A Box of Chocolates: Possible Legal Issues in 2017

Life is full of surprises. Virtually no one called either the Brexit vote or the election, and the Cubs won the World Series for the first time since 1908. So asking anyone to predict what the new year would bring by way of new or emerging legal issues suddenly seems more daunting than it would usually be. But here are a few things that I think we can expect.

The President-elect has made it clear that he would like to see less, rather than more regulation. He has said that he would like to see two regulations rescinded for every new one promulgated. But he has also indicated that regulations for the environment and safety might stay.

What he has not said is how he intends to eliminate existing regulations, and that’s important because many of the regulations that he has indicated that he would like to eliminate cannot simply be done away with. It may take additional rulemaking to undo some of the regulations that are the most troublesome. That process will 1) take time, and 2) allow those who oppose the elimination of the regulation to comment and 3) ultimately sue to stop the revocation of the regulation.

The process mirrors the one that is used to promulgate regulations in the first place and will allow those who oppose eliminating the regulation to use the same tools to delay that elimination that we used to delay final implementation. In short, it could take years to actually get rid of some of the regulations. Of course, it is also possible that budgetary restrictions could be used to prevent enforcement of certain regulations, but that would have to come from Congress … and we know how quickly they act.

Given all that, here is my list of likely targets:

Waters of the United States. On the permitting and operations side, the President-elect has already said that he would like to scale back the current Waters of the United States (WOTUS) rules. This is one of the regulations that has already been promulgated and would likely need a separate rulemaking proceeding to alter materially. The current, expanded rule was stayed in October 2016 pending clarification by the implementing agencies (EPA and the Corps of Engineers), so the incoming administration’s position in that litigation should provide a key indication of where the rule is ultimately headed.

Fair Pay and Safe Workplace (EO 13673). President Obama issued this order on July 31 of last year. Among other things, it requires anyone bidding on a federal contract to report violations of virtually any labor law (except MSHA) as part of the bidding process. Those violations (even if still unproven) would then be counted against that bidder during competition for the contract. Although originally issued as an Executive Order, which could simply be rescinded by the incoming president, the federal acquisition rules were formally amended to include the requirements of the order. In order to do away with the requirements, those regulations would have to be formally rescinded. Like the WOTUS rules, the violation disclosure provisions of the rules were stayed by a federal court in October and their future remains uncertain. Once again, the incoming administration’s position in the litigation will be key to determining the future of these rules.

New Income Limits for Overtime. Regulations that would have raised the threshold for exemption from overtime (so called “exempt” employees) from $455 per week to $913 per week were to have gone into effect Dec. 1. However, like the two rules above, these rules were also stayed by a federal court late in the year. As with the other two rules, we need to see what position the incoming administration will take in the litigation in order to determine the future (if any) of these rules.

Workplace Examinations. MSHA proposed new and greatly expanded workplace examination requirements in the fall of 2016. They gave interested parties an abnormally short time to respond and made statements indicating that they intended to finalize the rules before any change in administration. Most regulations are required to be reviewed by the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA). It appears that such a review has not been completed and there is little likelihood that any review will be completed before the change in administration. Since OMB is part of the Executive Office of the President, there is every likelihood that the proposed rule will not make it through OIRA review and thus not become final.

Pattern of Violations (POV). Although revised POV rules became final some time ago, litigation regarding the rules continues. Once again, the incoming administration’s position in the litigation will dictate whether these rules will continue in effect or not.

Civil Penalties. MSHA made a point of saying that it was determined to change the way civil penalties were being computed. As many of you know, the proposed rule would have greatly increased penalties, penalized operators who were trying to improve compliance and would have penalized small operations, including most quarries. No final rule was ever issued and MSHA recently informed a number of parties that it was not intending to issue a final rule before the end of the administration. Although nothing is ever certain, it appears that the proposal is dead.

The Federal Mine Safety and Health Review Commission (FMSHRC). All contests of citations and penalties are heard before administrative law judges (ALJs) of the FMSHRC. Once the ALJ renders a decision, the losing party can appeal that decision to the FMSHRC. The FMSHRC consists of five Commissioners. One Commissioner’s term expired in the fall and no new Commissioner has been appointed. During the last several years, decisions of the FMSHRC have largely gone against operators and have tended to affirm expanded interpretations of regulations that have been espoused by MSHA. The new Commissioner will likely have a greater and more lasting effect on future enforcement than will the new assistant secretary for Mine Safety and Health. It is critical that the industry pay attention to, and get involved in, the appointment of the new Commissioner as that may well have the most significant long term effect on day-to-day enforcement matters of any of the MSHA rules discussed above.

As I said above, all of this is nothing more than informed speculation. As I also said above, everyone got it wrong last year and I may have done the same. The most important thing to remember is this: these rules, the litigation about these rules and the folks before whom they are litigated are critical to the conduct of our business.

You don’t need to look very far to find out that the people who favored the rules when they were promulgated have already vowed to fight bitterly to keep them. We stand on the sidelines of that fight at our peril. We cannot sit by and depend on campaign promises to see that they start to bend our way.

Mark Savit is senior counsel at Husch Blackwell. As a member of its Energy & Natural Resources group, Savit counsels clients in government investigations and regulatory matters, and litigates improper enforcement actions and whistleblower cases. He has extensive experience in mining and oil and gas; health, safety and environmental law; industrial disaster response; and regulatory and legislative services. He can be reached at [email protected].

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