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Focus on Regulation

Administrative Court stands firm on the “sufficient interest” test

The Administrative Court’s decision in R (O) v Secretary of State for International Development [2014] EWHC 2371 (Admin) – handed down in the midst of fierce debate over the Government’s proposed reforms of judicial review via the Criminal Justice and Courts Bill – provides a useful restatement of the principles applicable to the question of standing in judicial review.

The claimant in O claimed to have been a victim of human rights abuses in Ethiopia as a result of a programme known as “villagisation”, said to involve the forced relocation of individuals from their place of residence.  He further alleged that the defendant Secretary of State had partly funded those human rights violations through development money provided to the Ethiopian Government.  It was further argued that the Secretary of State had acted unlawfully in failing properly to apply her own policy, which provided that the making of development payments should be reconsidered where the recipient country acted in violation of human rights.

In its acknowledgment of service and summary grounds of resistance, the defendant argued that the claimant lacked standing to bring the claim, and that permission should be refused on that basis.  Having considered the case on the papers, Nicola Davies J ordered that the question of permission be decided at an oral hearing.

In his judgment granting the claimant permission to proceed with his claim, Warby J set out the well-known principles applicable to standing in judicial review – principles that were, until recently, under threat as part of the sweeping “Grayling Reforms”.  Section 31 of the Senior Courts Act 1981, the Judge recalled, provides that an applicant for judicial review must have “sufficient interest in the matter to which the claim relates“.  That test has been liberally interpreted by the courts, in particular in two recent Scottish cases in the Supreme Court: AXA General Insurance Limited & Ors v HM Advocate & Ors [2011] UKSC 46 and Walton v The Scottish Ministers [2012] UKSC 44.

Accepting those cases as “the latest word” on standing, Warby J rejected counsel for the defendant’s submission that a stricter test – requiring the claimant to be “affected in some identifiable way” – should apply.  From the Scottish cases, the Judge said, the following three principles could be derived:

  • a restrictive approach that treats judicial review as a means of addressing individual grievances should be avoided;
  • the concept of “sufficient interest” is elastic and depends upon context; and
  • a “busybody” will not have standing, but a claimant need not demonstrate a personal interest if acting in the public interest and can genuinely say that the issue directly affects the section of the public that he seeks to represent.

Applying those principles, the Judge concluded that the claimant had a sufficient interest, and therefore standing, to bring his claim for judicial review.  That was because, among other things, he had demonstrated a sufficient basis for asserting that he was affected by the “villagisation” programme, as well as a factual linkage between the provision of UK aid and that programme.   The Judge made clear that:

in reaching this conclusion I do not consider myself to be doing any more than applying to the particular facts of this case, as they presently appear, the law as stated by the authorities I have relied on above and in particular the decisions of the Supreme Court in AXA and Walton.

Comment

It is unsurprising that the Administrative Court did not depart from the common law principles on standing that have developed over decades and which were recently affirmed by the UK’s apex court in AXA and Walton.  The judgment is noteworthy, however, since it comes just a few months after the Government abandoned its proposals to reform the standing test.  Those proposals were roundly criticised by the judiciary and practitioners alike, and the Government ultimately concluded that “amending standing is [not] the best way to limit the potential for mischief.“  In that context, the Court’s robust application in O of existing principles, and its rejection of argument in favour of a stricter standing test – advanced by James Eadie QC, First Treasury Counsel for the Government – serves as a reminder of the pragmatic and flexible approach that will be adopted when it comes to the “sufficient interest” test.

Extension of Iran sanctions update

On Friday, 18 July, the P5+1 countries (China, France, Germany, the Russian Federation, the United Kingdom, and the United States), supported by the European Union, agreed with Iran to extend the Joint Plan of Action (JPOA) that suspended some economic sanctions against Iran as part of the overall talks regarding Iran’s nuclear related activities. The JPOA originally went into effect for a six-month period beginning 20 January 2014, and was scheduled to expire 20 July 2014. The JPOA commitments are now to be extended until 24 November 2014. The additional four-month period gives negotiators additional time to seek a final agreement.

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FDA Issues Revised Draft Guidance on Reporting Drug Sample Information Under the ACA

On July 11, FDA issued new draft guidance concerning drug sample reporting mandated under the Affordable Care Act (ACA).  The guidance, Reporting Drug Sample Information Under Section 6004 of the Affordable Care Act, replaces agency’s earlier April 2012 guidance, Compliance Policy on Reporting Drug Sample Distribution Information.  In this new document, the agency provides more detailed direction  to manufacturers and authorized distributors of record submitting sample information under section 6004 of the ACA.  For instance, the guidance provides definitions relevant to drug sample submissions, information on the Electronic Submissions Gateway, and FDA’s interpretation of section 6004, including who should submit the drug information, how it should be submitted, and what information should be included.  It also announces an updated enforcement policy, requiring the submission of data for the 2014 calendar year by April 1, 2015.

To ensure comments are considered before work begins on the final version, comments on the draft should be submitted by October 9, 2014.  The draft guidance is available here.

 

The author thanks Katelyn Ruiz for her assistance.

FDA Issues Draft Guidance on Informed Consent Regulations

On July 15, 2014, the Food and Drug Administration (FDA or the Agency) announced a new Draft Guidance, Informed Consent Information Sheet: Guidance for IRBs, Clinical Investigators, and Sponsors. FDA’s previous Information Sheet on this topic, “A Guide to Informed Consent,” was issued over 15 years ago, in 1998. The Agency states that when the new Draft Guidance is finalized, it will supersede the previous Information Sheet.

Coming in at 42 pages, the new Draft Guidance provides a comprehensive update to FDA’s informed consent policies, covering the various elements of informed consent and the particular responsibilities of IRBs, clinical investigators, and sponsors. The Draft Guidance steps through individual provisions of the informed consent regulations at 21 CFR Part 50, and provides several examples of recommended language to assist parties in fulfilling the informed consent requirements. Continue Reading

2014 Intelligence Authorization Act Requires Contractors to Report Cybersecurity Breaches

On Monday, 7 July, the president signed into law the Intelligence Authorization Act for Fiscal Year (FY) 2014 (Pub. L. 113-126), which requires intelligence contractors with security clearances to promptly report network and information system penetrations and provide government investigators access to such systems. This new statutory cybersecurity reporting requirement for cleared intelligence contractors is largely consistent with a reporting requirement applicable to cleared U.S. Department of Defense contractors under the National Defense Authorization Act for FY 2013.

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Update on Developments Regarding the U.S. and EU Ukraine-Related Sanctions and Export Controls

The United States has imposed new economic sanctions and export restrictions related to the situation in the Ukraine, and the European Union has announced its intent to implement additional measures. The U.S. measures do not impose territorial sanctions against Russia but continue the approach of targeting designated parties and prohibiting certain activities. In a shift toward the energy and banking sectors, the U.S. has cut off from its financial system certain new debt and equity transactions of major Russian companies. Given this development, U.S. companies should carefully review the scope of these new sanctions.

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FTC Director Addresses Enforcement Efforts in the Healthcare Sector

In an informative speech at the recent Accountable Care Organizations Summit, Federal Trade Commission (FTC) Director of the Bureau of Competition Deborah Feinstein articulated her current thinking on many important issues for healthcare providers, including: Accountable Care Organizations, merger enforcement, remedies, and certain merger defenses. As other FTC officials have done, Feinstein rejected arguments that the Affordable Care Act’s (ACA’s) goals of containing costs and improving quality are in tension with antitrust enforcement. Instead she enumerated a number of important policy points for the healthcare industry.

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Federal Communications Commission Rewrites E-Rate Rules for Technology Support for Schools

On July 11, 2014, the Federal Communications Commission (“FCC”) adopted a long-awaited order revising the rules governing E-rate, the federal government’s largest education technology program with an annual budget of $2.4 billion. Schools and libraries eligible for E-rate support should review the final FCC Order, which has not yet been released, closely to see how changes to this program will affect their technology budgets in the future.

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D.C. Circuit Issues Significant Ruling in CFIUS Case

The U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) ruled July 15 that President Obama’s September 2012 order requiring Ralls Corporation (Ralls) – on the basis of national security concerns – to divest itself of four Oregon wind farms deprived Ralls of its Fifth Amendment property rights without due process. The D.C. Circuit remanded the case to the district court with instructions that Ralls, a U.S. company owned by Chinese nationals, be provided access to the unclassified evidence on which the president based his decision and an opportunity to rebut such evidence.

In the summer of 2012, the Committee on Foreign Investment in the United States (CFIUS), a U.S. government interagency that reviews the national security implications of foreign acquisitions, reviewed Ralls’s acquisition of the wind farms, which are located near a U.S. Navy training facility. CFIUS imposed certain restrictions on Ralls, including a prohibition on Ralls’s access to the wind farms, and the president followed up with his divestment order.

One should not necessarily conclude that the D.C. Circuit’s decision will lead to a reversal of the substantive outcome in this case – Ralls being stripped of its ownership of the wind farms – but the case is significant for the due process requirements that it imposes on the president and for its potential implications for future CFIUS cases. We are continuing to review the D.C. Circuit’s decision and may provide additional commentary as warranted.

New Mexican Competition Law

As you may know, Hogan Lovells will be combining with leading Mexican law firm BSTL effective 1 August 2014. We want to share with you changes to Mexican competition law that have gone into effect as of 7 July 2014.

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