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NCSL Updates
NCSL Policy Submission Deadline Approaching
July 8 is the deadline to submit all new policy directives and resolutions for consideration at the NCSL Legislative Summit in Louisville, Ky., Aug. 5-7. Read more
Administration Updates
Medicare Enrollees to See Temporary Cost Savings on 64 Prescription Drugs
The Department of Health and Human Services announced on June 26 a temporary cost savings on 64 prescription drugs for Medicare enrollees. From July 1-Sept. 30, Medicare Part B enrollees will pay 20% of the inflation-adjusted amount-meaning they will pay a lower coinsurance payment-for those medications. An estimated 750,000 beneficiaries will see savings over the next three months.
Part of the Inflation Reduction Act of 2022, the Prescription Drug Inflation Rebate Program established that drug manufacturers who raise the prices on single-source medications and biologicals for Medicare Part B faster than the rate of inflation will be required to pay a rebate. The same is true for certain single-source medications and biologicals with Medicare Part D. The rebates will be managed by the Centers for Medicare & Medicaid Services and deposited into the Medicare Trust Fund. All rebate and invoicing information is public and can be found on the CMS website.
These temporary coinsurance adjustments are not the first changes Medicare recipients have seen because of the Inflation Reduction Act. In 2023, monthly out-of-pocket costs for Part D enrollees were reduced to $35 or less. Earlier this year, the Medicare Extra Help program was started to help qualifying seniors pay for premiums, deductibles and coinsurance. Also this year, Medicare Part D out-of-pocket costs were capped at $3,500-an amount that drops to $2,500 in 2025.
For the first time in the program's history, Medicare can negotiate prescription drug prices with pharmaceutical companies. Read more
New Hazardous Material Rail Transportation Rule
The new rule is designed to protect first responders and assist them with appropriately addressing hazardous spills immediately after a train derailment. The rule comes after the 2023 train derailment in East Palestine, Ohio, and is intended to improve emergency response by mandating that rail companies develop physical and electronic documentation on the hazardous material being transported. Required information includes the type of material, including the amount and where it is located on the train, the train's origin and destination and a designated railroad company emergency point of contact. The new rule requires railroad companies to proactively provide this information after a derailment to first responders via a 911 call center or the AskRail app, which launched in 2014 and was developed by the emergency response community and all North American Class I railroads. These emergency response plans must be tested at least once a year, according to the rule. Read more
New Amnesty Plan to Shield Undocumented Spouses of US Citizens
The Biden administration announced on June 18 an expansion of the Deferred Action for Childhood Arrivals parole program. The expansion will allow undocumented immigrants married to U.S. citizens to stay in the country and apply for work authorization. About half a million immigrant spouses would be eligible for this parole expansion as well as 50,000 noncitizen children. Read more
USDA Rule Would Clarify Practices in Livestock and Poultry Markets
The proposed rule, if enacted, would allow farmers and ranchers to take legal action against large food and agriculture companies if their individual operations are harmed by deceptive contracts, retaliation or other unfair business practices. Currently, farmers and ranchers must show harm to the entire marketplace to take action in court against companies for these practices. The proposal, which is a part of the Department of Agriculture's antimonopoly agenda, is intended to strengthen the protections of producers under the Packers and Stockyards Act. Other recent department efforts to strengthen this act include a final rule to improve poultry contract transparency between producers and companies and a final rule to improve antidiscrimination protections for farmers on the basis of discrete identity or cooperative membership. Legal challenges to these rules are expected. Read more
DOT Awards $1.8B in RAISE Grants
The awards will fund 148 transportation-related projects. The funding comes from the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) program, which includes infrastructure, transit, rail, harbor and aviation projects, with some specifically addressing resiliency and new networks and equipment. The Department of Transportation indicated the funding will be split about equally between projects in rural and urban areas. The department received over $13 billion in funding requests for the available $1.8 billion. Read more
Court Updates
Courts Block Key Components of Federal Student Loan Repayment Plan
A federal court ruling blocked the administration from using its recently implemented income-driven repayment program, known as the Saving on a Valuable Education (SAVE) plan, to discharge student loan balances. A separate federal court ruling blocked the administration from implementing a component of the SAVE plan that would lower an undergraduate's monthly payment rate from 10% to 5% of their discretionary income. The lower monthly payment rate was set to go into effect on July 1. The Biden administration has said it will appeal both rulings. Read more
Supreme Court Throws Out Chevron Decision
The U.S. Supreme Court has overturned a 40-year-old precedent that directed courts to defer to federal agencies' interpretations of ambiguous laws.
In Loper Bright Enterprises v. Raimondo, a 6-3 decision by Chief Justice John Roberts overruled the 1984 case of Chevron U.S.A. v. Natural Resources Defense Council. Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson dissented. The question before the court focused on the so-called Chevron deference, an administrative law concept that says courts should defer to a federal agency's reasonable interpretation of an ambiguous statute.
The court's holding relies on the Administrative Procedure Act, a 1940s statute that Congress passed to keep unelected federal agencies from overstepping their statutory mandate. Roberts wrote that the "Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled." The court said that the Chevron doctrine cannot be reconciled with the APA and rejected the notion that "statutory ambiguities are implicit delegations to agencies."
The Loper case involved the Magnuson-Stevens Fishery Conservation and Management Act, which Congress passed in 1976 after determining that overfishing off the U.S. coasts threatened the "food supply, economy and health of the Nation." The statute directs the secretary of commerce and the National Marine Fisheries Service to develop a comprehensive fishery management program.
Pursuant to the act, the fisheries service required the Atlantic herring fishery to adopt an industry-funded monitoring program. A group of herring fishing companies, led by main plaintiff Loper Bright Enterprises of New Jersey, filed suit to challenge the service's rule as too expensive and overly burdensome, alleging they had very limited vessel space and financial resources. They said the service exceeded its statutory authority because the act does not specifically state that industry may be required to pay for the monitoring program, and asked the courts to overrule Chevron, or hold that where a statute does not expressly provide for the specific power exercised by the agency, no statutory ambiguity exists, and no agency deference should be provided.
The lower courts ruled in favor of the agency. Seventeen states filed an amicus brief in support of the herring fishing companies, stating that historically, courts have applied Chevron inconsistently, and "(t)he confused status quo has real costs for the people who live and work within our borders. … Regulation is costly; over-regulation and mercurial regulation even more so. Waiting longer to intervene forces painful tradeoffs, and they hurt the states and our residents."
A majority of the justices agreed with the states and reasoned that courts, not agencies decide "all relevant questions of law arising on review of agency action-even those involving ambiguous laws-and set aside any such action inconsistent with the law as they interpret it." The court also agreed with the position that the Chevron doctrine has promoted agency inconsistencies in statutory interpretation.
In a scathing dissent, Justice Elena Kagan castigated the majority for once again overturning longstanding precedent. She noted that the Chevron doctrine had supported regulatory efforts by giving agency experts the ability to make reasonable decisions where congressional law was unclear, and cited examples such as "keeping air and water clean, food and drugs safe, and financial markets honest."
Kagan said that the majority had taken the power to make complex decisions over regulatory matters away from federal agencies-and given it to themselves.
"As if it did not have enough on its plate, the majority turns itself into the country's administrative czar," she wrote. "A rule of judicial humility gives way to a rule of judicial hubris."
Supreme Court Rules on First Amendment Social Media Case
The court ruled in Murthy v. Missouri that the plaintiffs who brought the suit alleging the federal government violated their First Amendment rights by pressuring social media platforms to remove their posts did not have standing to sue because they did not show a causal link between the government's actions and the removal of their posts. The court did not determine whether the government's actions were prohibited by the First Amendment.
Supreme Court Allows Enforcement of Anti-Camping Laws
The Supreme Court ruled in favor of the city of Grants Pass in a case about the city's anti-camping ordinances. The case, Johnson v. Grants Pass, centers around the enforcement of anti-camping ordinances on individuals experiencing homelessness. The court ruled in favor of Grants Pass, reasoning the Eighth Amendment was a poor foundation upon which to make Johnson's case because the punishments for disobeying the ordinances did not rise to level of severity necessary for the Eighth Amendment to apply. Read more
Supreme Court Pauses Enforcement of 'Good Neighbor' Plan
The court also ruled against the government in Ohio v. EPA. The 5-4 decision paused the enforcement of the "good neighbor" plan, an EPA rule requiring upwind states to reduce emissions that affect their downwind neighbors, as lower court challenges to the rule proceed. The justices opined that the EPA did not adequately explain its federal implementation plan for reducing air pollution and is likely to lose on the merits of the case, citing that as its reason for granting the emergency stay requested by the plaintiffs. The case will likely return to the high court on appeal after the lower court decisions are released.
Supreme Court Upholds Repatriation Tax in Moore v. United States
In a 7-2 decision, the Court affirmed the constitutionality of a mandatory repatriation tax provision imposing a one-time tax on shareholders of American-controlled foreign corporations' overseas profits. The provision is part of the 2017 Tax Cuts and Jobs Act. Writing for the majority, Justice Brett Kavanagh stated, "The MRT-which attributes the realized and undistributed income of an American-controlled foreign corporation to the entity's American shareholders, and then taxes the American shareholders on their portions of that income-does not exceed Congress's constitutional authority." The narrow decision is limited to: "(i) taxation of the shareholders of an entity, (ii) on the undistributed income realized by the entity, (iii) which has been attributed to the shareholders, (iv) when the entity itself has not been taxed on that income. In other words, our holding applies when Congress treats the entity as a pass-through." The decision avoids upending many important provisions of the Internal Revenue Code and opening broader implications of taxation of wealth, which would have been propelled as a hot topic of debate if the court found the tax is on income and not a levy on property.
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Supreme Court Upholds Law Banning Abusers From Owning Firearms
In United States v. Rahimi, the court held by a vote of 8-1 that a federal law banning the possession of a gun by someone who has been the subject of a domestic violence restraining order is constitutional and does not violate the Second Amendment.
Texas issued a domestic violence restraining order against Zackey Rahimi for assaulting his girlfriend. While that order was still in effect, he became a suspect in a series of shootings. Upon searching Rahimi's home, police found guns and ammunition. Rahimi pleaded guilty to violating a federal ban on the possession of a firearm while he was the subject of a domestic violence restraining order pursuant to 18 U.S.C. § 922(g)(8), a felony with significant prison time. The 5th U.S. Circuit Court of Appeals initially upheld his conviction. After the court in New York State Rifle & Pistol Association Inc. v. Bruen struck down New York's proper-cause requirement because it ran afoul of the 14th Amendment by violating law-abiding citizens' Second Amendment rights, the 5th Circuit withdrew its former opinion and issued a new opinion vacating Rahimi's conviction.
Rahimi argued that the federal statute metes out severe punishment against conduct expressly protected by the Second Amendment-the right to bear arms-and that there is no tradition in the country's history to remove firearms from individuals involved in a domestic violence incident.
The court rejected Rahimi's argument and reasoned that, pursuant to prior case law, "the right secured by the Second Amendment is not unlimited" (District of Columbia v. Heller, 554 U. S. 570, 626; 2008). A law that regulates the right to bear arms need only be analogous to the principles underlying the Second Amendment, the court said, "but it need not be a 'dead ringer' or a 'historical twin.'" The court went on to conclude that the government had met its burden of proof that the Second Amendment permits "the disarmament of individuals who pose a credible threat to the physical safety of others."
Twenty-five states, Washington, D.C., and the Northern Mariana Islands filed as amici in this case. They argued for reversal of the 5th Circuit's ruling and urged the high court to reaffirm that states can and should be able to regulate firearm ownership by dangerous individuals pursuant to their interest in providing for the health, safety and welfare of their citizens. They further argued that a ruling for Rahimi would undermine the states' public safety objective of protecting their citizens from domestic violence.
Supreme Court Punts Idaho Abortion Case Back to Lower Courts
The justices declined to resolve the issues in a case involving emergency abortion care for Idaho women and instead sent it back to lower courts for consideration. Read more
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NetChoice v. Paxton and Moody v. NetChoice
The issue before the Supreme Court in both cases was whether states can prohibit social media platforms from moderating user content. In a unanimous opinion, with concurring opinions from Justices Ketanji Brown Jackson, Clarence Thomas, Samuel Alito and Neil Gorsuch, the court vacated the lower circuit courts’ opinions because neither 5th Circuit Court of Appeals, nor the 11th Circuit Court of Appeals had carried out the correct analysis of the facial First Amendment charges to the state laws at issue that sought to regulate large internet platforms. A successful facial challenge to a state law results in a ruling that the state law is unconstitutional as written and must be thrown out.
NetChoice v. Paxton involves Texas law HB 20, which bars large social media platforms with more than 50 million monthly users from “censoring, banning, demonetizing or otherwise restricting” content based on the speaker’s viewpoint. It expressly permits Texas residents to sue a social media platform if they are wrongfully censored based on their political ideology. Texas argues that social media platforms are common carriers due to their market dominance and as such are central forums for public debate. NetChoice and the Computer & Communications Industry Association represent the social media platforms. They sued the Texas Attorney General arguing that HB 20 violates the First Amendment because it acts to control what speech appears on their platforms and prevents them from removing political disinformation, violent content and hate speech. The 5th Circuit Court of Appeals ruled in favor of Texas, holding HB 20 chills censorship, not speech, and that corporations do not have the protection of the First Amendment to censor what people say.
Moody v. NetChoice arises from a Florida statute called the “Stop Social Media Censorship Act.” Florida’s law imposes daily penalties ranging from $25,000 to $250,000 for a social media platform’s “deplatforming of a political candidate or journalistic enterprise.” The 11th Circuit Court of Appeals noted that the First Amendment protects private speech from government regulation. It ruled that social media platforms are not government actors, but are unequivocally private entities with First Amendment rights. The 11th Circuit concluded that their content moderation or editorial judgement are protected speech. The 11th Circuit ruled in favor of the social media companies and enjoined most of the Florida statute, exempting any disclosure provisions.
The court did provide a roadmap for these lower courts to follow when litigating a facial First Amendment challenge. Recognizing that facial challenges are hard to win, the court outlined the appropriate analysis. First, the lower court must determine the scope of the challenged state law. Does the state law affect the social media platforms’ other services such as direct messaging? Second, the lower court must decide which of the state law’s applications violate the First Amendment. This means asking, “an intrusion on protected editorial discretion?” Because neither of these inquiries had been done at the lower court level, the court remanded the cases back to the circuit courts.