and (ii) while carrying a course load at least one-half (1/2) of the normal course load for that particular course of study.

Loans from the government or a financial institution are fine. Loans from family members don’t qualify. Loans from tax-qualified employer retirement plans (e.g. 401(k) Plans) don’t qualify.

Attendance at an “eligible education institution” is required. In general, this will include all colleges, universities, vocational schools and other post-secondary institutions that are eligible to participate in the federal student aid program.

Costs of attendance at the eligible education institution include tuition and fees, books, supplies, transportation, miscellaneous personal expenses, room and board and various other costs.

© Copyright 2020 Squire Patton Boggs (US) LLP

ARTICLE BY Gregory J. Viviani and Joseph P. Yonadi, Jr. of Squire Patton Boggs (US) LLP
For more, visit the NLR Coronavirus News section.

EPA Releases Late-Term “Secret Science” Rule

Regulated industries pay close attention to how regulators use scientific data, because the stakes are high. While scientific knowledge may evolve rapidly, regulatory processes — and the business decisions that rely on them — tend to proceed more deliberately. As a result, the regulated community has long pushed the U.S. Environmental Protection Agency (EPA) to base its decisions only on scientific information that is present in the public domain and thus subject to greater scrutiny.

On January 6, 2021, EPA finalized its long awaited anti-“secret science” rule, which requires EPA both to disclose the science on which significant regulatory actions are based and to assign weight to scientific evidence in part on whether underlying data is available. EPA frames this rule as an incremental, internal process-oriented step toward the transparency that is an essential part of the scientific method. Businesses in the regulated community should not expect to be able to point to this rule to control evidence coming into site-specific rulemaking, but may benefit from increased investor confidence that EPA actions with industry-wide impact will be based on data available for independent validation.

Scope of the Rule

The rule, entitled “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information”, applies to the two categories of EPA actions indicated in the title: the promulgation of significant rules, such as those that have nationwide impact, and the dissemination of scientific information likely to have nationwide policy- or decision-making impacts. Furthermore, the rule targets EPA’s analysis of only one type of scientific evidence, dose-response data, which are facts that characterize the relationship between the amount of an exposure to a substance and the observation of an effect.

How EPA Will Evaluate Dose-Response Data

The key provision of the rule is a three-step funneling process to winnow the universe of “convincing and well-substantiated evidence” relevant to making a decision about relationship between exposure to a substance and an effect:

  • First, EPA must identify a subset of the universe of evidence from which it could “characterize a quantitative relationship” between exposure and effect.
  • Second, EPA must designate as “pivotal science” the particular studies on which it could rely to reach its own conclusion about the quantitative relationship between exposure and effect.
  • Third, EPA must identify whether those particular studies allow for reanalysis of results (actual validation is not required). While EPA may consider all studies available to it, the rule requires it to give greater consideration to those studies that can be independently validated. For those studies at the end of the funnel whose data cannot be readily reanalyzed, the rule sets out factors EPA must consider when determining how much weight to assign their results.

The rule also requires EPA to identify the science that serves as the basis for significant regulatory action and to state the reasons for relying on any studies based on dose-response data that is not available for reanalysis.

A Lasting Move Toward Transparency?

Regulations issued in the waning hours of a presidential term often can be rescinded by executive action or under the Congressional Review Act (CRA). The CRA allows certain of these regulations to be vacated by a joint resolution of Congress. EPA has taken the position that the CRA does not apply here because this is an internal “housekeeping” regulation. Whether it applies or not is likely to among the potential challenges the “secret science” rule faces in court in rulemakings involving human health. We will keep you posted on how any court challenges progress.

© 2020 Schiff Hardin LLP

ARTICLE BY Matthew H. Griffin and J. Michael Showalter of Schiff Hardin LLP
For more, visit the NLR Environmental, Energy & Resources section.

What Were the Three Biggest Labor Law Developments In 2020?

With the year end in sight, employers are looking back on a tumultuous 2020 and preparing for more labor law changes in 2021. This year at the National Labor Relations Board (NLRB), companies saw a lot of positive change from a management perspective. Election rule changes gave employers some breathing room on the union avoidance front, and the NLRB exercised restraint in relaxing its enforcement standards against employers during the pandemic. But as the new year approaches, a union-friendly administration waits in the wings, presenting a real possibility that the positive change for employers may be coming to an end.

Employer-Friendly Election Rules

2020 saw the NLRB’s much maligned ambush election rules scrapped, in part, and replaced with employer-friendly rules. The ambush election rules had resulted in truncated campaign periods that left employers at a disadvantage. The new rules, while not without their own challenges, extend the period of time between the filing of a representation petition and the election. Employers can look forward to 2021 knowing the new rules will give them more time to combat a union organizing drive.

NLRB’s COVID-19 Response and Guidance

The NLRB’s guidance related to COVID-19 was at times slow and presented a mixed bag to employers.

On one hand, the NLRB’s election-related guidance gave Regional Directors wide discretion on how to conduct elections during the pandemic. This led to a large increase in mail-ballot elections, normally the less-preferred method of conducting elections. Ultimately, this did not change the overall union win rate, which remained around 70 percent.

On the other hand, the NLRB demonstrated a willingness to give employers leeway during the pandemic. Faced with an emergent situation without a true parallel in case precedent, employers were forced with situations where they had to make immediate unilateral changes to terms and conditions of employment, for example requiring temperature screenings or PPE, changing staffing levels, or shutting down facilities. Normally, making unilateral changes to terms and conditions of employment without first bargaining with the union will result in an unfair labor practice charge. But starting in July, the NLRB began issuing informal advice email memos instructing Regional Directors to dismiss several complaints where employers were forced to make these unilateral changes because of the emergency posed by COVID -19. The NLRB general counsel’s position was that if the unilateral change was reasonably related to the emergent pandemic, employers were justified in carrying out the change unilaterally so long as they bargained with the union within a reasonable time thereafter.

New Presidential Administration Coming in 2021

In November, employers learned that Joe Biden had been elected as the new President of the United States. Set to take office on Jan. 20, 2021, President-elect Biden described himself as “the strongest labor president you have ever had” – setting the tone for what could be big changes on the horizon. Any labor law changes supported by the new Biden administration would likely have to wait until the composition of the NLRB’s five-member Board changes. At the earliest, that would be August 2021. Further, Biden will not be able to appoint his own NLRB general counsel – the official in charge of all NLRB Regional Offices – until November 2021. While wholesale changes are not likely until late 2021 at the earliest, employers should brace for a pro-union shift, which could take the form of precedent-changing decisions, rulemaking, or even substantive pro-union legislation.

What a year – we’ll see what 2021 has in store. Stay tuned.

© 2020 BARNES & THORNBURG LLP
For more articles on labor law, visit the National Law Review Labor & Employment section.

Trump Signs IoT Cybersecurity Improvement Act into Law

On Dec. 4, 2020, President Donald Trump signed into law the bipartisan-backed Internet of Things Cybersecurity Improvement Act of 2020. By its terms, the new law applies solely to federal government agencies, but its downstream consequences are likely to reach further, impacting devices procured by the federal government and—likely, eventually—consumer devices.

Internet of Things (IoT) devices are in widespread use, most visibly by consumers of new smart home devices. The new law defines IoT devices as those devices that:

  1. Interact with the physical world
  2. Have a network interface for transmitting or receiving information via the internet
  3. Are not conventional information technology devices such as smartphones or laptops and cannot function as a component of another device such as a processor

Despite having a highly technical definition, IoT devices are common and becoming increasingly so. You probably even have several in your home or office, with many wireless devices—like refrigerators, smart speakers, networked printers, security systems and locks—satisfying this definition of an IoT device.

Though perhaps less visible than consumer adoption of IoT devices, the federal government’s use of IoT devices is increasing and, given the federal government’s significant size and buying power, impacting the market in meaningful ways. For instance, the Environmental Protection Agency (EPA) uses sensors that transmit data regarding weather conditions. Customs and Border Protection (CBP) uses autonomous surveillance towers that detect and identify items of interest at the border. NASA even uses spacesuits that monitor and transmit data regarding astronauts’ vital signs. Although these items often serve more sophisticated functions than IoT devices purchased and used by consumers, many of the underlying technologies are similar or even identical.

Despite, or perhaps because of, their growing adoption, IoT devices are generally viewed as being more vulnerable to cyberattacks and subject to abuse as part of distributed denial of service (DDoS) attacks.

The IoT Cybersecurity Improvement Act seeks to reduce those risks, at least among IoT devices procured by the federal government. To achieve this goal, the new law:

  1. Tasks the National Institute of Standards and Technology (NIST) with developing, publishing and updating security standards for IoT devices
  2. Requires the Office of Management and Budget (OMB) to review each federal agency’s information security policies to ensure they comply with the standards NIST promulgates for IoT devices
  3. Prohibits federal agencies from procuring any devices that fail to comply with NIST’s standards

Although NIST’s standards are not yet drafted and, even when they are, will not impose any direct requirements on the private sector, it is important for all device manufacturers and sellers to pay close attention to developments. The sheer size and scope of the federal government’s buying power may result in private sector businesses adopting the eventual NIST standards to ensure they can sell devices to the government. Similarly, the eventual NIST standards may provide a possible baseline for private sector businesses to satisfy and bring themselves into compliance with state IoT security laws that require “reasonable security features.”

Copyright © 2020 Godfrey & Kahn S.C.
For more articles on IoT, visit the National Law Review Communications, Media & Internet
section.

FDA in 2020: What a Year!

What a year for the Food and Drug Administration! FDA, an agency with regulatory oversight of 20-25% of products on which consumers spend, including food and medicines, but which typically stays out of the limelight, was thrust into the public eye amidst the COVID-19 pandemic. This was the year many Americans became familiar with lesser-known and niche policies like those governing emergency use authorizations (EUAs) and with the role of FDA in regulating laboratory developed tests (LDTs). The agency also took some flak for seeming to bow to political pressure in authorizing hydroxychloroquine for emergency use as a potential COVID-19 treatment, then rescinding the authorization, as well as for its less-than-accurate pronouncements of positive data concerning convalescent plasma treatment. These were reminders that the agency Americans trust to protect the public does get things wrong sometimes and is susceptible in some ways to political pressure, and that effectively ensuring the public health requires a balance between safety and effectiveness and patient access to medical products. As we look ahead, we eagerly anticipate how FDA will protect and promote public health in a Biden administration.

In this post we’ll explore the FDA’s device law and policy activities from 2020. A future post will cover drug and biologics law and policy.

COVID-19 Diagnostics

FDA and the Centers for Disease Control and Prevention (CDC) received a lot of mostly negative attention early in the COVID-19 pandemic for well-documented (including by us) missteps related to testing. Since then, there has been a significant increase in the number of tests authorized by FDA for point-of-care (POC) uses in various patient-care settings such as clinics, emergency departments, physicians’ offices, and outdoor or mobile COVID-19 testing sites. Additionally, some tests allow patients to collect samples at home, but those samples need to be sent to a lab for processing because there are no widely available FDA-authorized test kits to diagnose COVID-19 that can be used fully at home (i.e., for collection and processing). FDA did authorize a prescription test kit that allows for at-home collection and processing of samples to detect SARS-CoV-2 (the virus that causes COVID-19) in November 2020, but expectations are that it will not be available to the public until early 2021. And on December 9, the agency authorized the first non-prescription specimen collection kit, which the consumer then sends to a clinical lab for processing; should the lab’s testing results be positive or indeterminate, a physician contacts that consumer to advise him or her regarding next steps. Our prior posts go into great detail about the state of affairs of COVID-19 diagnostic testing; see here and here.

In addition to handling hundreds of EUAs relating to COVID-19 tests, FDA also developed a SARS-CoV-2 reference panel providing a standard baseline for test kit validation testing and began releasing performance testing results from manufacturers and clinical laboratories using the reference panel.

A key question remains: have COVID-19 testing capacity and capabilities advanced to the point of allowing the type of reopening of the country that many of us have desired since March? Sadly, our assessment is that while there have been impressive advances in COVID-19 diagnostic testing, we are still not seeing deployment of rapid, point-of-need tests that could be used at airports, stadia, or other public venues including many workplaces. Rather than testing, the Trump Administration’s focus has been on vaccines and other therapeutics.

Laboratory Developed Tests

In August 2020, the Department of Health and Human Services (HHS), in an unsigned statement posted on its website and not published in the Federal Register, barred FDA from requiring premarket review for any LDT, including those for COVID-19, unless FDA goes through formal rulemaking procedures. This was not terribly surprising because the Trump Administration’s posture toward regulating without clear authority (and sometimes even with it) had been well-understood as unwelcome. But the August action was simultaneously unsurprising and fairly insignificant because FDA had not been requiring LDT developers to submit their tests for premarket review and was deprioritizing review of EUA requests for COVID-19 LDTs in favor of traditional, kit-based in vitro diagnostics (IVDs) from commercial manufacturers.

Further, FDA has been a key partner to Congress and the laboratory community in designing a legislative framework for LDT oversight in recent years. That effort resulted in the introduction earlier this year of the Verifying Accurate and Leading-edge IVCT Development (VALID) Act, which we covered in prior posts, and which aims to reform the federal oversight regimes for both LDTs and IVDs. In November, the issue of FDA review of COVID-19 LDTs resurfaced again when HHS appeared to reverse itself by ordering FDA to review COVID-19 LDTs to assure that those tests could enjoy PREP Act protection.

From the events of this past year, it is clear that the regulatory framework and policies surrounding LDTs will be a prominent topic of debate in 2021. However, we expect there will be no quick resolution of these issues, either at a legislative or agency policy level, in the short term and that LDTs will likely remain in a gray area of FDA regulation and policy for the foreseeable future.

Digital Health

While COVID-19 is undoubtedly FDA’s top priority, the agency has taken actions to advance other policy and programmatic goals this year. In September, FDA announced the establishment of the Digital Health Center of Excellence, which is envisioned to be a multi-center effort for developing, coordinating, and implementing comprehensive, agency-wide digital health policies and programs. We explored this idea and noted some concerns in our previous post here. What’s important about this 2020 development is that, despite the current once-in-a-century public health emergency, FDA devoted what must be limited resources to laying the groundwork for the Digital Health Center of Excellence, suggesting that as we move into appropriations season and, perhaps more consequentially, the user fee negotiations, FDA will be prioritizing and seeking additional support for digital health.

510(k) & PMA Reform

In our 2019 year in review post for devices, we detailed significant proposed changes to the premarket notification (commonly known as “510(k)”) and premarket approval (PMA) pathways. With respect to 510(k)s, the optional Safety and Performance Based Pathway relies on comparisons of devices to criteria (like consensus standards) rather than the technological characteristics of a predicate device that is already on the market. The Safer Technologies Program builds on the Breakthrough Devices Program by enabling earlier and more frequent interactions with FDA for devices that may not meet the stringent breakthrough criteria, but which could still be beneficial for patients. FDA’s PMA proposal would allow a device to be marketed based on a demonstration of a reasonable assurance of safety only, with reasonable assurance of effectiveness needing to be demonstrated soon after marketing authorization (often referred to as “progressive” or “conditional” approval). This fairly substantial change to the PMA process would require Congress to amend the Federal Food, Drug, and Cosmetic Act.

Progress on implementing these proposals stalled due to the COVID-19 pandemic and two clouds now loom over them: the new administration and the question of which party will control the Senate. Senate Democrats have long been skeptical of FDA’s attempts to change the device regulatory model, fearing it is too industry-forward and lacks much-needed safety oversight. A new Biden-appointed FDA Commissioner may similarly be unenthusiastic about proposals that appear to make it easier to get products to market without thorough vetting. Pressure from a Democrat-controlled Congress on a Democratic administration would do little to help advance these proposals. FDA’s device program may, however, still benefit from a Democrat-controlled Senate in that Democrats may be more willing to fund the nascent National Evaluation System for health Technology (NEST), on which many of FDA’s plans for improved safety surveillance and premarket review rest. And we have yet to see the types of investments both Congress and industry will be making in the upcoming user fee reauthorization process.

Missed Deadlines

FDA’s Center for Devices and Radiological Health (CDRH), like other FDA organizational units, has statutory mandates, user fee commitments, and other self-imposed goals to meet, which include commitments to publish new regulations, make reports to Congress, draft or finalize guidance documents, and goals for completing premarket reviews for new medical devices. We have unfortunately seen CDRH miss some deadlines this year, which we hope is not a pattern of the center setting goals so lofty it cannot reasonably meet them, or of the center choosing to prioritize its own goals over those set by Congress.

For example, CDRH missed a statutory requirement in the 2017 Food and Drug Administration Reauthorization Act (FDARA) to issue a proposed regulation by August 2020 for over-the-counter (OTC) hearing aids. It has also repeatedly delayed publication of a draft guidance on the topic of medical device servicing and remanufacturing that has been on the priority guidance list since October 2018. The document appears on the FY 2021 priority guidance list as it did on the FY 2020 and FY 2019 lists, raising questions about whether it will actually be published this fiscal year. In addition, the center postponed a major guidance on clinical decision support software, which is also on the FY 2021 guidance priority list. CDRH also missed multiple deadlines over the past couple of years to issue a revised quality system regulation (QSR) that aligns with ISO 13485. While setting goals is, of course, the first step to achieving them, we wonder if FDA should take a (well-deserved, particularly in light of the extraordinary COVID-19 response effort) beat to catch up on some of these and other items before committing to more.

CDRH Director Jeff Shuren recently admitted that the diversion of FDA resources to processing EUA requests and creating policies and processes necessary to address the COVID-19 emergency did cause delays for many of the center’s other initiatives. Dr. Shuren has recently called for a reset in 2021 to refocus on CDRH’s priority projects, especially in the areas of digital health and 510(k) reform.

Stay tuned for our next post on FDA drug and biologics law and policy activities in 2020 and for more in 2021 on FDA activities related to COVID-19, user fees, and more.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
For more articles on the FDA, visit the National Law Review Administrative & Regulatory section.

New U.K. Competition Unit to Focus on Facebook and Google, and Protecting News Publishers

You know your company has tremendous market power when an agency is created just to watch you.

That’s practically what has happened in the U.K. where the Competition and Markets Authority (CMA) has increased oversight of ad-driven digital platforms, namely Facebook and Google, by establishing a dedicated Digital Markets Unit (DMU). While it was created to enforce new laws to govern any platform that dominates their respective market, when the new unit starts operating in April 2021 Facebook and Google will get its full attention.

The CMA says the intention of the unit is to “give consumers more choice and control over their data, help small businesses thrive, and ensure news outlets are not forced out by their bigger rivals.” While acknowledging the “huge benefits” these platforms offer businesses and society, helping people stay in touch and share creative content, and helping companies advertise their services, the CMA noted the growing concern that the concentration of market power among so few companies is hurting growth in the tech sector, reducing innovation and “potentially” having negative effects on their individual and business customers.

The CMA said a new code and the DMU will help ensure that the platforms are not forcing unfair terms on businesses, specifically mentioning “news publishers” and the goal of “helping enhance the sustainability of high-quality online journalism and news publishing.”

The unit will have the power to suspend, block and reverse the companies’ decisions, order them to comply with the law, and fine them.

The devil will be in the details of what the new code will require, and questions remain about what specific conduct the DMU will target and what actions it will take. Will it require the companies to pay license fees to publishers for presenting previews of their content? Will the unit reduce the user data the companies may access, something that would threaten their ad revenue? Will Facebook and Google have to share data with competitors? We will learn more when the code is drafted and when the DMU begins work in April.

Once again a European nation has taken the lead on the global stage to control the downsides of technologies and platforms that have transformed how people communicate and get their news, and how companies reach them to promote their products. With the U.S. deadlocked on so many policy matters, change in the U.S. appears most likely to come as the result of litigation, such as the Department of Justice’s suit against Google, the FTC’s anticipated suit against Facebook, and private antitrust actions brought by companies and individuals.

Edited by Tom Hagy for MoginRubin LLP.

© MoginRubin LLP
ARTICLE BY Mogin Rubin
For more articles on Google, visit the National Law Review  Communications, Media & Internet section,

You Took a PPP Loan. Now Get Ready to Talk About It.

Late on Tuesday, December 1, The U.S. Small Business Administration released detailed information about the borrowers who received loans from the federal government’s $659 billion Paycheck Protection and Economic Injury Disaster Loans Program.  The information released includes the names, precise amounts, addresses, industry codes, and lender information for the COVID-19 relief program’s roughly 5.2 million loans. The SBA had previously only released detailed information for loans above $150,000 and with dollar ranges rather than specified loan amounts.  A searchable database is located here.

Did your company, or perhaps one of your clients, apply for and accept a business loan from the Paycheck Protection Program (PPP) established by the US Federal government’s Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, nonprofit organizations and tribal businesses continue paying their workers ?  If so, you must be prepared to answer questions about your acceptance of that loan if asked about it.

We have two former journalists on our staff.  Thom Fladung, our managing partner, is the former managing editor of Detroit Free Press, The Plain Dealer and the Akron Beacon Journal.  Before coming to Hennes Communications, Howard Fencl ran TV newsrooms for more than 20 years.  Both agree that once the loan recipient information goes up on a searchable, public database, it will immediately become “low-hanging fruit,” with news editors sending reporters out to do follow-up stories about who took what, how much and why.

Frankly, we don’t have any problem with this disclosure.  The SBA routinely makes public information about the dollars loaned to small businesses, so why should PPP dollars, disbursed from the U.S. Treasury Department, be any different?

What’s different this time is the sheer size of the PPP program and the fact that an extraordinary number of companies and professional service firms – and their clients – received these “forgivable loans,” in some cases worth multi-millions of dollars, as did a wide variety of schools and other organizations with large endowments.

While there are scores of reasons – all 100% legal and ethical – why a law firm or other organization took a PPP loan, crisis management specialists know that optics often overshadow facts.  And it isn’t just reporters who will shine a spotlight on loan recipients.  Social media activists may also seek to highlight businesses and organizations in the community that received the dollars – with a direct or implied demand for justification.

If your company or client’s business applied for and accepted PPP dollars in good faith, you must be prepared to defend the loan if questioned by the media or other stakeholders – without looking defensive.

As our good friend, Richard Levick, has said repeatedly, “Use peacetime wisely.”  Levick recently suggested making sure you’re ready to answer such questions as:

  • Did you easily fall within the PPP guidelines or did you have to manipulate the rules to fit?
  • Exactly how was the money used?
  • Did you have access to other funds?
  • Specifically for schools, what has been your historic commitment to scholarships, diversity and economically disadvantaged students? What would the absence of PPP money mean for the future of these programs?
  • How do you currently support your community and the small businesses within it?

Levick further suggested that companies and organizations that come across more sympathetically in this equation will more easily deflect criticism than those who appear to have profited from this stimulus plan.

Now is the time to think about those optics, about how your partners, clients, employees, customers, friends – as well as traditional and social media outlets – are going to think when they find out how much you received.

We are not recommending spin.  We’re talking, instead, of the exact opposite – transparency. If you took the dollars, we’re suggesting the creation of clear, succinct, direct messages and talking points that answer the questions most likely to be asked.

Additionally, once these questions are asked, you’ll probably have just minutes to provide an answer to reporters who are on deadline or social media speculation that will increase by the moment.

© 2020 Hennes Communications. All rights reserved.
For more articles on the legal industry, visit the National Law Review Law Office Management section.

Judge Rules Against Another Attempt by Trump to Restrict Legal Immigration

The courts dealt another blow to the Trump administration’s continued efforts to restrict immigration this week, providing relief for companies looking to fill and retain critical positions with foreign talent. On Tuesday, the US District Court for the Northern District of California issued an order setting aside the US Department of Homeland Security (DHS) interim final rule, “Strengthening the H-1B Nonimmigrant Visa Classification Program”, and the U.S. Department of Labor (DOL) interim final rule, “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.”

Last month the Northern District Court of California also issued a preliminary injunction of Presidential Proclamation 10052, which would have added restrictions on temporary visa issuance.

Following last month’s preliminary injunction of Presidential Proclamation 10052’s restrictions on temporary visa issuance, wherein the presiding judge stated that Pres. Donald Trump is not a monarch, the US District Court for the Northern District of California has issued another blow to the Trump Administration.  The court issued an order Tuesday setting aside the US Department of Homeland Security (DHS) interim final rule, “Strengthening the H-1B Nonimmigrant Visa Classification Program”, and the U.S. Department of Labor (DOL) interim final rule, “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.”

The court found that the government failed to show good cause to excuse public notice and comment for the two rules.  The court recognized the contributions of immigrants concluding:

The COVID-19 pandemic has wreaked havoc on the nation’s health, and millions of Americans have been impacted financially by restrictions imposed on businesses, large and small, during the pandemic; the consequences of those restrictions has been a fiscal calamity for many individuals. However, “[t]he history of the United States is in part made of the stories, talents, and lasting contributions of those who crossed oceans and deserts to come here. The National Government has significant power to regulate immigration. With power comes responsibility, and the sound exercise of national power over immigration depends on the Nation’s meeting its responsibility to base its laws on a political will informed by searching, thoughtful, rational civic discourse.” Arizona v. United States, 567 U.S. 387, 416 (2012).

This is another victory for regulatory process compliance and supporters of employment-based immigration. The Plaintiffs, which include the Chamber of Commerce of the United States of America, National Association of Manufacturers, Bay Area Council, National Retail Federation, American Association of International Healthcare Recruitment, Presidents’ Alliance On Higher Education and Immigration; California Institute of Technology, Cornell University, The Board of Trustees of the Leland Stanford Junior University, University of Southern California, University of Rochester, University of Utah, and Arup Laboratories, filed a Complaint for Declaratory and Injunctive Relief from the DOL IFR effective Oct. 8 and the DHS IFR effective Dec. 7, claiming harm and prejudice to hundreds of thousands of American-based workers and disruption to US employers’ ability to hire and retain critical high-skilled talent. (Chamber of Commerce, et al., v. DHS, et al., 20-cv-07331-JSW, 10/19/20.)  Due to inflated salary requirements, employers would be forced to sever relationships with existing foreign national professionals as well as be precluded from hiring and sponsoring new candidates for temporary work and immigrant visas.

In advance of the Nov. 23 hearing, the presiding judge, the Honorable Jeffrey S. White published specific questions to determine whether the Defendants, the DOL and DHS, properly relied upon the good cause exception to the notice and comment period that is required before a new federal regulation can be implemented.  In the matter before the court, the Defendants took seven months to issue the IFRs that are the subject of this litigation, calling into question their claim that exigent circumstances precluded the need for a notice and comment period.

The DOL IFR at issue changed how prevailing wage levels are calculated resulting in higher wages at every wage level and occupation.  Overnight, entry level wages jumped from the 17th to the 45th percentile. So, for example, the annual salary of $58,802 allocated to a mechanical engineer position in Charleston, South Carolina on Oct. 7 increased to $91,749 overnight.

The DHS IFR among other things: would have revised the regulatory definition of and standards for an H-1B specialty occupation; added definitions for “worksite” and “third-party worksite”; revised the definition of “US employer”; clarified how US Citizenship and Immigration Services (USCIS) will determine whether an “employer-employee relationship” exists between the sponsoring employer and worker; limited the validity period of third-party placements to one year; and codified USCIS’ H-1B site visit authority as well as the consequences of refusing such a visit.

The Defendants are expected to appeal the ruling, although any subsequent decisions may not occur until after the Presidential inauguration.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.
For more articles on immigration, visit the National Law Review Immigration section.

Are Diversity Riders Legal?

Some venture capital firms have recently begun including so-called “diversity riders” in their term sheets.  In general, these require that the issuer and the lead investor make commercially reasonable efforts to include a member of an underrepresented community as an investor in the financing.  However well-intentioned the proponents of these clauses may be, the question arises whether they run afoul of state laws forbidding discrimination in private sector.

California’s Unruh Civil Rights Act, for example, provides:

” All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.”

Cal. Civ. Code § 51(b).   The question, of course, is whether an obligation to include particular persons based on sex, race, color etc. runs afoul of “full and equal” advantages.  Notably, the protection of the Act extends to “all persons” and is not confined to a limited class of protected persons.  The use of the word “all” and the phrase “every kind whatsoever” makes it clear that the phrase “business establishments” is to be interpreted in the broadest sense reasonably possible.

It is quite obvious that if an issuer or lead investor discriminates in favor of one class of persons, it is not treating all persons in a “full and equal” manner.  Further, discrimination in favor of one class of persons (however defined) necessarily involves discrimination against all persons who do not belong to that class.

© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP
For more articles on California Corporate Law, visit the National Law Review Corporate & Business Organizations section.