The Anti-Inversion Rule is Invalidated

Remember that one of the BHO Admin’s “70 day temporary regulations” was the “Anti-Inversion Rule?”

It was designed to keep American entities from merging with foreign companies to avoid American taxation, and from manipulating fungible items so that the American portion of the merged entity would show minimized income, or even losses.

As a temporary rule it stymied one drug company’s merger. The Admin believed that while it engaged in full APA review it could indefinitely extend its temporary regs pending same.

My friend of 50 years, Lee Yeakel, just said “No”. As the USDCt for the Western District of Texas, Austin Division, he ruled that the Anti-Inversion Rule was invalid because the APA had not been followed.

This business of avoiding the lengthy procedures required to vet a far reaching regulation got out of hand with BHO – remember the immigration regulations that the USDCt for the Southern District of Texas invalidated? As with that decision, In this case, the Judge agreed that the proposed rule was not inherently arbitrary or capricious, but that it just could not be a valid exercise by the Executive branch without the benefit of publication in the Federal Register, comment, and plenty of the back and forth that the APA requires.

Remember that Congress also gets the benefit of notice and prep time when the APA is followed, and can stop a proposed reg cold if it determines the proposal violates rather than applies the statute. Perhaps as important, the public, the interest groups, and those whom the reg is going to affect get their lawyers in gear.

The DJT Admin is also abusing the temporary reg loophole to try to avoid the cumbersome APA, as with its own “temporary” immigration regs.

But the cumbersome APA is in fact the legal mechanism that we have in place to tame executive bureaucratic overreach.

Here is an article on the Austin case:

https://www.davispolk.com/files/2017-10-02_court_invalidates_anti-inversion_regulation.pdf

12 Responses

  1. GWB appointed Lee to the Federal bench in 2003. He had been a Marine [VN era] a successful attorney in a respected small firm, a Travis County Republican Chairman, and in the late 90s a judge on an intermediate Texas appellate court. As an elected judge he was widely supported in the bar [regardless of party affiliation] because he was smart, fair, good natured, and honest.

    He remains popular in the bar on both sides of the docket because he hasn’t become crotchety in these later years, avoiding a tendency associated with aging judges.

    Liked by 1 person

  2. Back at the Charlie palmer

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  3. Liked by 2 people

    • There was a time when we simply categorized folks and the categories meant something. Reactionaries dreamed of a Utopian Past that was essentially nostalgic, and were ready to achieve it by force. Radicals dreamed of a Utopian Future which they imagined like a pipe dream and they were ready to achieve it by force. Two different dreams of one size fits all.

      Conservatives did not want to fix anything that wasn’t broken and liberals wanted to tweak almost everything but each were cognizant of the rights of all to open debate and the marketplace of ideas and each wanted to convince the public they had the better of issues.

      This is one of those times when these older definitions are useful. BLM is a radical group that dreams of a Utopian future, a pipe dream they are ready to achieve by force.

      Characterizing legitimate conservatives as reactionaries and legitimate liberals as radicals is simply name calling and I am always suspicious of it. But calling true radicals what they are – BLM here is an example – is critically necessary.

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      • Mark:

        But calling true radicals what they are – BLM here is an example – is critically necessary.

        Agreed. But what about when “legitimate” liberals are embracing what was, just yesterday, radicalism? Is it still just name-calling to say so, or is it critically necessary to call them radicals? I’d say it is the latter.

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        • Scott, I think liberals and conservatives have embraced reactionary and radical ideas, and it is appropriate to point out that an idea might be one or the other – but as long as the proponents want to achieve these ideas by fair debate and not by force they remain neither reactionary nor radical themselves.

          Intuitive examples:

          The competitive mechanism was once a radical idea – Hamilton did not buy it at all, as a mercantilist. But Adam Smith was not a radical.

          You think monopolies are OK if not government induced, a reactionary idea. But you are not a reactionary.

          Marx believed in a radical idea and was in favor of achieving it by any means necessary. He was a radical.

          Hitler believed several reactionary ideas [IIRC, that the gods of German mythology as promoted in the music of Wagner were supreme, and that “Germanic” peoples were superior by by reason of their past conquests]. He was willing to impose the reactionary ideas on others by any means necessary. Thus he was a reactionary.

          It is possible for a conservative to love a radical idea [think “Bismarck”] and vice versa [think Wilson on race], but to retain their own status as conservatives and liberals they must argue these ideas and not impose them involuntarily.

          This is a huge distinction, between the ideas and the commitment to representative democracy of the people who espouse them.

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        • Mark:

          …but to retain their own status as conservatives and liberals they must argue these ideas and not impose them involuntarily.

          This is a huge distinction, between the ideas and the commitment to representative democracy of the people who espouse them.

          Agreed. Which is why, for example, I think that liberals who have embraced the SSM regime under which we currently live are properly called radicals. It is a regime that has been imposed on society involuntarily, via the courts, in absolute contravention of any commitment to representative democracy. The same is true of, as another example, the abortion regime under which we live.

          Like

    • Lulz

      “That question that has cut fault lines though the A.C.L.U., with a group of staff members sending an open letter taking issue with the organization’s longstanding work of defending white supremacists in free speech cases. “Our broader mission — which includes advancing the racial justice guarantees in the Constitution and elsewhere, not just the First Amendment — continues to be undermined by our rigid stance,” says the letter, which a former member of the A.C.L.U.’s board, Michael Meyers, provided to The Times. About 200 staff members — the A.C.L.U. has about 1,300 full-time employees — signed onto the letter, according to a spokeswoman.
      “This letter has to be seen for what it is — a repudiation of free-speech principles,” Mr. Meyers said.

      https://mobile.nytimes.com/2017/10/04/us/aclu-charlottesville-white-supremacists.html?smid=tw-share&referer=

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  4. This ruling must have been stayed pending appeal, because Treasury is still acting as if “anti-inversion” is the law, and is waiting on potential tax statutory changes to jump one way or the other.

    Like

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