Among the foremost threats to individual freedom in America is the abusive and oftentimes lawless behavior…
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More Legal Shenanigans from the Biden Administration’s Department of Education

Among the foremost threats to individual freedom in America is the abusive and oftentimes lawless behavior of federal administrative agencies, whose vast armies of overpaid bureaucrats remain unaccountable for their excesses.

Among the most familiar examples of that bureaucratic abuse is the Department of Education (DOE).  Recall, for instance, the United States Supreme Court’s humiliating rebuke last year of the Biden DOE’s effort to shift hundreds of billions of dollars of student debt from the people who actually owed them onto the backs of American taxpayers.

Even now, despite that rebuke, the Biden DOE launched an alternative scheme last month in an end-around effort to achieve that same result.

Well, the Biden DOE is now attempting to shift tens of millions of dollars of…[more]

March 19, 2024 • 08:35 AM

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Another Embarrassing Judicial Defeat for the Obama Administration Print
By Timothy H. Lee
Thursday, September 12 2013
The SEC’s debacle stems from a misguided interpretation of Dodd-Frank, coupled with an attempt to conduct social engineering abroad.

“The Commission fundamentally miscalculated the scope of its discretion.” 

These days, it seems the only thing rougher on Barack Obama than Russian President Vladimir Putin is our own judicial branch. 

The quote above came from the written opinion of federal Judge John D. Bates, in vacating a Securities and Exchange Commission (SEC) rule forcing U.S. energy companies to surrender confidential proprietary information to foreign competitors.  All in the name of international redistribution of wealth and Dodd-Frank. 

Just last month, we highlighted two humiliating new court setbacks for the Obama Nuclear Regulatory Commission and Equal Employment Opportunity Commission, which had ignored plain statutory mandates out of policy disagreements with Congress.  Since then, things have only gotten worse for the Administration. 

At the U.S. Court of Appeals for the D.C. Circuit, effectively the nation’s second-highest court, judges gave a rude reception to the Obama Federal Communications Commission’s (FCC) “Net Neutrality” campaign to regulate the Internet.  Just three years ago, that very same court ruled unanimously that the FCC exceeded its power in claiming authority to regulate Internet service providers.  Yet here we are again, with the FCC attempting a legal end-run scheme to impose the same regulations.  The judges seemed unamused in their line of questioning, suggesting yet another rebuke is on the way. 

Such abuse of federal resources belies the administration’s plea of poverty in demanding even higher taxes and more spending. 

Over at the SEC, meanwhile, Judge Bates’s judicial rebuke is forcing a similar recalibration. 

The SEC’s debacle stems from a misguided interpretation of Dodd-Frank, coupled with an attempt to conduct social engineering abroad.  The regulation in question would have forced domestic energy companies to publicize information relating to overseas exploration and drilling activities.  The Obama Administration sought to address what officials label the “resource curse” in which income in resource-rich nations allegedly flowed disproportionately to favored bureaucrats and coddled classes rather than to poor citizens.  Reasonable people can debate the merits of that goal, but the problem is that Congress never statutorily required U.S. companies to make their proprietary data public. 

Specifically, the SEC’s proposed regulation would have suddenly forced American energy companies to disclose sensitive information like valuations and expected rates of return on various projects, while foreign competitors would remain under no such obligation. 

In other words, it would be like handing the opposing team your playbook.  “Nobody intended for each company to divulge its basic playbook country-by-country, project-by-project, year-by-year,” said U.S. Chamber of Commerce Energy Institute President Karen Harbert.  Or as summarized by American Petroleum Institute President Jack Gerard, “All your competitors will know what your standards are, they will know what to do to beat you.” 

Keep in mind that many of those competitor energy companies are state-owned, including many governments hostile to the U.S.  None of them would be under the same crippling SEC obligation. 

Domestic energy industry representatives were even willing to compromise, asking that disclosure only be required at the country or even province level.  But the SEC demanded the surrender of information at the specific project level, and even refused to grant exemptions where foreign governments prohibited disclosures of that sort. 

Making matters worse, the SEC even admitted that compliance with its proposed regulation would cost domestic energy companies approximately $1 billion at the outset, and somewhere between $200 million and $400 million every single year.  Moreover, even that punishing cost doesn’t include instances where companies would have to cease operations in nations whose governments prohibited the disclosures that the SEC demanded. 

Fortunately, Judge Bates was having none of it.  He labeled the SEC’s regulation “arbitrary and capricious,” and ruled that it “offers no persuasive arguments that the statute unambiguously requires public disclosure of the full reports.” 

At least publicly, the SEC accepted defeat and pledged compliance.  “The Court remanded the matter for further SEC proceedings, which the Commission will undertake, informed by the Court’s decision,” according to spokesman John Nester. 

Given the Obama Administration’s behavior to date, however, we can probably expect the same SEC to be back before the same court making the same argument and suffering the same rebuke down the road. 

All the while, the Administration will continue to insist that it supports energy independence, job creation and American economic preeminence in a period of increasing international competition.  The facts and the needless series of judicial rebukes prove otherwise. 

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