Overnight Regulation: EPA sued over water rule delay | House passes bill to ease ObamaCare calorie rule | Regulators talk bitcoin | Patient groups oppose FDA ‘right to try’ bill

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Tuesday night in Washington, and senators say they are nearing in on a two-year budget deal that could avert a shutdown and begin debate on immigration reform.

 

THE BIG STORY

Ten Democratic states and a coalition of environmental groups sued the Trump administration Tuesday for delaying enforcement of an Environmental Protection Agency (EPA) rule meant to protect waterways.

Led by New York Attorney General Eric Schneiderman (D), the Southern Environmental Law Center and the Natural Resources Defense Council, the challengers say EPA head Scott Pruitt violated required legal processes and ignored his legal obligation to protect water supplies when he pushed off the Clean Water Rule.

What is the rule? The 2015 rule from the Obama administration asserted federal authority under the Clean Water Act over small waterways like wetlands and streams, in order to ensure federal government protections from pollution or other harms.

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Republicans and industries like agriculture and developers ardently oppose the rule, saying it gives the government power over vast swaths of water and dry land.

Why the lawsuit? Pruitt last week finalized an action to delay the rule, also known as Waters of the United States, for two years. He is in the process of completely repealing and replacing it, but the delay ensures that it won’t take effect while that process is ongoing. Schneiderman said Pruitt’s actions are “clearly illegal.”

Read more from Timothy Cama here.

 

ON TAP FOR WEDNESDAY:

The Senate Environment and Public Works Committee holds a hearing on the nomination of Andrew Wheeler to be deputy administrator of the EPA at 9:30 a.m.

At 10 a.m., the Senate Environment and Public Works Committee holds a hearing on the impact of federal environmental regulations on farmers and ranchers.

The Senate Energy and Natural Resources Subcommittee on Public Lands, Mining and Forests holds a hearing on a slate of land conservation and management bills.

 

REG ROUNDUP

Health care: The House passed legislation Tuesday to ease the ObamaCare rule that requires restaurants, convenience stores and supermarkets to list the calorie count of each menu item before it’s set to take effect in May.

The Common Sense Nutrition Disclosure Act, introduced by Rep. Cathy McMorris Rodgers (R-Wash.) and Tony Cárdenas (D-Calif.), passed, 266-157, with the support of 32 Democrats.

The legislation keeps business owners from having to provide calorie counts for every possible variation of a sandwich, salad or slice of pizza. Instead, sandwich shops and pizza chains could give a calorie range, base the calorie count on how the item is commonly ordered or list the number of calories per serving.

The requirements, which are set to take effect May 7 and apply to food service establishments with 20 or more locations, have been criticized by conservatives as overly burdensome for businesses.  

Lydia Wheeler has more on the story here.

 

Health care: Nearly 40 patient advocacy groups told House leaders they opposed the “right to try” bill on experimental drugs, arguing the measure would “likely do more harm than good.”

In a letter sent to the House leaders of both parties, the groups wrote that they believe the right to try legislation wouldn’t actually lead to greater patient access to unapproved drugs and that the current regulatory framework exists so patient protections aren’t undermined.

The right to try legislation would let patients with serious illnesses request access to experimental medicines that the Food and Drug Administration (FDA) hasn’t approved.

“As you consider bringing this troubling legislation to the House floor for a vote we ask that you remain mindful of our concerns, and take into consideration the negative impact the policies could have on patients living with life threatening disease,” the group of organizations — which includes the American Cancer Society Cancer Action Network, National Organization for Rare Disorders and Susan G. Komen — wrote in the letter sent Tuesday.

Rachel Roubein has more here.

 

Tech: Two House Democrats are accusing Uber of covering up a massive 2016 data breach from federal regulators while the company was negotiating a consent decree over a separate, earlier breach.

Reps. Jan Schakowsky (D-Ill.) and Ben Ray Luján (D-N.M.) on Monday wrote to the top members of a Senate panel that heard testimony from John Flynn, Uber’s chief information security officer, on Tuesday.

They urged the senators to press Flynn on whether Uber misled the Federal Trade Commission (FTC) in the run-up to an August 2017 consent decree, which came months before the company disclosed the breach that exposed the personal information of 57 million people.

In November, Uber revealed that two hackers had stolen information like names, email addresses and phone numbers from 57 million users as well as names and driver’s license numbers from about 600,000 drivers.

Harper Neidig has more here.

 

Uber responds: Harper reports that Flynn, the Uber executive, testified on Tuesday that there was “no justification” for the company covering up a massive 2016 data breach that exposed the information of 57 million people.

“I think we made a misstep in not reporting to consumers, and I think we made a misstep in not reporting to law enforcement,” Flynn told a Senate panel.

Flynn confirmed reports that the company paid one of the hackers $100,000 to destroy the stolen data and to not disclose the breach publicly.

Uber made the payment through a “bug bounty” program, which generally offers financial rewards for cybersecurity researchers who identify vulnerabilities for companies. Flynn on Tuesday said paying off malicious hackers was improper use of such a program.

Read the rest from Harper Neidig.

 

Environment: The top Democrat on the Senate Environment and Public Works Committee sent a letter to the head of the Environmental Protection Agency (EPA) Tuesday, calling into question a dramatic decrease in grant funding awarded by the agency in the past year.

According to Sen. Tom Carper (D-Del.), his staff’s review of publicly available data on EPA grant awards found that in 2017 the agency awarded $1.1 billion in the first three quarters, only a third of the $3.5 billion awarded in the same time frame the previous year.

In the letter sent to EPA Administrator Scott Pruitt on Tuesday, Carper questioned the reason behind the agency’s decrease in grant awards and asked what the agency was doing with the nearly $4 billion it was allotted through Congress to award to nonprofits and local governments.

Miranda Green has the rest of the story here.

 

Tech: One of the nation’s top financial regulators pressed for greater coordination on regulating trading of cryptocurrencies at a hearing Tuesday.

“We should all come together, the federal banking regulators, the [Commodity Futures Trading Commission] and [Securities and Exchange Commission] — there are states involved as well — and have a coordinated plan for dealing with the virtual currency trading market,” Jay Clayton, chairman of the Securities and Exchange Commission (SEC), told the Senate Banking Committee.

Clayton testified alongside Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo, as lawmakers pressed them on steps they are taking to regulate bitcoin and other cryptocurrencies.

Ali Breland tells us more here.

 

Health care: A coalition of 44 groups is calling on Congress to pass a measure aimed at fighting high drug prices that has gained support from across the political spectrum.

The letter is signed by groups that are often directly opposed to each other, such as the conservative group FreedomWorks and the liberal group Families USA.

The bill, called the Creates Act, has bipartisan co-sponsors and is designed to increase competition and bring prices down by preventing branded drug companies from using delay tactics to prevent generic competitors from getting onto the market.

Major health-care groups also signed the letter on Tuesday, including the Campaign for Sustainable Rx Pricing, the American Hospital Association and America’s Health Insurance Plans.

Peter Sullivan has more here.

 

Tech: Sen. Amy Klobuchar (D-Minn.) is urging the Federal Trade Commission to pour more resources into its probe of the Equifax data breach after reports that another agency, the Consumer Financial Protection Bureau (CFPB), is freezing its own investigation.

Reuters reported on Sunday that Mick Mulvaney, the CFPB’s acting director, has been dialing back the agency’s questioning of Equifax officials and has not sought any subpoenas or sworn testimony.

“In light of this concerning development, I urge the FTC to consider increasing the resources and manpower dedicated to its own investigation of the Equifax breach announced in September 2017,” Klobuchar wrote to the two sitting FTC commissioners.

Harper Neidig has more here.

 

Courts: The Supreme Court denied a request Tuesday to immediately take up a partisan gerrymandering case out of North Carolina.

Common Cause and the League of Women Voters had asked the Supreme Court to expedite a review of the case. That appeal came after the justices granted a request last month from state officials to temporarily block a lower court ruling requiring the state’s congressional voter map be redrawn.

A three-judge panel on the U.S. District Court for the Middle District of North Carolina ruled in January that the state’s map was an unconstitutional gerrymander.

Lydia Wheeler has more here.

 

ALSO IN THE NEWS:

Fed backs marijuana-focused credit union (The Wall Street Journal)

Fed rebuke costs Wells Fargo about $29 billion in lost market value (The Wall Street Journal)

Lawmaker seeks probe into fake comments on payday-lending rule (The Wall Street Journal)

Blackrock urges more regulation after inverse notes collapse (Bloomberg)

Crytpocurrencies fluctuate as regulatory spotlight increases (Bloomberg)

In the world’s priciest city, even the securities regulator finds itself priced out of prime office space (South China Morning Post)

Discovery Communications says European Commission clear purchase of Scripps Networks Interactive (Reuters)