RTP's Free Lunch Podcast

On August 16, the Department of Justice issued a letter repudiating the Department’s participation in an initiative known as “Operation Choke Point” during the Obama administration. Operation Choke Point sought to deprive members of disfavored industries, such as payday lenders and firearms dealers, of the right to access the banking system. The call will discuss Operation Choke Point, the Department of Justice Letter, and litigation against federal agencies who have participated in Operation Choke Point. -- Featuring: Pete Patterson, Partner, Cooper & Kirk, PLLC.

In 2011, Congress created a new administrative tribunal in the U.S. Patent Office with the power to cancel previously granted patents, called the Patent Trial and Appeal Board (PTAB). The PTAB was created to provide an efficient and inexpensive administrative process for eliminating low-quality patents – what are called “bad patents.” Despite its laudable purpose, the PTAB has earned a reputation among some as a prime example of regulatory overreach. The PTAB’s critics cite a wide range of concerns including inadequate due process protections and bias against patents. A former federal appellate chief judge even referred to PTAB administrative judges as “patent death squads.” So, is the PTAB indeed harming the property rights that have helped to drive the U.S. innovation economy for over 200 years or, is it functioning as intended? What are the concerns of its detractors? If these concerns are valid, does the PTAB need simple reform or more? -- This teleforum is held in conjunction with the Monday, August 14 release of a paper authored by members of the Regulatory Transparency Project’s Intellectual Property Working Group. The paper is called “Crippling the Innovation Economy: Regulatory Overreach at the Patent Office.” This paper, which discusses this new administrative tribunal at the Patent Office, is available for viewing and download at RegProject.org. -- Featuring: Josh Malone, Inventor, Bunch O Balloons; Kristen Osenga, Professor, University of Richmond School of Law; and Brian O’Shaughnessy, Partner, Dinsmore & Shohl LLP. Devon Westhill, Director, Regulatory Transparency Project (Moderator).

Administrative agencies, and extensive regulation of the economy, have always existed in America. But from the founding to 1900, agencies were constrained by basic principles of representation, separation of powers, and judicial review. In his new book, Bureaucracy in America: The Administrative State’s Challenge to Constitutional Government, Professor Joseph Postell explores American history, from the Revolutionary War to the present, to answer such questions as: What is the administrative state; Is it compatible with the basic principles of American constitutionalism; How have American thinkers and statesmen answered these questions in the past; What has changed since then; and, Do these changes pose a threat to our constitutional system? -- Sign up for Regulatory Transparency Project updates at RegProject.org.

Howard Root started Vascular Solutions, a medical device company, from scratch. Fifteen years later, his Minnesota company had created over 500 American jobs and developed more than 50 new medical devices that saved and improved lives. -- But in 2011, the federal government accused Howard of marketing medical devices for unapproved uses – a practice prohibited by the FDA. Howard professed his innocence from the beginning but, when prosecutors set their sights on Howard and his company, there was no guarantee that he would save his company from closing or himself from prison. -- 5 years, 121 attorneys, and $25 million in legal fees later, his life’s work and freedom rested in the hands of 12 strangers in a San Antonio jury room. Would Howard and his company be vindicated by the verdict, or had he made the biggest mistake of his life by challenging the federal government? -- Sign up for Regulatory Transparency Project updates at RegProject.org.

The Internet of Things (IoT) refers to the connection of various devices to the Internet. The Internet of Things (IoT) is growing in prominence almost exponentially. Today, manufacturers are creating products with cyber capabilities that range from life-critical systems such as cars or medical devices, to more prosaic, even whimsical products like internet-connected toasters. The expansion of connectivity brings with it risks to security and privacy. -- How should those risks be addressed? Is this a case where the market will provide a solution? Or is this one of those instances where regulation is required? Are manufacturers liable for insecure products? If not, who pays when something goes wrong? -- Sign up for Regulatory Transparency Project updates at RegProject.org.http://www.regproject.org

Congress passes and the President signs several dozen laws every year. Meanwhile, federal departments and agencies issue well over 3,000 regulations of varying significance. Does Congress have a clear grasp of the amount and cost of the thousands of executive branch and federal agency proclamations and issuances, including guidance documents, memoranda, bulletins, circulars, and letters, that carry practical (if not always technically legally) binding regulatory effect? There are hundreds of “significant” agency guidance documents now in effect, plus many thousands of other such documents that are subject to little democratic accountability. Is the government trading the cost and benefits of informal as well as formal rules? -- Sign up for Regulatory Transparency Project updates at RegProject.org.

Mike Daugherty is the CEO of LabMD, a medical testing lab. He has spent most of the last decade defending his company against charges that it had deficient cybersecurity practices. The early years of this battle are recorded in his book, "The Devil Inside the Beltway". In so doing, he has become the only litigant to challenge the basic authority that underlies more than 200 enforcement actions relating to cybersecurity and online privacy that the FTC has brought over the past 15 years. Every one of the 200+ litigants before him – including some of the largest companies in the world – have settled with the FTC, creating an unquestioned and untested belief that the FTC has broad authority to regulate in these areas. -- Following oral arguments last month before a panel of the 11th Circuit Court of Appeals, it seems entirely possible that he will prevail. In so doing, he may well topple key pillars of the FTC’s cybersecurity and online privacy edifice. -- Sign up for Regulatory Transparency Project updates at RegProject.org. -- Featuring: Michael J. Daugherty, Founder, President and CEO, LabMD and Gus Hurwitz, Assistant Professor of Law, Nebraska College of Law.

Flytenow was a ridesharing platform for small planes. The company was founded by two pilots, Alan Guichard and Matt Voska. This kind of cost-sharing arrangement was explicitly authorized by the Federal Aviation Administration (FAA). The Flytenow software facilitated the cost-sharing in accordance with FAA rules and also provided a breadth of information about the flight and the pilot including his/her license type, experience, past flight ratings, and social media. -- The service was a great win-win for both parties. That is until the FAA caught wind of all the innovation and deemed the online nature of Flytenow to be prohibited. The FAA reasoned that posting flight plans online, as opposed to physical bulletin boards, was impermissible because it could attract a broader segment of the public. Flytenow, with the help of The Goldwater Institute, challenged the FAA’s ruling all the way to the Supreme Court; but unfortunately, the Court declined to take up the case in January of this year, effectively upholding the lower courts' siding with the FAA. -- Flytenow is now pursuing a legislative route to make ridesharing in aviation a reality. -- Speakers: Jonathan Riches, Director of National Litigation, Goldwater Institute and Alan Guichard, CFO and Co-Founder, Flytenow, Inc. Moderator: Devon Westhill, Director, Regulatory Transparency Project.

In many federal investigations, a regulatory agency must bring legal action against a company or individual through the traditional court system. However, some regulatory agencies, like the Securities and Exchange Commission (SEC), have a powerful alternative – administrative proceedings. Rather than filing a lawsuit in federal court, the SEC can institute an administrative proceeding, which is presided over by an Administrative Law Judge. In doing so, the SEC can put nearly any company or individual at a distinct litigation disadvantage, depriving them of significant rights and thereby increasing its own chances of success. -- Take for instance, the case of Eric Wanger. In 2010, Mr. Wanger ran a multi-family office, employed 11 people, published articles on finance, and campaigned for shareholder rights. The SEC claimed that Mr. Wanger overcharged his clients by exactly $2,269, about $70 per month—possibly the smallest case the SEC has ever undertaken. No charges were ever filed against Mr. Wanger, and no hearings or trial were held. He never pleaded guilty or admitted to breaking any laws. The SEC instead, instituted administrative proceedings which forced Mr. Wanger to shut down his business and layoff his employees, and has since barred him from practicing his profession. -- You can also read more about Mr. Wanger’s story on his blog at https://2200dollarman.org.

The Regulatory Transparency Project (RTP) seeks to identify and bring attention to the excesses of the administrative state in this country. All too often, over-regulation of the economy stifles innovation, productivity, opportunity and ultimately, the American Dream. We want people to look at regulations which are burdensome and extremely inefficient and not simply submit to them as the cost of doing business but, rather, look for real and concrete ways to change them for the better. -- The RTP is a years-long endeavor designed to reach and to educate a broad audience. The purpose, in part, is to illustrate that regulatory excess is not a partisan issue but, a good government issue. We believe that such an approach can lead to both immediate change and, more importantly, development of a healthy societal understanding of both the benefits and costs of regulation.

The Regulatory Transparency Project (RTP) seeks to identify and bring attention to the excesses of the administrative state in this country. All too often, over-regulation of the economy stifles innovation, productivity, opportunity and ultimately, the American Dream. We want people to look at regulations which are burdensome and extremely inefficient and not simply submit to them as the cost of doing business but, rather, look for real and concrete ways to change them for the better. The RTP is a years-long endeavor designed to reach and to educate a broad audience. The purpose, in part, is to illustrate that regulatory excess is not a partisan issue but, a good government issue. We believe that such an approach can lead to both immediate change and, more importantly, development of a healthy societal understanding of both the benefits and costs of regulation. -- Devon Westhill introduces and describes the Free Lunch podcast series, a production of the Federalist Society's Regulatory Transparency Project.