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Regulatory: Courts and Congress Challenge Obama Administration

In early December, the battle lines were clearly drawn between the Obama Administration and Republican groups over the government's regulatory policies. This debate, which will play out in the courts and Congress, will be a recurring theme as the parties position themselves for the 2012 Presidential election.

On December 13, the U.S. District Court for the Eastern District of Virginia held unconstitutional a pivotal enforcement mechanism in the Patient Protection and Affordable Care Act--the "individual mandate" which requires each U.S. citizen to maintain a minimum level of health insurance coverage (Commonwealth of Virginia v. Sibelius, No. 10-188). The decision has some weak links, notably its analysis of the application of the critical Necessary and Proper Clause of the Constitution. The significance of the decision, however, is not its reasoning on the merits, but the fact that questions concerning the validity of the principal element of the President's domestic agenda will remain until the Supreme Court decides the issue. That factor will further complicate the already daunting task of implementing this complicated legislation.

On December 10, the U.S. Court of Appeals for the District of Columbia Circuit denied motions by regulated entities and conservative groups for a stay pending appeal of four rules adopted by the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions, including the finding that these emissions endanger public health and the environment. The court did, however, order that the challenges to these rules on the merits would be heard on the same day by the same panel. This procedural step creates the potential for the battle of Armageddon between the Administration and its opponents over the legal response to global warming.

The new Republican Chairmen of House Committees have promised to challenge Obama Administration regulations by attempting to withhold appropriations necessary to implement them, forcing Congressional votes to overturn major rules, and aggressive oversight of agency actions. Consciously or not, Congressional Republicans are following the same strategy that worked successfully in 1979-1980, a similar period of economic insecurity and concern whether new health and safety regulations were adversely affecting the country's ability to preserve its manufacturing capacity in the face of foreign competition. The Republican campaign against EPA rules limiting emissions of carcinogens was a powerful contributor to the election of Ronald Reagan in 1980.

In reaction to anticipated Republican opposition, and to the consternation of environmental groups, the Administration is delaying and rethinking some of its principal environmental priorities. In early December, the EPA announced delays in issuance of rules to tighten restrictions on emissions of ground level ozone (smog) and emissions of toxic chemicals from industrial boilers. The Administration concluded that issuance of these rules when the new House majority was first flexing its muscles would exacerbate claims that it was ruining the industrial base in Midwest states critical to the 2012 elections. The Administration decided that the time would be better spent bulletproofing the rules to eliminate rough edges and enhance the likelihood that they will survive the inevitable judicial challenges.

Whatever the outcome of these individual regulatory battles, the overall picture is clear. For the next two years, a multi-front war will be fought for the heart of the country by two disciplined and experienced groups of regulatory policy warriors.

John F. Cooney is a partner in the Washington, D.C., office of Venable.

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