Administrative Law

A Solution Enabled by the Conflict in Ukraine, Cryptocurrency Regulation, and the Energy Crisis Could Address All Three Issues

April 17, 2022
Administrative Law, Climate Change, Cryptocurrency, Energy Law, New Technology, Securities Law

Chase Webber, MJLST Staffer

This post focuses on two political questions reinvigorated by Vladimir Putin’s invasion of Ukraine: the energy crisis and the increasing popularity and potential for blockchain technology such as cryptocurrency (“crypto”).  The two biggest debates regarding blockchain may be its extraordinarily high use of energy and the need for regulation.  The emergency of the Ukraine invasion presents a unique opportunity for political, crypto, and energy issues to synergize – each with solutions and positive influence for the others.

This post will compare shortcomings in pursuits for environmentalism and decentralization.  Next, explain how a recent executive order is an important turning point towards developing sufficient peer-to-peer technology for effective decentralization.  Finally, suggest that a theoretical decentralized society may be more well-equipped to address the critical issues of global politics, economy, and energy use, and potentially others.

 

Relationship # 1: The Invasion and The Energy Crisis

Responding to the invasion, the U.S. and other countries have sanctioned Russia in ways that are devastating Russia’s economy, including by restricting the international sale of Russian oil.  This has dramatic implications for the interconnected global economy.  Russia is the second-largest oil exporter; cutting Russia out of the picture sends painful ripples across our global dependency on fossil fuel.

Without “beating a dead dinosaur” … the energy crisis, in a nutshell, is that (a) excessive fossil fuel consumption causes irreparable harm to the environment, and (b) our thirst for fossil fuel is unsustainable, our demand exceeds the supply and the supply’s ability to replenish, so we will eventually run out.  Both issues suggest finding ways to lower energy consumption and implement alternative, sustainable sources of energy.

Experts suggest innovation for these ends is easier than deployment of solutions.  In other words, we may be capable of fixing these problems, but, as a planet, we just don’t want it badly enough yet, notwithstanding some regulatory attempts to limit consumption or incentivize sustainability.  If the irreparable harm reaches a sufficiently catastrophic level, or if the well finally runs dry, it will require – not merely suggest – a global reorganization via energy use and consumption.

The energy void created by removing Russian supply from the global economy may sufficiently mimic the well running dry.  The well may not really be dry, but it would feel like it.  This could provide sufficient incentive to implement that global energy reset, viz., planet-wide lifestyle changes for existing without fossil fuel reliance, for which conservationists have been begging for decades.

The invasion moves the clock forward on the (hopefully) inevitable deployment of green innovation that would naturally occur as soon as we can’t use fossil fuels even if we still want to.

 

Relationship # 2: The Invasion and Crypto   

Crypto was surprisingly not useful for avoiding economic sanctions, although it was designed to resist government regulation and control (for better or for worse).  Blockchain-based crypto transactions are supposedly “peer-to-peer,” requiring no government or private intermediaries.  Other blockchain features include a permanent record of transactions and the possibility of pseudonymity.  Once assets are in crypto form, they are safer than traditional currency – users can generally transfer them to each other, even internationally, without possibility of seizure, theft, taxation, or regulation.

(The New York Times’ Latecomer’s Guide to Crypto and the “Learn” tab on Coinbase.com are great resources for quickly building a basic understanding of this increasingly pervasive technology.)

However, crypto is weak where the blockchain realm meets the physical realm.  While the blockchain itself is safe and secure from theft, a user’s “key” may be lost or stolen from her possession.  Peer-to-peer transactions themselves lack intermediaries, but hosts are required for users to access and use blockchain technology.  Crypto itself is not taxed or regulated, but exchanging digital assets – e.g., buying bitcoin with US dollars – are taxed as a property acquisition and regulated by the Security Exchange Commission (SEC).  Smart contract agreements flounder where real-world verification, adjudication, or common-sense is needed.

This is bad news for sanctioned Russian oligarchs because they cannot get assets “into” or “out of” crypto without consequence.  It is better news for Ukraine, where the borderless-ness and “trust” of crypto transaction eases international transmittal of relief assets and ensures legitimate receipt.

The prospect of crypto being used to circumvent U.S. sanctions brought crypto into the federal spotlight as a matter of national security.  President Biden’s Executive Order (EO) 14067 of March 9, 2022 offers an important turning point for blockchain: when the US government began to direct innovation and government control.  Previously, discussions of whether recognition and control of crypto would threaten innovation, or a failure to do so would weaken government influence, had become a stalemate in regulatory discussion. The EO seems to have taken advantage of the Ukraine invasion to side-step the stagnant congressional debates.

Many had recognized crypto’s potential, but most seemed to wait out the unregulated and mystical prospect of decentralized finance until it became less risky.  Crypto is the modern equivalent of private-issued currencies, which were common during the Free Banking Era, before national banks were established at the end of the Civil War.  They were notoriously unreliable.  Only the SEC had been giving crypto plenty of attention, until (and especially) more recently, when the general public noticed how profitable bitcoin became despite its volatility.

EO 14067’s policy reasoning includes crypto user protection, stability of the financial system, national security (e.g., Russia’s potential for skirting sanctions), preventing crime enablement (viz., modern equivalents to The Silk Road dark web), global competition, and, generally, federal recognition and support for blockchain innovation.  The president asked for research of blockchain technology from departments of Treasury, Defense, Commerce, Labor, Energy, Homeland Security, the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), SEC, Commodity Futures Trading Commission (CFTC), Environmental Protection Agency (EPA), and a handful of other federal agencies.

While promoting security and a general understanding of blockchain’s potential uses and feasibility, the order also proposes Central Bank Digital Currencies (CBDC).  CBDCs are FedCoins – a stablecoin issued by the government instead of by private entities.  Stablecoins (e.g., Tether) are a type of crypto whose value is backed by the US Dollar, whereas privately issued crypto (e.g., Bitcoin, Ether) are more volatile because their value is backed by practically nothing.  So, unlike Tether, a privately issued stablecoin, CBDCs would be crypto issued and controlled by the U.S. Treasury.

Imagine CBDCs as a dollar bill made of blockchain technology instead of paper.  A future “cash transaction” could feel more like using Venmo, but without the intermediary host, Venmo.

 

Relationship # 3: Crypto and Energy

Without getting into too many more details, blockchain technology, on which crypto is based, requires an enormous amount of energy-consuming computing power.

Blockchain is a decentralized “distributed ledger technology.” The permanent recordings of transactions are stored and verifiable at every “node” – the computer in front of you could be a node – instead of in a centralized database.  In contrast, the post you are now reading is not decentralized; it is “located” in a UMN database somewhere, not in your computer’s hard drive.  Even a shared Google Doc is in a Google database, not in each of the contributor’s computers.  In a distributed system, if one node changes its version of the distributed ledger, some of the other nodes verify the change.  If the change represents a valid transaction, the change is applied to all versions at each node, if not, the change is rejected, and the ledger remains intact.

These repeated verifications give blockchain its core features, but also require a significant amount of energy.

For most of the history of computers, computing innovation has focused primarily on function, especially increased speed.  Computer processing power eventually became sufficiently fast that, in the last twenty-ish years, computing innovation began to focus on achieving the same speed using less energy and/or with more affordability.  Automotive innovation experienced a similar shift on a different timeline.

Blockchain will likely undergo the same evolution.  First, innovators will focus on function and standardization.  Despite the popularity, this technology still lacks in these areas.  Crypto assets have sometimes disappeared into thin air due to faulty coding or have been siphoned off by anonymous users who found loopholes in the software.  Others, who became interested in crypto during November 2021, after hearing that Ether had increased in value by 989% that year and the crypto market was then worth over $3 trillion, may have been surprised when the value nearly halved by February.

Second, and it if it is a profitable investment – or incentivized by future regulations resulting from EO14067 – innovators will focus on reducing the processing power required for maintaining a distributed ledger.

 

Decentralization, and Other Fanciful Policies

Decentralization and green tech share the same fundamental problem.  The ideas are compelling and revolutionary.  However, their underlying philosophy does not yet match our underlying policy.  In some ways, they are still too revolutionary because, in this author’s opinion, they will require either a complete change in infrastructure or significantly more creativity to be effective.  Neither of these requirements are possible without sufficient policy incentive.  Without the incentive, the ideas are innovative, but not yet truly disruptive.

Using Coinbase on an iPhone to execute a crypto transaction is to “decentralization” what driving a Tesla running on coal-sourced electricity is to “environmentalism.”  They are merely trendy and well-intentioned.  Tesla solves one problem – automotive transportation without gasoline – while creating another – a corresponding demand for electricity – because it relies on existing infrastructure.  Similarly, crypto cannot survive without centralization.  Nor should it, according to the SEC, who has been fighting to regulate privately issued crypto for years.

At first glance, EO 14067 seems to be the nail in the coffin for decentralization.  Proponents designed crypto after the 2008 housing market crash specifically hoping to avoid federal involvement in transactions.  Purists, especially during The Digital Revolution in the 90s, hoped peer-to-peer technology like blockchain (although it did not exist at that time) would eventually replace government institutions entirely – summarized in the term, “code is law.”  This has marked the tension between crypto innovators and regulators, each finding the other uncooperative with its goals.

However, some, such as Kevin Werbach, a prominent blockchain scholar, suggest that peer-to-peer technology and traditional legal institutions need not be mutually exclusive.  Each offers unique elements of “trust,” and each has its weaknesses.  Naturally, the cooperation of novel technologies and existing legal and financial structures can mean mutual benefit.  The SEC seems to share a similarly cooperative perspective, but distinguished, importantly, by the expectation that crypto will succumb to the existing financial infrastructure.  Werbach praises EO 14067, Biden’s request that the “alphabet soup” of federal agencies investigate, regulate, and implement blockchain, as the awaited opportunity for government and innovation to join forces.

The EPA is one of the agencies engaged by the EO.  Pushing for more energy efficient methods of implementing blockchain technology will be as essential as the other stated policies of national security, global competition, and user friendliness.  If the well runs dry, as discussed above, blockchain use will stall, as long as blockchain requires huge amounts of energy.  Alternatively, if energy efficiency can be attained preemptively, the result of ongoing blockchain innovation could play a unique role in addressing climate change and other political issues, viz., decentralization.

In her book, Smart Citizens, Smarter State: The Technologies of Expertise and the Future of Governing, Beth Simone Noveck suggests an innovative philosophy for future democracies could use peer-to-peer technology to gather wide-spread public expertise for addressing complex issues.  We have outgrown the use of “government bureaucracies that are supposed to solve critical problems on their own”; by analogy, we are only using part of our available brainpower.  More recently, Decentralization: Technology’s Impact on Organizational and Societal Structure, by local scholars Wulf Kaal and Craig Calcaterra, further suggests ways of deploying decentralization concepts.

Decentralized autonomous organizations (“DAOs”) are created with use of smart contracts, a blockchain-based technology, to implement more effectively democratic means of consensus and information sharing.  However, DAOs are still precarious.  Many of these have failed because of exploitation, hacks, fraud, sporadic participation, and, most importantly, lack of central leadership.  Remember, central leadership is exactly what DAOs and other decentralized proposals seek to avoid.  Ironically, in existing DAOs, without regulatory leadership, small, centralized groups of insiders tend to hold all the cards.

Some claim that federal regulation of DAOs could provide transparency and disclosure standards, authentication and background checks, and other means of structural support.  The SEC blocked American CryptoFed, the first “legally sanctioned” DAO, in the state of Wyoming.  Following the recent EO, the SEC’s position may shift.

 

Mutual Opportunity

To summarize:  The invasion of Ukraine may provide the necessary incentive for actuating decentralized or environmentalist ideologies.  EO 14067 initiates federal regulatory structure for crypto and researching blockchain implementation in the U.S.  The result could facilitate eventual decentralized and energy-conscious systems which, in turn, could facilitate resolutions to grave impending climate change troubles.  Furthermore, a new tool for gathering public consensus and expertise could shed new light on other political issues, foreign and domestic.

This sounds suspiciously like, “idea/product X will end climate change, all political disagreements, (solve world hunger?) and create global utopia,” and we all know better than to trust such assertions.

It does sound like it, but Noveck and Kaal & Calcaterra both say no, decentralization will not solve all our problems, nor does it seek to.  Instead, decentralization offers to make us, as a coordinated society, significantly more efficient problem solvers.  A decentralized organizational structure hopes to allow humans to react and adapt to situations more naturally, the way other living organisms adapt to changing environments.  We will always have problems.  Centralization, proponents argue, is no longer the best means of obtaining solutions.

In other words, one hopes that addressing critical issues in the future – like potential military conflict, economic concerns, and global warming – will not be exasperated or limited by the very structures with which we seek to devise and implement a resolution.

Save the Children . . . From Algorithms?

March 29, 2022
Administrative Law, Constitutional Law, Data, First Amendment, Internet, Privacy, Social Media

Sarah Nelson, MJLST Staffer

Last week, a bill advanced out of the Minnesota House Commerce Finance and Policy Committee that would ban social media platforms from utilizing algorithms to suggest content to those under the age of 18. Under the bill, known as HF 3724, social media platforms with more than one million account holders that operate in Minnesota, like Instagram, Facebook, and TikTok, would no longer be able to use their algorithms to recommend user-generated content to minors.

The sponsor of the bill, Representative Kristin Robbins, a Republican from Maple Grove, said that she was motivated to sponsor HF 3724 after reading two articles from the Wall Street Journal. In the first, the Wall Street Journal created dozens of automated accounts on the app TikTok, which it registered as being between the ages of 13 and 15. The outlet then detailed how the TikTok algorithm, used to create a user’s For You feed, would inundate teenage users with sex- and drug-related content if they engaged with that content. Similarly, in the second article, the Wall Street Journal found that TikTok would repeatedly present teenagers with extreme weight loss and pro-eating disorder videos if they continued to interact with that content.

In response to the second article, TikTok said it would alter its For You algorithm “to avoid showing users too much of the same content.” It is also important to note that per TikTok’s terms of service, to use the platform, users must be over 13 and must have parental consent if they are under 18. TikTok also already prohibits “sexually explicit material” and works to remove pro-eating disorder content from the app while providing a link to the National Eating Disorders Association helpline.

As to enforcement, HF 3724 says social media platforms are liable to account holders if the account holder “received user-created content through a social media algorithm while the individual account holder was under the age of 18” and the social media platform “knew or had reason to know that the individual account holder was under the age of 18.” Social media platforms would then be “liable for damages and a civil penalty of $1,000 for each violation.” However, the bill provides an exception for content “that is created by a federal, state, or local government or by a public or private school, college, or university.”

According to an article written on the bill by the legislature, Robbins is hopeful that HF 3724 “could be a model for the rest of the country.”

 

Opposition from Tech

As TechDirt points out, algorithms are useful; they help separate relevant content from irrelevant content, which optimizes use of the platform and stops users from being overwhelmed. The bill would essentially stop young users from reaping the benefits of smarter technology.

A similar argument was raised by NetChoice, which expressed concerns that HF 3724 “removes the access to beneficial technologies from young people.” According to NetChoice, the definition of “social media” used in the bill is unacceptably broad and would rope in sites that teenagers use “for research and education.” For example, NetChoice cites to teenagers no longer being able to get book recommendations from the algorithm on Goodreads or additional article recommendations on a research topic from an online newspaper.

NetChoice also argues that HF 3724 needlessly involves the state in a matter that should be left to the discretion of parents. NetChoice explains that parents, likely knowing their child best, can decide on an individual basis whether they want their children on a particular social media platform.

Opponents of the bill also emphasize that complying with HF 3724 would prove difficult for social media companies, who would essentially have to have separate platforms with no algorithmic functions for those under 18. Additionally, in order to comply with the bill, social media platforms would have to collect more personal data from users, including age and location. Finally, opponents have also noted that some platforms actually use algorithms to present appropriatecontent to minors. Similarly, TikTok has begun utilizing its algorithms to remove videos that violate platform rules.

 

What About the First Amendment?

In its letter to the Minnesota House Commerce Committee, NetChoice said that HF 3724 would be found to violate the First Amendment. NetChoice argued that “multiple court cases have held that the distribution of speech, including by algorithms such as those used by search engines, are protected by the First Amendment” and that HF 3724 would be struck down if passed because it “result[s] in the government restraining the distribution of speech by platforms and Minnesotans access to information.”

NetChoice also cited to Ashcroft v. ACLU, a case in which “the Supreme Court struck down a federal law that attempted to prevent the posting of content harmful to teenagers on the web due to [the fact it was so broad it limited adult access] as well as the harm and chilling effect that the associated fines could have on legal protected speech.”

As Ars Technica notes, federal courts blocked laws pertaining to social media in both Texas and Florida last year. Both laws were challenged for violating the First Amendment.

 

Moving Forward

HF 3724 advanced unanimously out of the House Judiciary Finance and Civil Law Committee on March 22. The committee made some changes to the bill, specifying that the legislation would not impact algorithms associated with email and internet search providers. Additionally, the committee addressed a criticism by the bill’s opponents and exempted algorithms used to filter out age-inappropriate content. There is also a companion bill to HF 3724, SF3922, being considered in the Senate.

It will be interesting to see if legislators are dissuaded from voting for HF 3724 given its uncertain constitutionality and potential impact on those under the age of 18, who will no longer be able to use the optimized and personalized versions of social media platforms. However, so far, to legislators, technology companies have not put their best foot forward, as they have sent lobbyists in their stead to advocate against the bill.

Predicted Effects of Price Transparency on Healthcare Economics

March 29, 2022
Administrative Law, Health Law, Healthcare

David Edholm, MJLST Staffer

In 2019, the Centers for Medicare and Medicaid Services (CMS) promulgated the Price Transparency Rule in order to allow patients to access healthcare pricing information. The stated purpose of the Price Transparency Rule is as follows:

By disclosing hospital standard charges [including payer-specific negotiated charges and discounted-cash prices], we believe the public (including patients, employers, clinicians, and other third parties) will have the information necessary to make more informed decisions about their care. We believe the impact of these final policies will help to increase market competition, and ultimately drive down the cost of healthcare services, making them more affordable for all patients.

There is significant debate whether compliance with the Price Transparency Rule will actuate its intended purpose.

On the proponent side, economic theory to support this purpose statement comes from a market advocacy perspective. In order to drive down the cost of healthcare through competition, consumers must know the prices in advance in order to bargain between providers. By giving consumers the ability to shop around and barter, the thinking goes, providers will undercut competitors by lowering their own prices, even slightly below a competitor’s rate.

Another theory that supports price transparency is that shining light onto healthcare pricing will lead to more public outcry, guilting providers to lower overinflated or unconscionable gross charges or hospital fees. Public outcry may also compel states to create global healthcare budget caps, which have been shown to have positive price-lowering effects. A recent study from Rice University found that Maryland’s all-payer global budget policy reduces costs while increasing quality of care.

Skeptics of the rule, however, including the American Hospital Association (AHA), argue that price transparency will induce institutions that currently charge less than competitors to increase their prices to match their competitors, ultimately raising costs. In litigation, the DC Circuit responded to that argument, holding that, based on available research, this result is unlikely. Secretary Azar was not required to rely on definitive rather than predictive data in writing the requirements because of the novelty of the price disclosure scheme and the unique complexity of healthcare pricing. The DC Circuit held that relying on studies of similar price disclosure schemes in other industries was sufficient to inform a stable policy judgment.

However, the healthcare service market is of a unique nature in that quality of care may be a consumer’s primary consideration before seeking treatment, trumping price considerations. Alternatively, a consumer may assume that paying more means receiving higher-quality care. Quality of care is incredibly hard to measure and report, and unless a consumer has access to quality-of-care information alongside pricing information, they are more likely to make fallacious assumptions about this correlation. Another unique factor about healthcare shopping is that many consumers have a strong relationship with their physician, thus would base their decision primarily on receiving advice from one they trust, rather than the out-of-pocket cost of care, especially if the difference is negligible.

Last is the complexity of healthcare viewpoint. Opponents of the price transparency rule emphasize the nature of healthcare as an unpredictable trade. For example, if a patient consumer undergoes surgery to fix one problem, a surgeon may discover another problem amidst the procedure. The standard of care likely prompts the surgeon to correct both problems, thus the patient consumer will be charged an amount higher than they could have reasonably predicted. The AHA brought this argument to court to support its assertion that the price transparency rule violated the Administrative Procedure Act (APA) by overstating the rule’s benefits. The DC Circuit court responded that the rule did not require hospitals to publish every potential permutation of finalized charges, rather that the baseline charges are publicized. Thus, in the surgery scenario, a patient consumer should have access to the payer-negotiated rate to fix the initial problem.

The jury is out, so to speak, on the effects that Price Transparency Rule compliance will have on healthcare economics. But from a consumer perspective, rapidly increasing healthcare costs are at the forefront of relevant political issues.

Xenotransplantation: Ethics and Public Policy Need to Catch Up to the Science

March 5, 2022
Administrative Law, Biotechnology, Discrimination, Ethics, Food and Drug Law, Health Law, Medical Devices, New Technology

Claire Colby, MJLST Staffer

In early January, surgeons at the University of Maryland Medical Center made history by successfully transplanting a genetically altered pig heart to a human recipient, David Bennett.  The achievement represents a major milestone in transplantation. The demand for transplantable organs far outpaces the supply, and xenotransplantation–the implantation of non-human tissue into human recipients–could help bridge this gap. In the U.S. alone, more than 106,000 people are on the waiting list for transplants. Legal and ethical questions remain open about the appropriateness of implementing xenotransplants on a large scale. 

The FDA approved the January transplant through an emergency authorization compassionate use pathway because Bennett likely would have died without this intervention. Larger clinical trials will be needed to generate enough data to show that xenotransplants are safe and effective. The FDA will require these trials to show xenotransplantations are non-inferior to human organ transplants. IRB requirements bar interventions where risk outweighs benefits for patients, but accurately predicting and measuring risk is difficult. 

If xenotransplantation becomes standard clinical practice, animal rights proponents may balk at the idea of raising pigs for organs. Far before that point, pre-clinical trials will make heavy use of animal models. Institutional Animal Care and Use Committees (IACUCs) which oversee animal research in universities and medical entities apply a “much lower ethical standard” for animals than human research subjects. Bioethicists apply a “3R” framework for animal subjects research that stresses replacing animal models, reducing animal testing, and refining their use. Because of the inherent nature of xenotransplantation, applying this framework may be near impossible. Ongoing discussions are needed with relevant stakeholders.  

If both human and animal organs are approved for widespread transplant, but human organs prove superior, new allocation policies are needed to determine who gets what. Organ allocation policy is currently dictated by the Organ Procurement and Transplantation Network (OPTN). As it stands, organ transplantation shows inequality across racial groups and financial status. New allocation policies for organs must not reinforce or worsen these disparities. 

Like all medical interventions, patients must be able to provide informed consent for xenotransplantation. The recipient of the altered pig heart had previously been deemed ineligible for a human heart transplant because his heart failure was poorly managed. Reserving experimental interventions, like xenotransplantations, for the sickest patients raises serious ethical concerns. Are these desperate patients truly able to give meaningful consent? If xenotransplantation becomes a common practice, the traditional model of institutional review boards may need updating. Currently, individual institutions maintain their own IRBs. Xenotransplantation of altered animal organs may involve several sites: procurement of the organ, genetic editing, and transplantation may all take place in different locations. A central IRB for xenotransplantation could standardize and streamline this process. 

In all, xenotransplantation represents an exciting new frontier in transplant medicine. Responsibly implementing this innovation will require foresight and parallel innovation in ethics and public policy. 

Hydrogen – The Fuel of the Future?

March 5, 2022
Administrative Law, Climate Change, Energy Law, Environmental Law

Max Meyer, MJLST Staffer

Hydrogen is viewed by many as being a key part of reducing global greenhouse gas emissions. Recently, a bipartisan group of lawmakers expressed interest in hydrogen and want to support its adoption in the United States. When used as a fuel source, hydrogen produces only water and heat. It could potentially be used to power cars, trucks, and airplanes and generate electricity. Hydrogen is used on a fairly minimal scale today, but entities ranging from industry to government are increasing investment in the technology. Currently, hydrogen is regulated by a variety of federal agencies, but no comprehensive regulatory scheme exists.

 

Hydrogen Production 

Hydrogen is one of the most abundant elements on earth, but it only exists in compound form with other elements. Hydrogen has the highest fuel content of any fuel by weight.

Hydrogen can be separated from compounds in a few different ways. It can be produced from steam-methane reforming which accounts for 95% of hydrogen production in the U.S. In this process, “natural gas (which is mostly methane) reacts with high pressure, high temperature steam in the presence of a catalyst to produce a mixture of mostly hydrogen and carbon monoxide.” The product stream is then processed further to produce a stream of mostly hydrogen. Water can be added to this mixture to convert the carbon monoxide into carbon dioxide. If the carbon dioxide is subsequently capture and stored underground, the hydrogen produced is referred to as blue hydrogen. If the carbon dioxide is not captured, the hydrogen is called grey hydrogen.

Hydrogen can also be produced from water by electrolysis which splits water molecules into pure hydrogen and oxygen using electricity. When renewable energy is used for electrolysis the resulting hydrogen is often referred to as green hydrogen.

 

Why Is It Important?

Using fuel cells, hydrogen can produce electricity. A fuel cell contains two electrodes, one negative and one positive, with an electrolyte in the middle. Hydrogen is fed into the negative electrode and air is fed into the positive end. At the negative end, a catalyst separates the hydrogen molecules into protons and electrons. To produce electricity, the electrons go through an external circuit before entering the positive electrode. Then, the protons, electrons, oxygen unite to produce water and heat. Fuel cells can be used in a number of applications ranging passenger and commercial vehicles to powering buildings.

 

Current Regulatory Framework

Hydrogen is regulated by several federal agencies. The Pipeline and Hazardous Materials Safety Administration (PHMSA) regulates hydrogen pipelines. PHMSA’s mission is to “protect people and the environment by advancing the safe transportation of energy and other hazardous materials[.]” Thus, PHMSA’s regulation of hydrogen pipelines is focused on safety. The Occupational Safety and Health Administration (OSHA) regulates hydrogen in workplaces OSHA’s regulation of hydrogen specifically covers the installation of hydrogen systems. The Environmental Protection Agency (EPA) also regulates hydrogen in several ways. Hydrogen is regulated under the EPA’s Mandator Greenhouse Gas Reporting Program, Effluent Standards under the Clean Water Act, and Chemical Accident Prevention program. However, the EPA’s regulation of hydrogen is primarily a result of hydrogen’s relationship to fossil fuels. The regulations are concerned with the production of hydrogen from fossil fuels such as the methane steam reform process outlined above.

The Department of Energy (DOE) has invested in research and development concerning hydrogen. In 2020, the DOE released its Hydrogen Program Plan. The DOE’s program is intended to “research, develop and validate transformational hydrogen and related technologies… and to address institutional and market barriers, to ultimately enable adoption across multiple applications and sectors.”

In 2021, Congress passed an infrastructure bill with $9.5 billion of funding for clean hydrogen initiatives. $8 billion of that funding is directed towards the creation of Regional Clean Hydrogen Hubs across the country to increase the use of hydrogen in the industrial sector. $1 billion is for clean hydrogen electrolysis research to lower costs from producing hydrogen using renewable energy. Finally, $500 million is for Clean Hydrogen Manufacturing and Recycling to “support equipment manufacturing and strong domestic supply chains.”

 

Regulation in the Future

The federal government currently does not regulate the construction of hydrogen pipelines. Presently, the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act “regulates the siting, construction, and operation of interstate natural gas pipelines.” If Congress were to give FERC this same power for hydrogen pipelines it would allow for national planning of the infrastructure and lead to a comprehensive pipeline network. Recently, members of Congress have considered the regulatory framework covering hydrogen pipelines and if additional authority over these pipelines should be given to FERC or other federal agencies. However, these discussions are still in the preliminary stages.

Hydrogen has the potential to play a large role in the United States’ effort to reduce greenhouse gas emissions. It can be used in a variety of industries including the transportation and industrial sectors. Congress has recognized hydrogen’s importance and must continue to invest in lowering the costs of hydrogen production and building hydrogen infrastructure.

Zombie Deer: Slowing the Spread of CWD

February 18, 2022
Administrative Law, Agriculture, Animal Law, Environmental Law

Warren Sexson, MJLST Staffer

Minnesota is one of the premier states in the Union for chasing whitetails. In 2020, over 470,000 licenses were purchased to harvest deer. As a hunter myself, I understand the importance of protecting Minnesota’s deer herd and habitat. The most concerning threat to whitetail deer in the state is Chronic Wasting Disease (CWD). CWD alters the central nervous system, similar to “mad cow disease,” causing deer to lose weight, stumble, drool, and behave similarly to an extra on The Walking Dead. It was first discovered in 1967 in Colorado mule deer and is transmissible to other ungulates such as moose, elk, red deer, black-tail deer, Sitka deer, and reindeer. It is 100% fatal in animals it infects and there is no known treatment or vaccine. While it currently poses no threat to humans, Canadian researchers have shown eating the meat from infected animals can infect hungry macaques, prompting the CDC and the World Health Organization to recommend against consumption of CWD positive animals. Luckily, in Minnesota there were only a handful of cases last season. Challenges still remain, however, and the Minnesota Department of Natural Resources (DNR) and the state legislature have tools at their disposal to combat the spread.

The DNR currently has a comprehensive response plan. In order to get a deer hunting license, the hunter has to pick what “zone” he or she will be hunting in. Minnesota is divided up into zones based off of the deer population and geography. Each zone has different guidelines for how many licenses will sell to the public. Some are “limited draw,” meaning a lottery system where only a certain number of applicants are selected, others are “over-the-counter,” meaning anyone who wants a license in that unit may buy one. Within the zoning system, the DNR has three “CWD Zone” classifications that restrict harvesting deer depending on the risks of the disease—surveillance, control, and management zones. Surveillance zones are where CWD has been found in captive deer or in wild deer in an adjacent zone. Control zones border the management zones, and management zones take up most of the south-eastern portion of the state, where CWD is highly concentrated. The restrictions in each type of zone vary, with surveillance zones being the least restricted and management zones being the most. Hunters have a key role in slowing the spread of CWD. Reducing deer populations in CWD ridden areas helps to reduce contact among deer and lower infection rates. However, there are other ways to further Minnesota’s commitment to slowing the spread of CWD.

The DNR can use emergency actions; it has done so recently. In October of 2021, the DNR temporarily banned moving farmed deer into and within the state through emergency action. Farmed deer (deer raised in captivity for use in trophy hunting) are a main vector of transmission for CWD. The ban was lifted in December but could have lasted longer. The DNR has emergency authority under Minn. Stat. § 84.027 Subd. 13(b) and (g). By enacting emergency declarations, the DNR can continue to use proven measures to slow the spread: requiring testing in high risk areas, banning movement between deer farms, increasing legal limits, and requiring hunters who desire a big buck to first harvest does in so called “Earn-a-Buck” programs. But, such emergency authority can only be 18 months at the longest. While limited in time, emergency orders provide the DNR the flexibility it needs to combat the disease’s spread.

The agency could also attempt to regulate by standard rulemaking authority as laid out in Chapter 14 of Minnesota’s statutes. The agency likely has authority to regulate deer hunting rules relating to CWD and recently has gained concurrent authority over deer farms along with the Board of Animal Health. However, if the DNR attempted to ban deer farming or imposed severe regulatory requirements, industry and interest groups would likely respond with legal challenges to the rulemaking process. In previous attempts to severely restrict deer farms, the Minnesota Deer Farmers Association has filed lawsuits attempting to block restrictions.

While the DNR likely can regulate deer hunting to slow the spread, the legislature is the best option for stopping deer farming as a whole. It is not necessarily a one-sided issue; a bi-partisan coalition of hunters and environmentalistswish to see the practice banned. State Rep. Rick Hansen (DFL) who chairs the House Environment and Natural Resources Finances and Policy Committee has discussed ending the practice and buying out all existing operators. Craig Engwall, head of the Minnesota Deer Hunters Association has additionally called for such a ban. State legislation would be the most comprehensive way to slow the spread of CWD.

State legislators should also consider funding more research for potential vaccines and treatments for CWD. Funding is beginning to pick up; Canadian researchers have begun working on potential vaccines. Additionally, Rep. Ron Kind’s (D-WI) bill, the Chronic Wasting Disease Research and Management Act passed the House of Representatives with Bipartisan support and awaits a vote in the Senate. While this is encouraging, more can be done to support scientific research and protect deer herds. If Minnesota wants to lead the United States in solving such a global issue, the bipartisan support exists to help tackle the largest threat to deer hunting in the U.S. and the state.

CWD threatens the state’s large and historic deer hunting tradition. The DNR and the state legislature have the tools at their disposal to impose meaningful reform to combat the spread of “zombie-deer,” so the population can thrive for generations to come.

A New Sheriff in the Wild West: How the Cryptocurrency Industry’s Failure to Neutralize Hacking Threats Has Rendered Federal Regulation a Necessity

February 16, 2022
Administrative Law, Business Law, Cryptocurrency

Dan O’Dea, MJLST Staffer

In today’s financial world, few things are more captivating than the rapidly evolving cryptocurrency space. It has been a wild twelve months for the cryptocurrency industry, and specifically for Bitcoin owners. Bitcoin doubled its value in 2021 and peaked at just over $68,000/coin, only to erase nearly all of those gains when the crypto market crashed in January 2022. The crash was largely prompted by fears that the Federal Reserve would withdraw stimulus from the market by raising interest rates. In the process, the crypto market lost over $1 trillion in market value, and an asset class that many have called a “hedge opportunity” for investors against inflation crashed down with the stock market as a whole.

But extreme market volatility is not the only risk investing in cryptocurrency poses for its some 300 million investors. Hackers and thieves have been wreaking havoc on the Decentralized Finance (De-Fi) industry, with their latest exploit coming in the form of a $320 million theft of Ethereum from Wormhole, one of the most popular bridges linking the blockchains of the popular Ethereum and Solana coins. These blockchains are of great use, as they are capable of developing “smart contracts” to replace banks and lawyers in certain business transactions. Blockchain “bridges” like Wormhole are important facilitators for these contracts. Unfortunately, in the process, bridges like Wormhole have become a target for cyberattacks due to fundamental limits on their security as they house hundreds of millions of dollars of assets in escrow. This latest theft on Wormhole is not even the largest in the De-Fi crypto space’s history, where a $600 million theft from a platform called Poly Network takes the cake. Interestingly, the hacker’s goal in that theft was simply to open a dialogue with the platform about security issues on the blockchain, and ultimately all funds were returned. Attacks have not been limited to the platform level, as smaller-time thieves have turned to phishing scams and SIM Swap schemes (in which an individual misrepresents their identity to your cell phone provider in an effort to intercept dual-factor authentication messages and gain access to your crypto accounts) to steal from individual investors. Unfortunately, victims of the vast majority of cryptocurrency thefts are extremely unlikely to recoup their funds once they have been stolen, due to the anonymity afforded to wallet holders on the blockchain, who in some cases can reveal no identifiable details about themselves while transacting cryptocurrency.

It is important to note that when a cryptocurrency platform loses money, it is not the platform alone that incurs a loss. Rather, the clients whose accounts were pillaged by hackers bear the entire loss, or, if the platform collapses from the theft and liquidators are appointed, every user on the platform will bear the loss to some degree. So what recourse do the victims of cryptocurrency theft have? While Cryptocurrency platforms such as Coinbase attempt to educate users about the types of scams they may encounter, if a theft occurs, victims are usually on their own. While state prosecutor’s offices and federal enforcement agencies like the FBI will investigate and prosecute identifiable criminals, and individual plaintiffs can bring private civil actions against them, the largest challenge faced by victims of cryptocurrency theft is identifying the thieves in the first place. In an effort to identify perpetrators, both the FBI and private parties with deep pockets have begun to contract with private tech firms specializing in tracking down stolen crypto, such as CipherTrace. While working with a crypto-tracking firm gives an aggrieved individual the best chance of tracking down their thieves, it is still unlikely that the parties will ever be identified and funds ever recouped.

Security requirements are far from standardized across the crypto industry—true to its nickname, the “Decentralized Finance” (De-Fi) industry, operates essentially free from regulatory constraints in the United States. The Financial Industry Regulatory Authority (FINRA) has cautioned investors of the risks posed by cryptocurrency investments relating to hacking and volatility, but because the space is not subject to federal securities regulation requirements, investors often enter the world of cryptocurrency investing underinformed as to its true risks. The U.S. Securities and Exchange Commission (SEC) has begun to wade into the fray of regulating cryptocurrency platforms, most recently with the introduction of a proposal that some are calling a “trojan horse” regulatory tool to be wielded against the crypto industry. The proposal contains an expansive definition of the term “treasury platforms” that would likely allow the SEC to issue protocols for cryptocurrency and De-Fi platforms. The trojan horse notwithstanding, the SEC has been vocal about its plans to introduce formal regulatory guidelines and procedures for the cryptocurrency industry in the long term. Even the White House has waded into the crypto regulatory waters, with the Biden administration set to release an executive order designed to create a government-wide strategy to regulate the cryptocurrency industry that could release as soon as mid-February, 2022. The proposal comes on the heels of the FTC’s release of data showing cryptocurrency scams have skyrocketed, and as concern levels over crypto money laundering schemes rise.

While many have scoffed at the idea that the decentralized finance industry should be regulated, it is likely that the prospect of federal regulation actually represents a good thing for a cryptocurrency market that has been referred to as “The Wild West,” and that has drawn comparisons to the late 2000s subprime mortgage market. Federal regulation of the cryptocurrency industry will prompt new protocols for its platforms designed to enhance risk disclosures made to prospective crypto investors and strengthen the security measures protecting investments. Further, regulation is likely to prompt registration and reporting requirements that will make it easier to catch crypto thieves by providing greater information to law enforcement agencies. The crypto industry continues to prove it cannot protect itself from the threat of hacking, and investors are largely bearing the costs of these failures. Just as the SEC stepped in to protect investors from being burned by highly speculative and worthless securities in the 1930s, aiding its regulatory hand to the cryptocurrency industry in a non-burdensome manner should again provide investors with a new set of protections in 2022.

The Mysterious Disappearance of Deference: What Is the Supreme Court’s Current Relationship to Federal Agencies?

February 7, 2022
Administrative Law, Biotechnology, Copyrights, Ethics

Carly Michaud, MJLST Staffer

The Supreme Court has had no shortage of administrative law cases in the (possibly) final sessions of one of the Court’s administrative law scholars, Justice Stephen Breyer. Yet, Breyer has found himself and his ideological compatriots in the opposition on the topic in which he situates his expertise. In the recent case regarding OSHA’s ability to require COVID-19 vaccines, Breyer’s dissent repeated discusses the proper deference an agency’s determination should be given by the Supreme Court.

Notably absent from the case is any mention of the previous key to the relationship between the courts and federal agencies: Chevron deference. In fact, Chevron U.S.A., Inc. v. National Resources Defense Council, was, (as of a 2014 analysis in the Yale Journal on Regulation) the “Most Cited Supreme Court Administrative Law decision”. While previously considered a niche area, administrative law is now so ubiquitous in practice that as of July 2021, 55 law schools require students take a course in administrative law or one of its mainstays: legislation or statutory interpretation.

In spite of this, Chevron appears nowhere in the discussion of OSHA’s vaccine mandate, nor in the court’s earlier revocation of the CDC’s eviction moratorium. This absence suggests that perhaps this Court has become a body of health experts, relying on their own understanding of COVID-19 to determine whether these agency-created regulations are effective in their mission. Both cases center on whether an agency action to prevent the spread of COVID-19 is within the purview of their empowering statute, and, despite the broad statutory authorities of these agencies to protect the health of Americans, both actions were deemed beyond that authority.

But back to Chevron, has it been abandoned as a standard? Not yet, although there was some discussion of this proposition during the oral argument of American Hospital Association v. Becerra last November. The Court has not released an opinion yet on this case, however the Court of Appeals had previously upheld HHS’s ability to set reembursement rates, per its statutory authority.

In a final thrust of irony, the death knell for Chevron deference may come from a case challenging the very statute and the very agency whose decision-making was at issue in Chevron: the EPA and the Clean Air Act. This is particularly ironic as the EPA administrator whose decision-making was being challenged in Chevron was Anne Gorsuch, the mother of Supreme Court justice and noted antagonist of agency authority: Neil Gorsuch. Yes, in a tale mirroring Hamlet, Neil Gorsuch seems determined to destroy the administrative state that had entangled his mother in various administrative scandals. The latest edition of this showdown between the Gorsuchs and EPA is scheduled for Monday February 28, which will see the Supreme Court hearing arguments in West Virginia v. EPA and its consolidated cases.

This behavior by the Court belies a grave concern both about the continued disempowerment of federal agencies—which have been empowered directly by Congress—at the hands of the unelected judiciary. Further, the most cynical of us may see this as a direct assault on the authority of agencies that some justices may politically disagree with, further disregarding the knowledge of learned experts to push their own political agendas.

Holy Crap: The First Amendment, Septic Systems, and the Strict Scrutiny Standard in Land Use Law

December 22, 2021
Administrative Law, Constitutional Law, Discrimination, Environmental Law, First Amendment

Sarah Bauer, MJLST Staffer

In the Summer of 2021, the U.S. Supreme Court released a bevy of decisions favoring religious freedom. Among these was Mast v. City of Fillmore, a case about, well, septic systems and the First Amendment. But Mast is about so much more than that: it showcases the Court’s commitment to free exercise in a variety of contexts and Justice Gorsuch as a champion of Western sensibilities. It also demonstrates that moving forward, the government is going to need work harder to support that its compelling interest in land use regulation trumps an individual’s free exercise rights.

The Facts of Mast

To understand how septic systems and the First Amendment can even exist in the same sentence, it’s important to know the facts of Mast. In the state of Minnesota, the Pollution Control Agency (MPCA) is responsible for maintaining water quality. It promulgates regulations accordingly, then local governments adopt those regulations into ordinances. Among those are prescriptive regulations about wastewater treatment. At issue is one such ordinance adopted by Fillmore County, Minnesota, that requires most homes to have a modern septic system for the disposal of gray water.

The plaintiffs in the case are Swartzentruber Amish. They sought a religious exemption from the ordinance, saying that their religion forbade the use of that technology. The MPCA instead demanded the installation of the modern system under threat of criminal penalty, civil fines, and eviction from their farms. When the MPCA rejected a low-tech alternative offered by the plaintiffs, a mulch basin system not uncommon in other states, the Amish sought relief on grounds that the ordinance violated the Religious Land Use and Institutionalized Persons Act (RLUIPA). After losing the battle in state courts, the Mast plaintiffs took it to the Supreme Court, where the case was decided in their favor last summer.

The First Amendment and Strict Scrutiny

Mast’s issue is a land use remix of Fulton v. City of Philadelphia, another free exercise case from the same docket. Fulton, the more controversial and well-known of the two, involved the City of Philadelphia’s decision to discontinue contracts with Catholic Social Services (CSS) for placement of children in foster homes. The City said that CSS’s refusal to place children with same-sex couples violated a non-discrimination provision in both the contract and the non-discrimination requirements of the citywide Fair Practices Ordinance. The Supreme Court didn’t buy it, holding instead that the City’s policy impermissibly burdened CSS’s free exercise of religion.

The Fulton decision was important for refining the legal analysis and standards when a law burdens free exercise of religion. First, if a law incidentally burdens religion but is both 1) neutral and 2) generally applicable, then courts will not ordinarily apply a strict scrutiny standard on review. If one of those elements is not met, courts will apply strict scrutiny, and the government will need to show that the law 1) advances a compelling interest and 2) is narrowly tailored to achieve those interests. The trick to strict scrutiny is this: the government’s compelling interest in denying an exception needs to apply specifically to those requesting the religious exception. A law examined under strict scrutiny will not survive if the State only asserts that it has a compelling interest in enforcing its laws generally.

Strict Scrutiny, RLUIPA, and Mast

The Mast Plaintiffs sought relief under RLUIPA. RLUIPA isn’t just a contender for Congress’s “Most Difficult to Pronounce Acronym” Award. It’s a choice legal weapon for those claiming that a land use regulation restricts free exercise of religion. The strict scrutiny standard is built into RLUIPA, meaning that courts skip straight to the question of whether 1) the government had a compelling government interest, and 2) whether the rule was the least restrictive means of furthering that compelling government interest. And now, post-Fulton, that first inquiry involves looking at whether the government had a compelling interest in denying an exception specifically as it applies to plaintiffs.

So that is how we end up with septic systems and the First Amendment in the same case. The Amish sued under RLUIPA, the Court applied strict scrutiny, and the government failed to show that it had a compelling interest in denying the Amish an exception to the rule that they needed to install a septic system for their gray water. Particularly convincing at least from Coloradan Justice Gorsuch’s perspective, were the facts that 1) Minnesota law allowed exemptions to campers and outdoorsman, 2) other jurisdictions allowed for gray water disposal in the same alternative manner suggested by the plaintiffs, and 3) the government couldn’t show that the alternative method wouldn’t effectively filter the water.

So what does this ultimately mean for land use regulation? It means that in the niche area of RLUIPA litigation, religious groups have a stronger strict scrutiny standard to lean on, forcing governments to present more evidence justifying a refusal to extend religious exemptions. And government can’t bypass the standard by making regulations more “generally applicable,” for example by removing exemptions for campers. Strict scrutiny still applies under RLUIPA, and governments are stuck with it, resulting in a possible windfall of exceptions for the religious.

Employee Vaccine Mandates: So, Are We Doing This?

November 23, 2021
Administrative Law, Employment Law

Kristin Thompson, MJLST Staffer

Rewind to the beginning of September. President Biden had just announced a generalized plan for addressing the alarmingly slow rise in vaccination rates in the United States. His disposition was serious as he pleaded with the American public to go out and get vaccinated. During this address he laid out several different measures that, conceivably, would lead to a higher national vaccination rate. Included in this plan was a vaccine requirement for all federal employees and government contractors. This sanction did not come as much of a surprise, as federal employees had previously been asked to provide proof of vaccination to avoid stringent safety protocols in the workplace. What was surprising, however, was President Biden’s plea to the Department of Labor to develop a federal vaccine mandate or required weekly COVID testing for private companies employing more than one hundred employees.

In the wake of this announcement came many different responses. On the one hand there were some private U.S. companies already enforcing vaccine policies who seemed unrattled by a potential new federal mandate, and there were some companies who viewed it as a welcome opportunity to implement a vaccine policy by means of a third-party enforcer. On the other hand there were companies who loathe any type of government interference in their business activity and policy implementation, and those who have been specifically opposed to a vaccine requirement and may have even made promises to their employees saying as much. Those companies who opposed a vaccine mandate, in light of this plea from President Biden, had to start making strategic decisions on how they would move forward if the Department of Labor heeded the president’s request.

The questions that came following President Biden’s address were the same regardless of the company’s personal view. Would a federal mandate be legal, would it be constitutional, and would it ever come? This uncertainty hung in the air while private companies, those with 101 employees and 5,000 employees alike, began to prepare. Draft mandatory vaccine policies were made, legal counsel was requested, and employees were advised. Now all that was left to do was wait for the Department of Labor’s cue.

Fast-forward to November. The Department of Labor’s Occupational Safety and Health Administration (OSHA) released an emergency temporary standard (ETS) in line with President Biden’s plan. The goal of this standard being “to minimize the risk of COVID-19 transmission in the workplace,” and to “protect unvaccinated employees of large workplaces.” This standard mandates that all employers with more than 100 employees, including private companies, must require their employees get vaccinated or undergo weekly COVID tests and wear face masks while at work. The standard does not apply to remote workers, workers who predominantly work outside, or employees who work without other co-workers present.

The questions that arose after the ETS was announced were similar to those asked by companies directly after President Biden’s address. Is this ETS legal, is it constitutional, and when will we have to be in compliance? The last question seems to be easily answered; all requirements except weekly testing for unvaccinated employees must be met by December 6th, 2021. The weekly testing policy for unvaccinated employees must begin by January 6th, 2022. However, the immediate onslaught of lawsuits attempting to prevent the ETS have made these straightforward dates seem somewhat arbitrary. Companies now face a unique set of issues prompting even more, new, questions. Do we actually have to be in compliance by December 5th? What effect will these lawsuits have on the ETS? Are we just supposed to wait and see?

Legally, the situation private companies face is complex. As of November 12th, the Fifth Circuit had issued and subsequently reaffirmed a stay on the standard, meaning companies did not have to comply with the mandate. At that time, the Fifth Circuit was the only court that had issued a stay, although there were lawsuits pending in eleven of the twelve circuit courts. What complicated this Fifth Circuit determination was the question of whether or not it covered all U.S. companies; if your company is based in another Circuits’ jurisdiction was this Fifth Circuit stay relevant? The current ruling enjoins OSHA from enforcing the ETS, so while the Fifth Circuit did not write on whether their holding extended outside of their jurisdiction, its practical effect was, and is, felt everywhere. So then, what comes next? How long will this stay last, and who should private companies be looking to in planning their next move?

The Fifth Circuits’ stay will last until one of two things occur. The first is multidistrict litigation, where all outstanding lawsuits brought against the ETS will be combined, and one decision will be rendered by the Circuit Court on whether or not the stay shall be enforced. The first step of this process has already begun; on Tuesday November 16th the Sixth Circuit Court was chosen via a lottery process to preside over the multidistrict litigation. The Sixth Court is based in Cincinnati, Ohio and typically leans conservative. While this proclivity does not necessarily mean that the ETS is doomed, it does suggest that President Biden may ask the Supreme Court to take over the case, preferring the Supreme Court Justices over the Sixth Circuit’s judges. This introduces the second way the stay may be addressed, by a Supreme Court ruling. This alternative can be triggered by either a plea from the federal government directly asking the Court to end the Fifth Circuits’ stay, or via an independent decision by the Supreme Court to pluck this consolidated lawsuit out the Sixth Circuits’ hands.

However, if the Supreme Court is not called upon and chooses not to pull the case up on their own, the Sixth Circuit will have the authority to either end, modify, or extend the Fifth Circuits’ current stay on the ETS. This leaves companies with a choice; will they wait and see how the Sixth Circuit, or maybe even the Supreme Court, rules on the stay? Will they wait to see if the stay is extended and the deadline for compliance is pushed back, or will they start implanting the mandate now in the event that the stay is extinguished and December 5th compliance is reinstated?

There is a chance that an extended stay will allow these companies to push off vaccine mandates. There is also a chance that the stay will be terminated before December 5th and all original compliance deadlines will be the same. Both of these alternatives are further complicated when paired with the uncertainty surrounding timing. If a company decides to run the risk and hope for an extended stay, and the Sixth Circuit court issues a retraction of the stay on December 3rd, companies may still be forced to observe the December 5th compliance date. However, if they decide to comply right now and the stay is extended, they may regret acting so quickly. In the end the mass amount of uncertainty surrounding the ETS and resulting litigation is creating many tough decisions for private employers. While the choice to comply with OSHA’s currently suspended ETS may not be mandatory right now, it’s obvious that a failure to act may put them far behind schedule for creating and implanting an effective vaccine mandate policy. That failure to act has the potential to end in high OSHA fines as well as general pushback from the public. In the end the decision on how to treat this paused ETS is up to each individual company, as will be any consequences stemming from that choice.

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