Topic: Regulatory Studies

Pool Closed Until Further Notice

Tomorrow is a deadline that looms large for worried pool operators at hotels and public recreation facilities across the country, as USA Today reports:

Hoteliers must have pool lifts to provide disabled people equal access to pools and whirlpools, or at least have a plan in place to acquire a lift. If they don’t, they face possible civil penalties of as much as $55,000.

As Conn Carroll at the Washington Examiner explains, the mandate has taken an even more irrational form than might have been expected. Because the elevator lifts are space-consuming, unsightly, potential hazards to curious children, and unlikely to be used very often, many pool operators assumed it would be enough to purchase a portable lift that could be wheeled over to poolside on user request and stored when not in use. No such luck: the Obama administration has announced that the lifts must not only be of permanent construction, but must apply to each separate “water feature”, so that a pool with adjoining spa would need two of them. “Each lift costs between $3,000 and $10,000 and installation can add $5,000 to $10,000 to the total.” Many budget hostelries are expected to simply shutter their pools until further notice rather than take the risk that entrepreneurial fast-buck artists will begin filing complaints against them for cash settlements, as in California’s notorious ADA filing mills.

I think Carroll probably goes too far when he suggests that the Obama administration made the rules unreasonable in order to give its friends in the ADA bar more litigation to file. The problem is more that this administration (and not just this one) has outsourced its thinking on the law to advocates in the legal academia-disabled rights-“public interest law” community, which tends to embrace interpretations and applications of the law geared to advance ambitious versions of social change. In the pool case, the federal appointee in charge (according to this blog post) was Samuel Bagenstos, who after his stint in the Obama Justice Department has now returned to legal academia, where he is perhaps the leading proponent of expansive ADA interpretation. (His view of abusive ADA suits – he puts the term “abusive” in quotation marks – is here.) Academia’s other best-known advocate of an expansively interpreted ADA (and a drafter of the law) is Chai Feldblum of Georgetown Law, who serves the Obama administration as head of the Equal Employment Opportunity Commission.

Don’t look to Republicans for relief on this. The Bush administrations both pere et fils were consistently wretched on it, and a large bloc of GOP members of Congress predictably joins the Democrats in opposing legislative ideas for even modest rollback of the ADA’s most extreme applications.

You Keep Using the Word ‘Affordable.’ I Do Not Think It Means What You Think It Means.

The federal government gave a $10 million “affordability” prize to a giant corporation for manufacturing a $50 lightbulb. The Washington Post:

The U.S. government last year announced a $10 million award…for any manufacturer that could create a “green” but affordable light bulb.

Energy Secretary Steven Chu said the prize would spur industry to offer the costly bulbs…at prices “affordable for American families.”…

Now the winning bulb is on the market.

The price is $50.

Retailers said the bulb, made by Philips, is likely to be too pricey to have broad appeal. Similar LED bulbs are less than half the cost.

This is the same federal government that refers to ObamaCare, which costs more than $6 trillion, as the “Affordable Care Act.”

Why Is Massachusetts Trying to Ban Truthful Information About Hedge Funds?

The Massachusetts Uniform Securities Act prohibits general solicitation and advertising by anyone offering unregistered securities, ostensibly for the purpose of furthering state and federal disclosure schemes. Yet this ban on public communications has been applied so broadly that it has undermined those purported disclosure goals.  For instance, the ban has prevented individuals who have no interest in investing in any security – such as journalists, academics, students, and others who are not wealthy or financially sophisticated – from receiving truthful, non-misleading information about hedge funds.

In Bulldog Investors v. Massachusetts, an investment company maintained an interactive website that provided information about its products. Because Bulldog was not registered in Massachusetts, however, the State filed an administrative action against the firm, demanding it take down its online content.

In response, Bulldog joined a group of other firms and individuals – including some who have no interest in investing but wish to read the website information – in a lawsuit claiming that the Massachusetts ban violates their First Amendment rights. The Supreme Judicial Court of Massachusetts upheld the ban, so the plaintiffs have asked the U.S. Supreme Court to take the case.

Cato, along with the Competitive Enterprise Institute and a group of journalists and academics, has now filed an amicus brief supporting that request and arguing that the Massachusetts law is an unconstitutional ban on free speech. We show that the state’s claim that the ban furthers a larger federal regulatory scheme ignores the judgment of many federal officials (from both parties) who have concluded that such bans undermine these goals.

The state’s alleged disclosure interest is just a pretext for coercing companies to register in Massachusetts, and is therefore an unconstitutional attempt at circumventing federal preemption. But even if the ban furthers a legitimate state interest, it is so broad that it is has substantially chilled both truthful, non-misleading commercial speech and noncommercial speech alike.

A law so repugnant to the First Amendment cannot stand.

Here Come the Disabled-Employee Quotas

I’ve got a new op-ed in the Daily Caller about one of the most significant employment-law initiatives out of Washington in years (also reported on by Melanie Trottman in today’s WSJ): the Obama administration is preparing to order federal contractors to comply with a quota (sorry, “required…hiring goal”) of disabled employees, perhaps as high as 7 percent. Businesses have flooded the Regulations.gov comments site with negative reactions to the idea, but to no seeming avail. As I explain, one of the scheme’s maddening aspects is that you’re supposed to achieve the quota even though you’re not allowed to ask employees whether or not they’re disabled:

So the rules contemplate a fan dance of “invited self-identification” in which workers are given repeated chances at successive stages of the hiring process to announce that they are disabled. Unfortunately for quota compliance, even after getting the job an employee may be too shy to offer such a self-identification, which means the employer may lose any “credit” for the hire. Perhaps equally frustrating, an employee hired with the quota in mind may turn out not to have any disability at all (“Dang it! And she looked so disabled!”).

The employment provisions of the Americans with Disabilities Act (ADA) and its associated Rehabilitation Act are already rife with absurd results. Last week, after a Colorado school bus driver who hit three middle school students turned out to have been hired though recently in rehab, a spokesman for the school district explained that the law was at work: “It is illegal under state and federal disability laws to deny employment solely on the basis of a history of treatment for alcohol or substance abuse.” Non-discrimination against school bus drivers with a taste for booze is bizarre enough, but not bizarre enough for Washington. Time for preference!

There Is No Objective Definition of ‘Medical Necessity’

California regulators are coming down on Kaiser Permanente. According to HealthLeaders Media, the regulators reviewed a batch of coverage denials and “found that in excess of 75% of the cases the services indeed were medically necessary, and 10% were not.” Indeed?

Now seems like a good time to post what University of Tennessee law professor Haavi Morreim wrote about “The Futility of Medical Necessity“ in Regulation:

Clinical artificiality The ill fit between “necessity” and ordinary medical care is immediately obvious in the question facetiously bandied about when health plans first considered what to do about a recently approved drug for male impotence: How often per month (per week? per day?) is drug-assisted sexual intercourse “medically necessary”?

As typified by that case, most medical decisions do not post clear choices of life versus death, nor juxtapose complete cures against pure quackery. Rather, the daily stuff of medicine is a continuum requiring a constant weighing of uncertainties and values. One antibiotic regimen may be medically comparable to and much less expensive than another, but with slightly higher risk of damage to hearing or to organs like kidneys or liver. For a patient needing hip replacement, one prosthetic joint may be longer-lasting but far costlier than an alternative. Of two equally effective drugs for hypertension, the costlier one may be more palatable because it has fewer side effects and a convenient once-a-day dosage.

Across such choices, it is artificially precise to say that one option is “necessary” — with the usual connotation of “essential” or “indispensable” – while the other is “unnecessary” — with the usual connotation of “superfluous” or “pointless.” Various options have merits, and often no single approach is the clear, “correct” choice. A given option might be better described as “a good idea in this case,” “reasonable, given the cost of the alternative,” “probably better than the alternative, given a specific goal,” “about as good as anything else,” or “not quite ideal, but still acceptable.”

In many cases, the real question is whether a particular medical risk or monetary cost is worth incurring in order to achieve a desired level of symptomatic relief or functional improvement, or to reduce the risk of an adverse outcome or a missed diagnosis. A huge array of treatments fits that description: more or less worthwhile, but the patient will not die without it and other alternatives (that might have some drawbacks) exist. [Emphasis mine.]

More broadly, concepts like necessity, appropriateness, and effectiveness can only be defined relative to a goal. For example, antibiotics are not clinically effective for all illnesses; they are effective against bacteria but, barring placebo effect, they are ineffective against viruses. Hence, it makes no sense for a physician to prescribe antibiotics to eradicate a viral infection. However, if the goal is to placate a relentlessly demanding patient who insists on antibiotics for his viral infection, the prescription may indeed serve that latter aim – which is probably why so many physicians write so many antibiotic prescriptions for viral illnesses.

Choices in this realm require a level of clinical complexity that is not reflected in simplistic notions like necessity, and that should not be hidden under blanket categories connoting a façade of precision. It would be far better to acknowledge that, across a broad spectrum of such choices and trade-offs, it is legitimate for people to come to different conclusions about what sort of price is worth paying, medically and financially, to achieve specific goals. To presume that a medical intervention is objectively either necessary or unnecessary belies the legitimacy of such variation in human goals and values.

So the question becomes: who will do a better job of deciding whether and when hip replacements or antibiotics or Viagra are “medically necessary?” Regulators? Or patients choosing health plans (in part) based on how those plans define medical necessity?

HuffPo Oped: ‘The Illiberality of ObamaCare’

My latest:

On Friday, President Obama tried to quell the uproar over his ongoing effort to force Catholics (and everyone else) to pay for contraceptives, sterilization, and pharmaceutical abortions. Unfortunately, the non-compromise he floated does not reduce by one penny the amount of money he would force Catholics to spend on those items. Worse, this mandate is just one manifestation of how the president’s health care law will grind up the freedom of every American.

Pool Grants, Federalism, and the Wellsprings of Government Growth

As part of a 2007 law, Congress decreed the establishment of a new federal program to dangle grants in front of states that agree to enact more stringent laws on swimming pool safety. According to Consumer Product Safety Commissioner Nancy Nord, however, the multi-million-dollar pot Congress has set aside for this purpose has sat unused: “not one state has applied for a grant and not one dollar has been disbursed, despite changes made to improve the program. We will soon have paid CDC [the Centers for Disease Control] almost half a million dollars to administer a grant program with no takers.”

What do you think the odds are that lawmakers will learn from the experience and do away with the grant program? Contrariwise, what do you think the odds are that someone on Capitol Hill right now is preparing to argue that if no states have applied for grants, the amounts on offer must be too low, and new lawmaking is needed to provide for bigger subventions?

In all seriousness, this forlorn little program is a tiny and failed example of a genre of federal initiative that all too often enjoys success: using federal tax dollars to bribe states and localities into raising spending and extending regulation. The proliferation of such programs helps explain why the earlier and sounder idea of federalism – which saw the national and state governments as checking each others’ overweening powers – has given way to a spirit of mutual enablement (“cooperative federalism”) at the expense of the citizenry and its freedom. Thus the Obama administration, realizing that public opinion is not yet ready for a federal-level campaign to demonize fattening and salty foods, is happy to drop millions of dollars on local governments like Mayor Bloomberg’s in New York City to do exactly that. And for decades Congress has been creating programs subsidizing local hiring of teachers, police officers and other public employees – with the presumably unintended result of saddling localities with unsustainable payrolls and pension obligations when times turn tough.

Our friend Michael Greve has a new book out called The Upside-Down Constitution exploring how coordination between once-rival levels of government has been turned into an engine of growth for the leviathan state. You can read more about it here, here, and here at Liberty Fund’s Library of Law and Liberty site. Relatedly, Greve points out in this post something worth keeping in mind: federalism is a structure, not a balance.