Tag: regulation

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.

Redesigned 2020 IRS Form W-4

The IRS has substantially redesigned the Form W-4 to be used beginning in 2020.

New employees first paid wages during 2020 must use the new redesigned Form W-4.  In addition, employees who worked for an employer before 2020 but are rehired during 2020 also must use the redesigned 2020 Form W-4.

Continuing employees who provided a Form W-4 before 2020 do not have to furnish the new Form W-4.  However, if a continuing employee who wants to adjust his/her withholding must use the redesigned Form.

IRS FAQs for Employers

The IRS has issued the following FAQs for employers about the redesigned 2020 Form W-4:

  • Are all employees required to furnish a new Form W-4?

No, employees who have furnished Form W-4 in any year before 2020 do not have to furnish a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently furnished Form W-4.

  • Are new employees first paid after 2019 required to use the redesigned form?

Yes, all new employees first paid after 2019 must use the redesigned form. Similarly, any other employee who wishes to adjust their withholding must use the redesigned form.

  • How do I treat new employees first paid after 2019 who do not furnish a Form W-4?

New employees first paid after 2019 who fail to furnish a Form W-4 will be treated as a single filer with no other adjustments.  This means that a single filer’s standard deduction with no other entries will be taken into account in determining withholding.  This treatment also generally applies to employees who previously worked for you who were rehired in 2020 and did not furnish a new Form W-4.

  • What about employees paid before 2020 who want to adjust withholding from their pay dated January 1, 2020, or later?

Employees must use the redesigned form.

  • May I ask all of my employees paid before 2020 to furnish new Forms W-4 using the redesigned version of the form?

Yes, you may ask, but as part of the request you should explain:

 »   they do not have to furnish a new Form W-4, and

 »   if they do not furnish a new Form W-4, withholding will continue based on a valid form previously furnished.

For those employees who furnished forms before 2020 and who do not furnish a new one after 2019, you must continue to withhold based on the forms previously furnished.  You may not treat employees as failing to furnish Forms W-4 if they don’t furnish a new Form W-4. Note that special rules apply to Forms W-4 claiming exemption from withholding.

  • Will there still be an adjustment for nonresident aliens?

Yes, the IRS will provide instructions in the 2020 Publication 15-T, Federal Income Tax Withholding Methods, on the additional amounts that should be added to wages to determine withholding for nonresident aliens. And nonresident alien employees should continue to follow the special instructions in Notice 1392 when completing their Forms W-4.

  • When can we start using the new 2020 Form W-4?

The new 2020 Form W-4 can be used with respect to wages to be paid in 2020.

Additional Information

This Publication includes the income tax withholding tables to be used by automated and manual payroll systems beginning in 2020 regarding both (i) Forms W-4 from 2019 or earlier AND (ii) Forms W-4 from 2020 or later.

  • IRS FAQs on the 2020 Form W-4

Jackson Lewis P.C. © 2020

More on IRS Forms & Regulations on the National Law Review Tax Law page.

Cryptocurrency is At The Center of Multi-Million Dollar Investment Security and Commodities Fraud

The Criminal Division of the IRS arrested Swedish businessman Roger Nils-Jonas Karlsson, for allegedly operating a fraudulent pension plan using cryptocurrency. Karlsson allegedly used fake websites “registered to a fictitious person” to advertise shares of a “Pre-Funded Reversed Pension Plan” (PFRPP). The criminal complaint states that Karlsson allegedly invited potential investors to buy shares of this plan at $98 per share. In exchange, Karlsson promised to eventually return 1.15 kilograms of gold per share to the shareholder as return on investment. In early 2019, 1.15 kilograms of gold was worth $45,000, making investors in the plan a 460 percent return for each share owned. The plan’s investors made payments using virtual currencies, also known as cryptocurrency. Bitcoin, Ethereum, and Litecoin prominent cryptocurrencies and were allegedly used to pay Karlsson. With the assistance of his company, Eastern Metal Securities, Karlsson allegedly defrauded victims into losing more than $11 million.

The U.S. Securities and Exchange Commission does not regulate cryptocurrencies, which are considered risky. The lack of regulation makes it sometimes impossible to get cryptocurrency refunded from fraudulent transactions because banks or government organizations do not guarantee these currencies. In cases where a company or individual commits securities or commodities fraud against the government, private citizens often play an essential role by acting as whistleblowers.

© 2019 by Tycko & Zavareei LLP

More on cryptocurrency enforcement actions via the National Law Review Criminal Law & Business Crimes page.

FWS Proposes New Conservation Measures in Advance of Potential Monarch Butterfly Listing

The Monarch Butterfly is a species of concern, but not currently “listed” as a threatened or endangered species under the Endangered Species Act. In advance of the potential, and some would say likely, listing of the Monarch Butterfly, the U.S. Fish and Wildlife Service (“FWS”) has published for public comment a program it hopes will attract landowners and developers in the butterfly’s anticipated habitat who wish to avoid future regulatory concerns related to the eventual listing of the butterfly. The program is available for public comments until June 14, 2019. More information on the program can be found here.

If accepted, non-federal landowners can voluntarily agree to undertake land management activities to support the conservation of the butterfly in exchange for assurances that no additional conservation measures or land, water, or resource use restrictions will be imposed under the Endangered Species Act. Benefits of this voluntary program include incidental take authorization should the butterfly become a listed species and positive public relations.

Examples of the proposed conservation measures include:

  1. Establishing and using native seed mixes containing a diversity of wildflowers including milk weed,

  2. Minimizing use of grazing in monarch habitat during peak breeding and migration periods,

  3. Removing woody plants in densely covered shrub areas and invasive plant species to promote grassland habitats,

  4. Sustaining idle lands with suitable habitat, and

  5. Using conservation mowing to enhance floral resources and habitat.

Please note the agreement includes activities supporting the operations of existing rights of ways and associated lands but not the construction of new pipelines.

 

© Steptoe & Johnson PLLC. All Rights Reserved.
This post was written by Laura M. Goldfarb of Steptoe & Johnson PLLC.
Read more Environmental news on our environmental type of law page.

CBD Risk Management

Advising companies on CBD (cannabidiol) risk management is made challenging by the rapid pace of developments and frequent confusion caused by often false or misleading online information. This article attempts to provide a concise analysis of critical CBD legal and risk management issues.

Do Not Conflate “Legality” under the 2018 Farm Bill with U.S. Food and Drug Laws

The 2018 Farm Bill, which was signed in to law in December 2018, exempts hemp and hemp-derived products, including hemp-derived CBD, from the Controlled Substances Act (CSA). In the lead-up to passage of the Farm Bill, there was widespread confusion in the public as to the extent of the “legality” of hemp-derived CBD, with many commentators and even some legal experts conflating legality under the CSA with legality under the Food Drug and Cosmetics Act (FDCA) and state food and drug laws. This confusion prompted former FDA Commissioner Scott Gottlieb to issue a public statement clarifying that Congress had explicitly preserved the FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the FDCA, regardless of whether they are derived from cannabis or hemp. 

Identify How the CBD Product Will Be Defined under the FDCA

A product containing a cannabinoid could be considered a drug, food, food additive, dietary supplement or cosmetic depending on how the product is marketed and sold. How aggressively these products are policed by FDA and state agencies depends on the nature of the product and how it is defined under the FDCA and state law.

CBD as “Food” or “Dietary Supplement”

FDA’s position since at least 2015 is that certain cannabinoids, including CBD, are impermissible additives that adulterate food and dietary supplements for both humans and animals. Under the FDCA’s drug exclusion rule, once a substance that was never previously in the food supply is (1) an active ingredient of an approved drug product or (2) an active ingredient of a product in clinical trials that have been made public, a food or supplement containing that substance cannot be shipped in interstate commerce. FDA has cited Epidiolex® as an example of a clinical investigation regarding CBD that has been made public. Epidiolex was approved by FDA in June 2018 for treatment of childhood seizures associated with two rare forms of epilepsy. FDA has therefore concluded that CBD products are in fact drugs and require FDA approval under the FDCA. The new drug-approval process is exorbitantly expensive; in 2016, the Journal of Health Economics estimated the average cost per approved drug at well over $1 billion.

CBD as a “Cosmetic”

Cosmetics are generally less heavily regulated by FDA than food or drugs, and until recently the agency has remained silent on the use of CBD in cosmetic products. On April 2, 2019, FDA provided much-needed insight, stating that although certain cosmetic ingredients are prohibited or restricted by regulation, “currently that is not the case for any cannabis or cannabis-derived ingredients.” However, FDA warned that no ingredient − including cannabis-derived ingredients – can be used in a cosmetic if “it causes the product to be adulterated or misbranded.” A cosmetic may be considered adulterated “if it bears or contains any poisonous or deleterious substance which may render it injurious to users under the conditions of use prescribed in the labeling.” FDA cautions that a product may be considered both a cosmetic and a drug, even if it affects the appearance, if it is “intended to affect the structure or function of the body, or to diagnose, cure, mitigate, treat or prevent disease.”

Several large national retailers, including CVS, Walgreens and Rite-Aid, recently announced they will begin selling CBD-infused cosmetics in certain stores.

FDA Currently Uses “Enforcement Discretion”

Other than issuing letters to companies that sell CBD-infused oils and food products warning them to refrain from making impermissible health claims, FDA has to date taken no other visible enforcement action in that regard. Former FDA Commissioner Scott Gottlieb recently testified before a Senate appropriations subcommittee that “we are using enforcement discretion right now,” and that “I will take enforcement action against CBD products that are on the market if manufacturers are making what I consider over the line claims.” This would certainly include the egregious health claims at issue in the recent warning letters, such as that CBD can cure cancer or prevent Alzheimer’s disease. Gottlieb nevertheless acknowledged that FDA has not taken action against numerous products on the market given its enforcement priorities and limited resources. He cautioned, however, that FDA’s lack of enforcement is “not an invitation for people to continue marketing these products.”

State Enforcement of CBD

Authorities in several states have stepped up enforcement actions, including unannounced inspections and CBD product embargos ordered by authorities in California, New York, Texas and other states. Several states and cities, including California, Maine, North Carolina, Ohio and New York City, have banned CBD-infused food products under state and local laws.

Notwithstanding this state-led crackdown, certain states are working to provide greater legal access to CBD products under state law. Lawmakers in California and Texas, for example, are working on bipartisan legislation to allow sales of CBD products in those states, notwithstanding FDA’s prohibition.

CBD’s Pathway to Legality

As a result of significant pressure by industry groups and members of Congress, FDA has signaled a willingness to consider a potential easing of restrictions on CBD. On April 2, 2019, FDA issued a press release that announced new steps for advancing the potential regulatory pathways for CBD products. The press release explains that FDA primarily is concerned that permitting widespread commercial availability of CBD products negatively impacts research that may otherwise be performed to support regulatory approval through FDA’s drug review process. Similarly, FDA does not want to incentivize patients to forgo appropriate medical treatment by substituting unapproved products for FDA-approved medicines. Also of concern is the potential for liver injury and cumulative exposure to CBD if accessed by consumers across a range of products.

Notwithstanding the intense pressure on FDA to fast-track the CBD approval process, without congressional action that exempts CBD from FDA’s regular rulemaking process, it is likely that the approval process for use of CBD in foods or supplements will take years. In Gottlieb’s recent Senate testimony, he explained that “we don’t have a clear route to allow [CBD] to be lawfully marketed short of promulgating new regulations.” He noted, however, that there is precedent for Congress to issue legislation in the context of a single ingredient, similar to prior legislation for human growth hormone. Gottlieb also has appeared to embrace the idea of legislation that classifies CBD according to defined concentration levels, whereby CBD would be classified as a dietary supplement up to a defined concentration threshold, above which it would be considered a pharmaceutical drug. This is similar to the way fish oil has been regulated.

A public hearing scheduled to take place on May 31, 2019, will cover a range of CBD-related topics, including (1) health and safety, (2) manufacturing and product quality and (3) marketing/labeling/sales. FDA is encouraging public comments and participation at the hearing.

Acting FDA Commissioner Ned Sharpless is now leading the agency. Some have expressed concern over how Sharpless will approach CBD because he is a former cancer drug researcher who has less experience with the dietary supplement and food regulation side of FDA’s mandate. According to a recent interview with former associate FDA Commissioner Peter Pitts, Sharpless is expected to manage the process already in place with respect to CBD for the time being.  How much attention Sharpless will give to CBD issues in the future “depends on the priorities and the new commissioner’s stomach for battle.”

CBD Risk Management … in the Meantime

Until the legal pathway for CBD is clear, companies that market most CBD products must tread carefully. Some, such as the large national retailers that recently announced the sale of CBD products, are focused on safer cosmetic products. Others choose to market and sell CBD-infused foods and supplements based on a higher appetite for risk and a “safety in numbers” assessment in the face of no visible FDA enforcement.

No matter how a company chooses to participate in the CBD industry, it must be counseled on FDA regulatory risk based on the product type in addition to the risks of marketing and selling CBD products on a state-by-state basis. Because the legality of CBD products varies widely by state and is changing so rapidly, providing accurate counsel can be a challenge. In addition, CBD product labels must be carefully reviewed for compliance under both federal and state law. Some states have specific and onerous labeling requirements for CBD products.

Although many companies tend to downplay the risk and potential financial severity of regulatory enforcement by federal or state agencies when it comes to CBD, they ignore at their own peril the risk presented by potential civil tort exposure. CBD products may be considered adulterated, contaminated or mislabeled under federal and state law. This may give rise to financially ruinous lawsuits, including consumer class actions or competitor suits that allege false advertising or unfair competition under state consumer protection statutes. It is essential for every CBD company to have a solid grasp of both the CBD regulatory risks and the unfair competition laws to fairly compete in the new CBD marketplace, and to avoid unwittingly being named as a defendant in an expensive and potentially company-ending lawsuit.

To this end, it also is important for any company that markets and sells CBD products to conduct an insurance coverage review with an attorney and broker that understand the nuances of the CBD insurance market. With passage of the 2018 Farm Bill, insurance coverage for hemp-derived products, including CBD, is expanding rapidly. Problematic endorsements and exclusions remain, however, with respect to limitations on coverage as a result of regulatory penalties, product seizures, resulting business interruption and tort damages premised on violations of law.

Most importantly, CBD risk management requires constant education and vigilance to stay abreast of an area of the law changing more rapidly than any other in recent history.

 

© 2019 Wilson Elser
This post was written by Ian A. Stewart of Wilson Elser. 
Read more on marijuana and CBD policy on the National Law Review’s Biotech page.

PFAS — What’s all the Fuss?

Recently, per- and polyfluoroalkyl substances (PFAS) have been the subject of much publicity, major ongoing litigation over alleged personal injury and property damage, and statutory and regulatory action. In Massachusetts and New Hampshire, contamination incidents, lawsuits, and concerns over drinking water impacts have led to proposals for adoption of extremely low (parts per trillion) drinking water guidelines or enforceable standards. Nationally, although there are drinking water “advisories,” the U.S. Environmental Protection Agency (EPA) is considering whether to start rulemaking to identify PFAS as “hazardous substances” under the federal Superfund law, and whether to adopt enforceable maximum contaminant levels as national drinking water standards.

What’s all the fuss? Although manufacturers stopped making two of the most well-known PFAS (PFOA and PFOS) over a decade ago, PFAS are a category of substances that includes hundreds of compounds, and a number of them appear to have toxic effects. PFAS had – and continue to have – a variety of uses in a multitude of products, and therefore have been manufactured or used (and sometimes released) at a large number of facilities. Commercial products have included, among others, cookware, food packaging, personal care products, and stain resistant chemicals for apparel and carpets. Industrial and commercial uses included photo imaging, metal plating, semiconductor coatings, firefighting aqueous film-forming foam, car wash solutions, and rubber and plastics. As a result, PFAS are present in the environment, and have been detected in certain drinking water systems. Further, PFAS are still being manufactured and used, but discharge of PFAS in air and water typically have not been regulated. PFAS also are highly mobile and highly persistent in the environment, and, therefore, will be present for scores of years.

Although the toxicological risks for many PFAS have not yet been determined with confidence, PFOA and PFOS have been tested fairly extensively. Manufacturers point out that not all PFAS have the same chemical structures and toxicity. Nevertheless, the Conservation Law Foundation and other environmental advocates are petitioning for regulation of the entire class.

Because PFAS haven’t yet fallen under most federal regulatory schemes, many states have been “filling the gap” with guidance and regulatory action. In Maine, PFAS are already the subject of guidance and regulations by the Maine Department of Environmental Protection (DEP). The most recent DEP Remedial Action Guidelines (RAGs, 2018) for PFOA, PFOS, and PFBS issued by Maine include:

  • Soil RAGs as low as 0.0095 ppm
  • Groundwater residential use RAG as low as 0.40 ppb
  • Fish tissue guidelines for recreational anglers as low as 0.052 ppm

And under DEP Chapter 418, Screening Levels for Beneficial Use have been set for certain PFAS as low as 0.0025 ppm.

It is clear there will be more regulation and legislation at federal and state levels. Further, litigation has commenced in a number of states (including Maine) for perceived or real damages from PFAS contamination under negligence and other tort theories.

What to do? Depending on where you sit, here are a few actions to consider.

  • If you are unsure whether you use PFAS, a limited review of safety data sheets may identify PFAS chemicals.
  • Determine if you stored, used, or currently use PFAS, and consider the potential toxicity of the specific compounds and potential impact of potential regulations.
  • If you stored or used PFAS in the past, consider whether there were potential releases or residuals that could pose health risks or liability risks.
  • If you are considering purchasing a business or real property, consider whether PFAS may have been used or released on site, and the potential risk and liability issues. Note that because PFAS are not federal “hazardous substances” they are not within the scope of the standard Phase I Environmental Site Assessment.
  • If you generate or ship wastes that may contain PFAS, consider voluntary testing and the possibility that testing may soon be requested or required.
  • If you use groundwater as drinking water or for production use, consider whether PFAS may be present from historic or recent uses.
  • Keep posted on national and state regulatory and legislative developments.
©2019 Pierce Atwood LLP. All rights reserved.
This post was written by Kenneth F. Gray and Thomas R. Doyle of Pierce Atwood LLP.

Lapse in Government Funding Continues to Affect FDA, USDA

As previously covered on this blog, without either a fiscal year 2019 appropriation or a Continuing Resolution, a partial government shutdown, which began on December 22, 2018, has continued to impact both the U.S. Department of Agriculture and the U.S. Food and Drug Administration. As of the time of this blog’s publication, the government has been partially shut down for over 20 days.

Most recently, in a Twitter thread, FDA Commissioner Scott Gottlieb noted that the agency stopped a limited number of domestic food inspections because of the shutdown, but the agency is, “taking steps to expand the scope of food safety surveillance inspections we’re doing during the shutdown to make sure we continue inspecting high risk food facilities.” Several commodities are deemed “high risk” and include: seafood, soft cheeses, fresh fruits and vegetables, spices, shell eggs, infant formula and medical foods. Gottlieb noted that the mechanism to expand the domestic inspections will be in place beginning the week of January 14.

As for the USDA, Senator Debbie Stabenow submitted a letter to the Secretary of Agriculture on January 9 requesting information on the impact that the shutdown is having on the agency, including the delay in implementing the recently-passed Farm Bill. As of the time of this publication, the Secretary has yet to respond. USDA put out a press release at the end of 2018 regarding activities that would be affected by the shutdown, but the department has not updated it since that time.

 

© 2019 Keller and Heckman LLP.
This post was contributed by Food and Drug Law at Keller and Heckman.
For more legal news on the Food and Drug Administration check out the National Law Review’s Biotech Food and Drug Type of law page.

Department of Education Unveils Proposed Title IX Regulations

On Friday, November 16, 2018, the Department of Education (DOE) released proposed Title IX regulations dictating the process by which colleges and universities must handle allegations of sexual misconduct.

Institutions of higher education have been in limbo since September 2017 when the DOE rescinded Obama-era guidance that called for hard-hitting enforcement of Title IX and issued interim guidance as a placeholder until they could engage in the formal rulemaking process. Today’s proposed regulations, if enacted, will take the place of the DOE’s September 2017 interim guidance.  According to the DOE, the new regulations would substantially decrease the number of investigations into complaints of sexual misconduct and save institutions millions over the next decade.

Many of the new regulations deviate significantly from prior guidance. The most significant changes increase the discretion given to universities in crafting procedures for adjudicating Title IX claims within their institutions.  The proposed guidance allows universities to choose the applicable evidentiary standard (either “preponderance of the evidence” or “clear and convincing evidence”) in determining responsibility, as long as it is consistent with the standard used in other student disciplinary matters.  The new regulations also permit the use of informal resolution processes to resolve sexual misconduct allegations if the parties agree.

Other notable provisions of the proposed regulations include the following:

  • The definition of “sexual harassment” has been more narrowly defined as “unwelcome conduct on the basis of sex that is so severe, pervasive and objectively offensive that it denies a person access to the school’s education program or activity.”
  • For purposes of administrative enforcement, universities would be held to a “deliberately indifferent” standard. In other words, to avoid liability, a university with “actual knowledge” of sexual harassment need only respond in a manner that is not “deliberately indifferent.” An institution would be found deliberately indifferent “only if its response to sexual harassment is clearly unreasonable in light of the known circumstances.”
  • “Actual knowledge” is defined in the proposed regulations as notice of sexual harassment or allegations of sexual harassment provided to an official of the institution “who has the authority to institute corrective measures on behalf of the [institution].” In contrast to prior guidance, this definition excludes most professors, administrators, and staff.
  • Under the proposed regulations, universities would no longer be allowed to investigate allegations of sexual harassment that occurred off-campus.
  • The proposed regulations would require universities to provide written notice to a respondent upon receipt of a complaint, which would include a statement that the responding party is presumed to be not responsible for the alleged conduct and that a determination of responsibility will be made at the end of the grievance process.
  • Live fact-finding hearings would be mandatory for universities under the new regulations. Investigators would also be precluded from serving as factfinders.  This would eliminate the use of the single investigator model currently used by many universities.
  • Universities must permit cross-examination of any party or witness by the opposing party’s advisor, but not by the party him/herself.  If a party or witness refuses to submit to cross-examination, that person’s testimony could not be relied on by the fact-finder. The party’s choice of advisor could not be limited by the institution of higher education.
  • Religious institutions of higher education would no longer be required to seek assurances of exemption from Title IX regulations in advance of a DOE investigation. Under the new regulations, a religious institution of higher education could invoke an exemption to Title IX’s requirements at any time during the investigation.

The new regulations address other topics such as constitutional issues and the intersection between Title IX and Title VII of the Civil Rights Act. They also clarify that, just as an institution’s treatment of a complaining party may constitute discrimination based on sex, an institution’s treatment of the responding party may also constitute discrimination based on sex. Institutions of higher education must continue to comply with all applicable state laws regarding sexual misconduct and sexual misconduct investigations.

Now that the proposed regulations have been published, the public has sixty days to submit comments before the regulations go into effect. The final regulations, however, are likely to closely mirror what has been proposed today, and colleges and universities should act immediately to carefully review their sexual misconduct policies and practices for compliance.

 

Jackson Lewis P.C. © 2018
This post was written by Susan D. Friedfel, Monica H. Khetarpal Marla N. Presley Crystal L. Tyler and Hobart J. Webster.

Army Corps of Engineers Issues Draft Guidance on Section 408 Permission Requests, Solicits Comments

On January 23,  2018, the United States Army Corps of Engineers (Corps) issued Draft Engineering Circular (EC) 1165-2-220, Policy and Procedural Guidance for Processing Requests to Alter U.S. Army Corps of Engineers Civil Works Projects Pursuant to 33 U.S.C. § 408 (Draft EC).  Comments on the draft circular are due March 7th, but there are reports that the comment deadline may be extended to April 6th.

The Draft EC,  once finalized, will replace existing guidance on the permission process required by Section 14 of the Rivers and Harbors Act of 1899, as amended and codified in 33 U.S.C. § 408 (Section 408).  The Draft EC consolidates existing guidance on Section 408 permissions and makes numerous changes to the existing guidance, including revising the test for when a Section 408 permission will be required, announcing general terms and standards that will be applied to all Section 408 permissions, and prescribing new timeframes for the Section 408 review process.  The comment period provides an opportunity for entities that need Section 408 permissions to address specific concerns with the Section 408 process and to advise the Corps on how to better streamline the Section 408 process.

Background

Section 408 requires that any proposed occupation or use of an existing Corps civil works project be authorized by the Secretary of the Army.  Examples of civil works projects include levees, dams, sea walls, bulkheads, jetties, dikes, wharfs, piers, and wetland restoration projects funded by or built by the Corps.  The Corps may grant such permission if it determines the alteration proposed will not be “injurious to the public interest” and “will not impair the usefulness” of the civil works project.  Under Corps policy, a Section 408 permission will not be issued before decisions on Clean Water Act Section 404 permits and Rivers and Harbors Act Section 10 permits are made.

Section 408 review may be required in a wide variety of situations.  For example, a Section 408 permission was required for the Dakota Access Pipeline, a crude oil pipeline, to cross 2.83 miles of federal flowage easements and approximately 0.21 miles of federally-owned property.  In addition, Section 408 review may be required where the Corps’ only connection to the project is funding, such as a wetland restoration project.

Section 408 permissions have become a significant issue in recent years because they have the potential to significantly delay projects.  The Corps has limited capacity to review Section 408 permission requests because such requests are not handled by the Corps’ regulatory program.  In the event that a Section 408 permission is required, the Corps may not have the staff resources to review the request unless the applicant pays for such a review.  Under the authority of Section 214 of the Water Resources and Development Act (WRDA) of 2000, the Corps may accept funds from non-Federal public entities to expedite the review and evaluation of a Section 408 request.  Under the 2016 WRDA, funding privileges were extended to certain private entities.  It should be noted that the recent Presidential “infrastructure legislative outline” that was released on January 12, 2018 along with the President’s budget would allow any non-federal entity to pay for expedited review and evaluation of a Section 408 request.

The Corps previously issued EC 1165-2-216 in 2014 on Section 408 permissions and since that time has issued a number of interim memoranda to improve the Section 408 permission process.  The Draft EC, once finalized, will replace EC 1165-2-216 as well as all interim memoranda, and will be effective for two years.

Proposed Changes to Section 408 Permission Process

Key changes proposed under the Draft EC include the following:

Program Governance Changes.  The Draft EC updates the Section 408 program governance.  It commits the Corps to conduct an internal audit of its decisions to examine whether Section 408 is being implemented consistently.  It provides for the creation of a database, which will be partially available to the public, as a tool for requestors to be informed about the status of their requests.

Section 408 Applicability Changes.  The Draft EC clarifies the geographical limitations on the applicability of the Section 408 permission process.  The Section 408 process applies to the lands and real property interests identified and acquired for a Corps project.  The Draft EC clarifies that, within navigable waters, the Section 408 process applies to alterations proposed to submerged lands and waters occupied or used by a Corps project.  The Draft EC process may be applied to alterations proposed in the vicinity of a Corps project that occur on or in submerged lands and waters that are subject to the navigation servitude.

The Draft EC clarifies how emergency situations should be addressed under Section 408.  Emergency alterations performed on a Corps project pursuant to Public Law (PL) 84-99 do not require a Section 408 permission, but urgent alterations that do not fit within the definition of emergency under PL 84-99 may require a Section 408 permission.  PL 84-99 authorizes the Corps to undertake activities, including disaster preparedness, “advance measures” to prevent or reduce flood damage from imminent threat of unusual flooding, emergency operations, rehabilitation of flood control works threatened or destroyed by flood, protection or repair of federally authorized shore protective works threatened or damaged by coastal storm, and provisions of emergency water due to drought or contaminated source.  The Draft EC indicates that when an alteration cannot be performed pursuant to PL 84-99, Corps districts can reprioritize and expedite reviews as appropriate given the urgency required for each specific situation.

The Draft EC identifies certain activities that will not require a Section 408 permission.  As under the existing guidance, non-federal sponsor activities that are included in an operation and maintenance (O&M) manual for the project do not require Section 408 permission.  The Draft EC also provides that a Section 408 permission is not required if a non-federal sponsor is performing activities on a Corps project that restores such project to the physical dimensions and design of the constructed project.  Although a Section 408 permission will not be required, the project sponsor may still need to coordinate with the Corps.  In addition, under the Draft EC, a Section 408 permission is not required for geotechnical explorations that comply with the Corps’ drilling requirements.

The Draft EC recognizes that the requirements of Section 408 may be fulfilled by another process.  For example, where a project requires a real estate outgrant—an authorization of the use of real property managed by the Corps—or a Rivers and Harbors Act of 1899 Section 10 permit that covers the same scope and jurisdiction as a Section 408 permission, a separate Section 408 permission is not required.  What is not addressed in the Draft EC is whether a Section 408 permission will be required to conduct O&M on a non-Corps project for which a Section 10 was previously issued.

Procedural Changes.  The Draft EC identifies new procedures for seeking a Section 408 permission.  Under the existing guidance, there are two options for review under Section 408—a single-phase review and a categorical review.  In a single-phase review, all information for a Section 408 permission is submitted at the same time.  In a categorical review, the Corps performs an analysis of impacts and environmental compliance in advance for a common category of activities.  When a Section 408 permission request meets the criteria of the categorical permission, the Section 408 permission may be granted under a simplified validation process.  To add flexibility, particularly for projects that involve multiple stages of engineering or construction, the new guidance allows for a multi-phased review.  The Draft EC also removes the requirement that plans and specifications be, at a minimum, 60% complete to initiate the Section 408 review process.

The Draft EC incorporates new timelines for a Section 408 review that are provided in the 2016 WRDA.  When a Corps district receives a Section 408 request, the district must respond within 30 days, informing the requestor that the submission was complete or specifying what additional information is required.  The Draft EC does not speak to the Corps’ failure to respond within 30 days.  If a completeness determination is made, the Corps district has 90 days to render a decision.  If the district cannot meet the 90 day timeline, it can provide an estimated date of a final decision.  If that estimate extends beyond 120 days, the Corps must provide congressional reporting.

Click here for a side-by-side chart comparing the Draft EC to the legislative provision on Section 408 developed by our firm’s Corps Reform Working Group and the legislative provisions on Section 408 that are contained in the President’s “infrastructure legislative outline”.

 

© 2018 Van Ness Feldman LLP
This post was written by Jenna R. Mandell-Rice and Brent Carson of Van Ness Feldman LLP.

A short United States Department of Justice memorandum with big legal consequences

On Jan. 25, 2018, the United States Department of Justice (U.S. DOJ) issued a memorandum limiting the use of federal agency guidance documents in civil enforcement actions that could have far reaching consequences in the private sector. See here.

Under the directives contained in this memorandum, U.S. DOJ attorneys are instructed not to use noncompliance with federal agency guidance documents that have not gone through formal rule-making under the Administrative Procedures Act as evidence of violations of applicable law in federal civil enforcement actions. In particular, the U.S. DOJ instructs its attorneys that they may not use a private party’s noncompliance with an agency guidance document for presumptively or conclusively establishing that a party violated an applicable statute or rule that an agency has delegated authority to implement. The memorandum continues by saying “[t]hat a party fails to comply with agency guidance expanding upon statutory or regulatory requirements does not mean that the party violated those underlying legal requirements; agency guidance documents cannot create any additional legal obligations.”

In the past, federal agency guidance policy has been used by agencies as well as the U.S. Department of Justice as evidence of whether a regulated party has complied with federal statutes. For example, this use of guidance policies for enforcement decision has been regularly used by numerous federal agencies, such as the EPA, OSHA, SEC, Labor, the Treasury, FTC and many other federal agencies, in referring matters to the U.S. DOJ for enforcement of the federal statutes and regulations that these agencies have delegated authority to administer.

The U.S. DOJ memorandum will provide creative lawyers with new ammunition for negotiation with federal agencies when those agencies use noncompliance with their guidance as evidence of violations of laws that carry significant civil penalties for such actions. In addition, these same creative lawyers in the private sector will use the memorandum as evidence that a federal agency should not use guidance documents as evidence for important agency decision making such as permit decision making or related important agency decisions that have important consequences for the regulated community.

 

Copyright © 2018 Godfrey & Kahn S.C.
This post was written by Arthur J. Harrington of Godfrey & Kahn S.C.
Read more of the National Law Review’s  Coverage of Government Regulations.