RTP's Fourth Branch Podcast

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?

Featuring:
- Wayne Crews, VP for Policy & Director of Technology Studies, Competitive Enterprise Institute

Visit our website – https://RegProject.org – to learn more, view all of our content, and connect with us on social media.

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.

Featuring:
- Michael J. Daugherty, Founder, President and CEO, LabMD
- Gus Hurwitz, Assistant Professor of Law, Nebraska College of Law

Visit our website – https://RegProject.org – to learn more, view all of our content, and connect with us on social media.

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.

Featuring:
- Jonathan Riches, Director of National Litigation, Goldwater Institute
- Alan Guichard, CFO and Co-Founder, Flytenow, Inc.

Visit our website – https://RegProject.org – to learn more, view all of our content, and connect with us on social media.

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.

Featuring:
- Michael Kelly, Partner, Hogan Lovells U.S. LLP
- Eric Wanger, Founder, Wanger Investment Management

Visit our website – https://RegProject.org – to learn more, view all of our content, and connect with us on social media.

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.

We have grown accustomed to modern government issuing and enforcing new rules to protect certain public goods, but regulations also have the potential to stifle innovation and harm the most vulnerable among us. Therefore, we must be diligent in reviewing how regulations either succeed or fail us, and think about how we might improve them.

The Regulatory Transparency Project promotes a national conversation about the benefits and costs of federal, state, and local regulatory policies and explores areas for possible improvement.

Featuring:
- Amb. C. Boyden Gray, Founding Partner, Boyden Gray & Associates
- Devon Westhill, Founding Director, Regulatory Transparency Project

Visit our website – https://RegProject.org – to learn more, view all of our content, and connect with us on social media.

Devon Westhill introduces and describes the Regulatory Transparency Project's podcast series.

Listen to future episodes of the Fourth Branch Podcast (https://regproject.org/podcast/) to hear leading experts discuss the merits of government rules that affect your daily lives.

Featuring:
- Devon Westhill, Founding Director, Regulatory Transparency Project

Visit our website – https://RegProject.org – to learn more, view all of our content, and connect with us on social media.