Biden administration faces onslaught of lawsuits as business groups claim regulatory overreach

WASHINGTON
—
When
the
Federal
Trade
Commission

finalized
a
rule
earlier
this
month
banning
noncompete
clauses,
the
blowback
was
swift:
Within
24
hours,
the
U.S.
Chamber
of
Commerce
led
a
handful
of
business
groups
to

file
a
lawsuit
seeking
to
block
the
ban.
They
argued
that
the
FTC
lacked
the
authority
to
impose
it
in
the
first
place.

The
playbook
is
becoming
a
familiar
one:
The
Biden
administration
finalizes
a
new
rule
regulating
business,
and
the
Chamber
and
industry
lobbying
groups
immediately
sue
to
stop
it
by
arguing
that
the
agency
has
overstepped
its
authority.

So
far
this
year,
the
administration
has
finalized
seven
rules,
addressing
such
areas
as

independent
contractors,
credit
card

late
fees
and

climate
disclosure
requirements,
only
to
see
them
met
with
near-immediate
lawsuits
by
the
Chamber
and
other
groups.

The
Chamber
said
it
expects
to
file
a
total
of
at
least
22
lawsuits
against
the
Biden
administration
before
the
end
of
President
Joe
Biden’s
current
term.
That’s
a
dramatic
increase
from
the
number
of
suits
it
filed
against
two
previous
administrations
—
three
against
the
Trump
administration
and
15
during
Obama’s
first
term,
according
to
the
Chamber.

The
American
Bankers
Association,
another
influential
lobbying
group
in
Washington,
said
it
has
signed
on
to
four
lawsuits
against
banking
regulators
since
September
2022
and
that
it
had
not
signed
on
to
any
legal
challenges
to
banking
regulators
for
about
a
decade
before
that.

Officials
at
both
the
Chamber
and
the
ABA
said
litigation
is
always
a
last
resort.
But
they
see
it
as
a
necessary
step
when
agencies
issue
regulations
that
the
organizations
see
as
outside
the
scope
of
their
authority.

“We
are
fully
confident
these
agencies
are
acting
within
their
authorities,”
White
House
assistant
press
secretary
Michael
Kikukawa
said
in
a
statement
to
CNBC. “These
rules
help
American
workers
and
families
by
increasing
wages,
lowering
costs,
saving
lives,
and
building
a
fairer
economy.”

“It’s
not
just
about
a
single
regulation,
right?”
Neil
Bradley,
executive
vice
president
at
the
Chamber,
said
in
an
interview
with
CNBC. “It’s
about
the
1,000
regulations
that
are
going
to
go
final
this
year.
It’s
about
the
200-plus
regulations
that
have
an
economic
impact
of
more
than
$200
million
a
year.”

“We
went
from
a
time
when
we
would
argue
about
a
particular
regulation,”
Bradley
said, “to
a
period
where
the
concern
is
about
the
direction
as
a
whole.”

Total
private-sector
regulations
have
been
increasing
under
Biden,
according
to
one
metric
from
George
Mason
University
—
especially
compared
with
the
Trump
administration,
during
which
they
stayed
more
or
less
flat. 

But
Patrick
McLaughlin,
director
of
policy
analytics
at
George
Mason’s
free-market,
libertarian
Mercatus
Center
think
tank,
who
created
the
metric,
said
the
nature
of
Biden’s
regulations
is
more
notable
than
the
volume.

The
Biden
administration,
in
McLaughlin’s
view,
has
been “expansive
in
their
interpretation
of
authorizing
statutes.”

“The
Chamber
and
others
see
an
opportunity
to
push
back
on
regulations
that,
in
their
view,
are
going
beyond
what
Congress
authorized,”
McLaughlin
said.

The
specific
targets
of
the
lawsuits
have
been
varied:
The
Chamber
has
already
sued
a
dozen
agencies
under
the
Biden
administration,
compared
with
just
four
agencies
under
Obama,
according
to
a
spokesperson.
Despite
the
range
of
issues
at
play,
the
group’s
arguments
largely
center
on
the
claim
that
agencies
are
seeking
to
set
rules
in
areas
that
can
only
be
addressed
by
Congress. 

Even
before
the
FTC
issued
its
ban
on
noncompete
clauses,
for
example,
the
Chamber
pledged
to
take
FTC
Chair
Lina
Khan
to
court
over
it,
regardless
of
the
specifics.

“She
might
come
up
with
a
policy
that
we
would
actually
agree
with
on
substance,”
Bradley
said
of
Khan
before
the
final
rule
was
released. “But
the
precedent
of
that
authority
is
unacceptable.”

The
Biden
administration
says
the
focus
with
all
of
its
regulations
is
on
protecting
consumers
and
saving
them
money.
Administration
estimates
show
that
the
FTC’s
noncompete
ban
will
boost
wages
by
at
least
$400
billion
over
the
next
decade.

The
administration
also
estimates
that
the
Consumer
Financial
Protection
Bureau’s
move
to
slash
credit
card
late
fees
will
save
45
million
Americans
$220
per
year,
and
the
Environmental
Protection
Agency’s
air-quality
rule
will
yield
up
to
$46
billion
in
net
health
benefits
in
2032.

Regulation
critics
also
argue
that
the
Biden
administration
has
not
been
appropriately
following
the
rulemaking
process,
in
part
by
failing
to
incorporate
viewpoints
from
stakeholders
as
part
of
the
final
regulation.

“When
they
insist
on
finalizing
rules
that
fall
outside
their
regulatory
purview,
and
when
they
ignore
constructive
feedback
from
banks
and
other
stakeholders,
litigation
is
the
only
remaining
tool
in
our
toolbox,”
ABA
President
and
CEO
Rob
Nichols
said
at
the
group’s
Washington
Summit
in
mid-March. “It’s
not
a
tool
we
want
to
use,
but
it’s
one
we
will
continue
to
strategically
wield
as
needed.”

Complying
with
regulations
by
definition
comes
with
costs
that
fall
on
companies.
And
rules
that
shift
depending
on
who
occupies
the
White
House
—
while
hardly
a
new
dilemma
—
can
still
create
uncertainty
businesses
would
prefer
to
do
without.

“If
you
make
an
investment
in
one
thing,
are
you
going
to
find
out
that
there’s
some
obscure
regulation
that
you
were
unaware
of,
that
would
suddenly
decrease
the
value
of
that
investment?”
asked
McLaughlin,
of
the
Mercatus
Center. “Or
make
you
stop
being
able
to
produce
it
altogether?”