Header graphic for print

Focus on Regulation

Ill-Suited: Private Rights of Action and Privacy Claims

“For years, the plaintiffs’ bar has conjured multibillion-dollar class action lawsuits out of largely intangible privacy harms. This wave of litigation is increasingly driven by federal and state statutes that include private rights of action and allow for excessive statutory damages. Given the willingness of some courts to let cases proceed despite a lack of allegations or evidence of concrete harm, this litigation trend shows no sign of abating.”

The U.S. Chamber of Commerce Institute for Legal Reform has published “Ill-Suited: Private Rights of Action and Privacy Claims,” a white paper authored by Hogan Lovells’ Mark W. Brennan, Alicia Paller, Adam Cooke, and Joseph Cavanaugh explaining why private litigation is a poor enforcement tool for privacy laws.  As detailed in the paper, when it comes to privacy interests, “harms” are largely inchoate and intangible, and the wrongdoers are often unknown or unidentifiable. Even where class members may have suffered a concrete injury, the data indicates that they are unlikely to receive material compensatory or injunctive relief through private litigation. Meanwhile, plaintiffs’ counsel often walks away with millions of dollars, court dockets are unduly cluttered, and companies are forced to expend resources on baseless litigation.

Whereas a stream of harmful consequences flow from private rights of action for privacy laws, agency enforcement provides the right balance between protection, penalties, deterrence, and progress.

Continue Reading

Practical Pointers: Social Media Guidelines for Public Officials (and the People who Advise Them)

Social media has transformed the ways legislators and their staff interact with constituents. Through social media platforms, our elected officials share insights into the legislative process, communicate with constituents, and even provide life-saving updates during times of crisis. Politicians can also use social media to grow their following and influence public discourse—as when a Texas state senator leveraged social media to turn her filibuster into a national social media event.

Social media use by elected officials isn’t without legal, political, and reputational hazards, however. In part to mitigate against the risks posed by social media gaffes, federal agencies, associations of elected officials, and social media companies themselves have all published model social media policies or addressed specific challenges politicians can face while spreading their message online. At the same time, few resources provide a comprehensive catalogue of the myriad risks elected officials and their staffs may encounter on social media platforms.

Below are best practices to help public officials reap the benefits of social media while guarding against embarrassment or liability for improper online activity. While far from a definitive guide to how legislators and their staff should behave online, these practices can help elected officials and the people who advise them to navigate the diverse legal and ethical quandaries of social media.

Continue Reading

U.S. Department of Education Announces Changes to College Scorecard, Plans for Future Expansion

In late May the U.S. Department of Education (the “Department”) announced several changes to its College Scorecard, a tool that is intended to help students and their families make informed decisions about post-secondary enrollment.  Then, on July – in a final rule in which the Department announced that it would rescind its “gainful employment” regulations effective July 1, 2020 – the Department explained that it plans to expand the program-level and institution-level data available from the College Scorecard in the future.  The purpose of the expansion is to help students “make enrollment choices informed by debt and earnings data, thus enabling a market-based accountability system to function” and to “help taxpayers understand where their investments have generated the highest and lowest returns.”

In addition to updating the College Scorecard with the most recent data on certain existing metrics, as of May 2019 the Department added information about additional types of institutions and new categories of data:

  • Updated data: The Department updated the College Scorecard to include more recent data for metrics such as average annual cost and graduation rate as well as information about student demographics.  Previously, the Department has updated the Scorecard each fall; going forward, the Department will update certain data multiple times throughout the year as the data become available.
  • Added non-degree-granting institutions: For the first time, the College Scorecard includes information about more than 2,100 non-degree granting institutions (i.e., institutions that award only certificates).  Previously, the Scorecard provided profiles for approximately 3,700 degree-granting institutions.
  • Expanded outcomes data: The updated Scorecard includes new information about graduation rates for part-time students and non-first-time students, the percent of students who transfer out, and the number of students who are still enrolled after eight years in a bachelor’s program (click here for an example).  Previously, the Scorecard included only graduation rates for first-time, full-time undergraduates – a category that may not be representative of all students at some institutions.
  • Added program-level student debt data: Additionally, the Department has released information about student loan debt data at the program level, including for graduate programs.  Previously, information about student loan debt was available only on an institutional level.  Currently, the College Scorecard webpage presents preliminary data, which will be updated in the fall.  The preliminary program-level debt dataset can be downloaded here.

In its July 1 final rule, the Department acknowledged concerns that as a result of the rescission of the gainful employment rules, “some students would be more likely to make poor educational investments”.  In response, the Department plans to expand the College Scorecard to include certain program-level data, including:

  • program size;
  • the median Federal student loan debt and the monthly payment associated with that debt based on a standard repayment period;
  • the median Graduate PLUS loan debt and the monthly payment associated with that debt based on a standard repayment period;
  • the median Parent PLUS loan debt and the monthly payment associated with that debt based on a standard repayment period; and
  • student loan default and repayment rates.

The Department also plans to continue to include institution-level data, including about admissions selectivity, student demographics, and student socioeconomic status.  The Department said that such data “will provide important context to help students compare outcomes among institutions that serve demographically matched populations or that support similar educational missions.”

D.C. Circuit Rejects “Academic Deference” Argument In Tenure Denial Discrimination Cases

On June 14, 2019, the United States Court of Appeals for the District of Columbia Circuit rejected the argument that a university should be entitled to special academic deference in employment discrimination claims concerning denial of tenure brought under Title VII of the Civil Rights Act of 1964 (“Title VII”). Mawakana v. Bd. Of Trustees of the Univ. of the Dist. Of Columbia, No. 18-7059 (D.C. Cir. June 14, 2019).

In Mawakana, an African American professor brought suit after he was denied tenure by the University of the District of Columbia (“UDC”). He failed to receive a recommendation for tenure at each step of UDC’s process, including from the relevant faculty committees, the dean and the provost, as well as in the final decision by the university president. Mawakana sued UDC for, among other things, race discrimination under Title VII and the District of Columbia Human Rights Act (“DCHRA”). The district court granted UDC’s motion for summary judgment and dismissed Mawakana’s claims, reasoning that it was required to accord “heightened deference” to UDC’s “academic decisions.” Like the district court here, some courts in prior decisions, including in the District of Columbia, have suggested that they are reluctant to find discrimination in faculty tenure or promotion decisions. See, e.g., Okruhlik v. Univ. of Arkansas, 395 F.3d 872, 879 (8th Cir. 2005) (“The academic setting and complex nature of tenure decisions, however, distinguishes them from employment decisions generally.”); Elam v. Bd. of Trustees of Univ. of D.C., 530 F. Supp. 2d 4, 17 (D.D.C. 2007) (citing Okruhlik for the proposition that “a court must be particularly wary of second-guessing a university’s decisions concerning faculty members”); Jiminez v. Mary Washington Coll., 57 F.3d 369, 376 (4th Cir. 1995) (“We commence with the premise that while Title VII is available to aggrieved professors, we review professorial employment decisions with great trepidation.”).

The D.C. Circuit’s analysis of academic deference

The D.C. Circuit reversed the district court’s grant of summary judgment to UDC, holding that United States Supreme Court precedent “and the concept of academic freedom do not entitle a university to special deference in Title VII tenure cases.” Although the Court acknowledged that the Supreme Court in University of Michigan v. Ewing, 474 U.S. 214 (1985) held that courts must defer to universities in reviewing the “substance of a genuinely academic judgment” made in “good faith,” the question in a Title VII case is “whether the employer acted in good faith.” More specifically:

Ewing dictates that a court cannot second-guess a university’s decision to deny tenure if that decision was made in good faith (i.e., for genuinely academic reasons, rather than for an impermissible reason such as the candidate’s race) . . . . A Title VII claim requires a court to evaluate whether a university’s decision to deny tenure was made in good faith (i.e., for academic reasons rather than for an impermissible reason such as the applicant’s race).

In a footnote, the court, surveying a number of cases across the country, highlighted that many (but not all) other courts have applied “the same Title VII standard to faculty members as to other discrimination plaintiffs,” and that upon a “close examination,” even the cases that “express[ed] solicitude” related to faculty employment decisions effectively were not applying a different Title VII standard.

The court also reversed summary judgment on Mawakana’s claims under the DCHRA, noting that the legal analysis of a race discrimination claim under Title VII and the DCHRA is the same.

Having disposed of the argument that UDC is entitled to academic deference; the D.C. Circuit viewed the evidence in the light most favorable to the professor, as required at the summary judgment stage, and held a reasonable jury could find that race was a motivating factor in UDC’s decision to deny Mawakana tenure. In reaching this decision, the court was heavily influenced by evidence concerning the dean, who in the court’s view, while not the ultimate decision-maker, was a proximate cause of the ultimate negative decision.  The court relied on evidence presented by the professor, including that the dean:

  • sometimes applied stricter review criteria to black applicants for tenure, such as disfavoring co-authored works for black applicants but not white applicants;
  • supported every white applicant for tenure during her time as dean but raised concerns about more than half of the black applicants;
  • had dissuaded two black faculty from applying for tenure; and
  • changed her position on issues that were subsequently relevant to the tenure decision, such as originally speaking favorably of an article by the professor and later stating that it did not meet tenure standards.

Applying the Mawakana decision

While the D.C. Circuit’s decision rejects the concept of special deference in cases involving academic judgment, it is important to underscore the limits of the Mawakana holding. While the D.C. Circuit has held that courts should not place a “thumb on the scale” of a university in an employment discrimination simply because of “academic deference,” the case does not mean that an employment discrimination plaintiff can prevail on a discrimination claim by convincing a court that a university’s academic judgment was simply incorrect or unwise. If it can be shown that the university made a genuine academic decision—just like if a non-university employer has made a genuine business decision—a plaintiff cannot prevail (or survive summary judgment) simply by second guessing academic (or business) judgment. Courts have often stated that they do not “serve as a super-personnel department that reexamines an entity’s business decisions.” Barbour v. Browner, 181 F.3d 1342, 1346 (D.C. Cir. 1999). This principle applies equally in and out of the higher education context. Additionally, the D.C. Circuit was careful to point out that, even absent academic deference, it may be “especially difficult” as a practical matter for an employment discrimination plaintiff to succeed in challenging a tenure decision, given, among other things, the complexity of the decision and the numerous decision makers involved.

Furthermore, the D.C. Circuit did not address whether its holding extends beyond employment discrimination cases. Therefore, the court’s decision does not necessarily preclude an academic deference argument in another context, such as in a breach of contract case. See Brown v. The George Washington Univ., 802 A.2d 382, 385 (D.C. 2002) (granting summary judgment on breach of contract claim to university that did not promote professor or renew her contract; explaining that the court must “proceed with particular caution” and “only rarely assume academic oversight, except with the greatest caution and restraint, in sensitive areas as faculty appointment, promotion, and tenure” (quotation marks omitted)); Alden v. Georgetown Univ., 734 A.2d 1103, 1109 (D.C. 1999) (granting summary judgment on breach of contract claim to university that dismissed student from school, emphasizing the heavy burden a plaintiff faces in an academic dismissal case due to the need to defer to a university’s academic judgment).

Nonetheless, the Mawakana decision makes clear that universities should strive in the tenure decision process to:

  • have clear policies and criteria;
  • apply the policies and criteria consistently and evenhandedly;
  • treat similarly situated people similarly; and
  • assure that those involved in the different stages of the process understand their responsibilities and the university’s anti-discrimination policies.

For more information on the Mawakana case or any other employment or higher education law issues, please contact one of the authors or the Hogan Lovells lawyer with whom you work.

Dutch Child Labour Due Diligence Law

The Dutch Child Labour Due Diligence bill (the “Law“) was passed in both houses of parliament and is due to be implemented by royal ratification after 1 January 2020. The aim of the Law is to put more responsibility on companies to prevent goods and services which have come into existence through child labour to hit the Dutch market. As a result of the law entering into force, companies are advised to start establishing an action plan to mitigate risks in cases where child labour has been identified in their supply chain or activities. Continue Reading

The Court of Justice clarifies the EU customs rules applicable to customs valuation

The Court of Justice of the European Union (“Court”) just released its judgement in Case C-1/18 Oribalt Riga concerning the customs valuation methodologies applicable to generic medicines in the framework of consignment agreements (“Judgment”).

By way of background, in 2005, Oribalt Riga SIA (“Oribalt”) concluded a consignment agreement with Ranbaxy Laboratories Ltd. (“Ranbaxy”). Pursuant to this agreement, Oribalt imported generic medicines, stored and distributed them to Ranbaxy’s clients without acquiring their ownership. Oribalt determined the customs value pursuant to the “transaction value” method (i.e., the price actually paid or payable for the goods when sold for export to the EU). In 2011, Latvian authorities rejected the determination of the customs value based on that method and instead relied on the “deductive value” method (i.e., the unit price at which the imported goods or identical/similar goods are sold to unrelated buyers in the greatest aggregate quantity in the EU). Oribalt appealed Latvian Customs’ approach on the following grounds: (1) the customs value should be determined on the basis of the first applicable valuation method (i.e., the “transaction value” method); (2) if the customs value is established under the “deductive value” method, the reference values should be those of the goods imported on a date as close as possible to the date of importation of the goods considered for valuation; and (3) discounts should be taken into account for the determination of the customs value under the “deductive value” method.

On that basis, the Latvian court referred the following three questions to the Court: Continue Reading

Foreign Investment Control on the Rise – New List of EU Member States’ FDI Screening Mechanisms

Foreign direct investment (“FDI”) screenings have become a relevant factor for global transactions in recent years. More and more jurisdictions are introducing or ramping up their powers for scrutinising FDI, which parties to M&A transactions and their advisors need to consider when structuring such deals and planning for completion of the projects. In Europe, the European Commission (“Commission”) boosted this trend with its recently adopted Regulation (EU) 2019/452 of 19 March 2019 establishing a framework for the screening of FDI into the EU (“the Framework Regulation”).

In order to increase the visibility of FDI screening regimes, the Commission on 24 June 2019 published a list of FDI screening mechanisms notified by Member States [see the list here]. As part of the Framework Regulation, Member States with an FDI screening mechanism in place are obliged to notify the Commission of such mechanisms. The Commission is, in turn, responsible for maintaining an updated list of notified mechanisms. The recently published list is the first such consolidated list of FDI screening mechanisms in the EU and is likely to spur the debate about introducing such a system in those EU Member States which have not yet done so. Continue Reading

FDA launches temporary “TRIP” program to help HCT/P sponsors gain regulatory clarity

Acting Food and Drug Administration (FDA) Commissioner Ned Sharpless, M.D. recently announced that FDA is implementing a temporary program called the Tissue Reference Group Rapid Inquiry Program (“TRIP”), which will assist human cell, tissue, and cellular and tissue product (HCT/P) manufacturers, as well as stakeholders that market HCT/Ps, to “obtain a rapid, preliminary, informal, non-binding assessment from the FDA regarding how specific HCT/Ps are regulated.”  Under the program, FDA will respond within three business days to each inquiry that contains sufficient detail for evaluation, “resources permitting,” informing the requestor whether an HCT/P appears to be (a) appropriately regulated under section 361 of the Public Health Service Act (PHSA), (b) appropriately regulated under section 351 of the PHS Act and/or Federal Food, Drug, and Cosmetic Act (FDCA), or (c) not an HCT/P. Continue Reading

U.S. Supreme Court Sidesteps Important TCPA Deference Issues

On June 20, 2019, the Supreme Court released its long-awaited decision in PDR v. Carlton & Harris Chiropractic.  The Court was expected to provide greater clarity about the extent to which litigants can challenge the Federal Communications Commission’s (FCC) Telephone Consumer Protection Act (TCPA) interpretations in private litigation.  Instead of deciding that issue, however, the Court vacated the Fourth Circuit’s ruling and remanded the case for further development. How the Fourth Circuit rules on remand may ultimately provide more insight on how much deference is owed to the FCC’s TCPA interpretations. Continue Reading

FDA issues benefit-risk framework for assessing opioid drug applications, announces public meeting

Agency seeks input on “comparative advantage” requirement for new opioids

Yesterday, as part of its ongoing efforts to combat the current opioid crisis, FDA published a draft guidance, “Opioid Analgesic Drugs: Considerations for Benefit-Risk Assessment Framework,” outlining the benefit-risk framework the Agency intends to use in assessing whether a new opioid drug application meets the statutory standard for approval.  FDA also announced it will hold a public meeting on September 17 to discuss this benefit-risk assessment framework as well as potential new preapproval incentives to foster the development of new treatments for pain and opioid addiction.  This public meeting will fulfill the SUPPORT Act requirement that FDA hold at least one public meeting annually to “address the challenges and barriers of developing non-addictive medical products intended to treat acute or chronic pain or addiction.”

The draft guidance explains how FDA intends to apply its existing benefit-risk assessment framework to evaluate the benefits of a candidate opioid analgesic drug as well as any risks, including abuse, overdose, addiction, or opioid use disorder.  FDA also indicated it will consider the benefits and risks of the opioid analgesic at issue with those of other approved therapies, including opioid and non-opioid alternatives, in addition to the broader public health risks posed by the candidate drug to both patients and non-patients.

Importantly, while FDA will consider how the new opioid analgesic compares to existing therapies, a sponsor will not be required to show that its drug is superior to the other treatments for approval.  Nonetheless, at the public meeting in September, FDA seeks stakeholders’ input regarding the addition of a comparative advantage requirement for approval of potential opioid analgesic drugs as well as: Continue Reading