Memo from the S.J. Quinney College of Law Career Development Office, 2021-11-30 : Omicron, the OSHA and CMS Mandates, the Economy, and Law Firms

Memo produced by James Holbrook from the S.J. Quinney College of Law Career Development Office "for the Dean of the College of Law about Covid disease, coronavirus vaccines, the economy and employment."

Omicron, the OSHA and CMS Mandates, the Economy, and Law Firms To: Dean Elizabeth Kronk Warner Date: November 30, 2021 From: S.J. Quinney College of Law Career Development Office Covid Cases and Deaths, Omicron, and Vaccinations Five million people worldwide have died of Covid since the start of the pandemic, and over six million Covid deaths are forecast worldwide by March 1, 2022. As of today, the U.S. has had 48.3 million reported Covid cases resulting in more than 779,000 reported Covid deaths since February 29, 2020 (far surpassing the 675,000 deaths in the U.S. during the 1918-1919 influenza pandemic). Health officials believe the coronavirus has killed even more people than state totals indicate, especially early in the pandemic before testing and effective treatments were widely available. The U.S. is experiencing about 1,000 Covid deaths per day. And the number of new Covid cases in the U.S. is increasing, which is a leading indicator of an increase in subsequent hospitalizations and deaths which usually follow a spike in new cases by about a month. The birthrate in America fell 4% in 2020, marking the biggest annual decrease in decades and the sixth consecutive annual drop. The steepest decline occurred in the last part of 2020, when the first babies conceived during the pandemic would have been born. The U.S. birthrate fell across races, ethnicities, and almost all age groups. In 2020, the U.S. population grew at its slowest pace since the 1930s’ Great Depression. Health experts believe Covid has damaged more than 1 million Americans’ sense of smell, which doctors worry may be long-lasting. A new, potentially more transmissible variant of the coronavirus, which the World Health Organization has named “Omicron,” was recently detected by scientists in South Africa, with confirmed cases now in Asia, Europe and Canada. This scenario has long been feared: that a variant emerges in an area with low vaccination rates which then rapidly spreads throughout the interconnected world. Only 5% or less of the people in some southern African countries have been vaccinated. The Biden administration is going to invest billions of dollars to expand U.S. manufacturing capacity to increase the supply of coronavirus vaccines for poorer nations. The goal is to produce a billion doses of the Pfizer and Moderna mRNA vaccines by helping those companies expand their facilities, equipment, staff and training. The effort is also designed to prepare the U.S. for future pandemics to ensure the country’s manufacturing will be able to quickly produce vaccines within six to nine months after identification of a virus. The needed funds are part of the American Rescue Plan, the $1.9 trillion coronavirus relief package that President Biden signed into law in March. The Omicron variant has 30 mutations on three prongs of the coronavirus spike protein and is the “most divergent” variant so far. University of Arizona virologist Michael Worobey said, “I haven’t been one to panic about new variants, but this one looks like it might be the perfect storm.” Scientists do not yet know whether the Omicron variant can evade current vaccines or cause more severe forms of Covid or can be treated with current Covid therapeutics, including antivirals and monoclonal antibodies. The Omicron variant is surging through South Africa’s Gauteng province around Johannesburg where it is outpacing the Delta variant. However, South African scientists believe the Omicron variant causes less severe Covid disease than does the Delta variant. Dr. Anthony Fauci said that currently available booster shots will provide at least a partial shield of protection against the Omicron variant. But Moderna’s CEO predicted that existing vaccines would be much less effective at combating the Omicron variant compared with previous variants, spooking financial markets in the U.S., Europe and Asia. He said it would take months for pharmaceutical companies to manufacture new Omicron-specific doses. To try to control the spread of the Omicron variant, the U.S. is one of several countries to ban travel from southern Africa: specifically, the U.S. has banned travel from Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa, and Zimbabwe. However, the U.S. ban does not apply to American citizens or to lawful permanent residents. And the Covid pandemic has shown that travel bans often fail to keep highly infectious variants contained because infected people still can travel from third countries from which travel is not banned. For example, a study conducted in February 2020 showed that travel bans can delay the arrival of an infectious disease in a country by only days or a few weeks at most. Even without the Omicron variant, Europe is experiencing another wave of Covid cases, with deaths rising as well, sending some European countries into lockdowns. President Biden has ruled out a nationwide lockdown in the U.S. Instead, he is urging everyone to get vaccinated. Stock markets around the world had their worst day in 2021 on “Black Friday,” November 26th. Oil prices also plunged due to uncertainty about the economic risks posed by the Omicron variant. The price of oil has been especially sensitive to virus restrictions that keep people at home and discourage them from traveling. Airline stocks, e.g., fell nearly 15%. On November 26th, drug maker Merck released data showing its experimental pill Molnupiravir designed to treat Covid disease at home is less effective than early clinical trials predicted, a finding that emerged as the FDA raised questions about the drug. The pill reduces hospitalization and death among high-risk patients by only 30%, not 50% as previously predicted. Nevertheless, today an expert panel recommended that the FDA authorize Merck’s pill for high-risk adults, which the agency could do within days. Virologist Michael Worobey, who once believed that the coronavirus emerged somehow from risky laboratory research in Wuhan, China, now believes the virus spread to humans from a Wuhan market where wild and domestically farmed animals were sold and butchered. He says half of the earliest documented Covid cases were among people with a direct connection to the Huanan Seafood Market, the probable source of the outbreak. The first patient known to fall ill with Covid was a female seafood vendor at the market who became symptomatic on December 11, 2019. . The White House announced on November 24th that 92% of federal employees and members of the U.S. military have had at least one coronavirus vaccine shot. Another 4.5% are completing vaccinations or have a pending request for exemption. About 59% of all Americans are fully vaccinated. 2 By November 12th, the U.S. had vaccinated more than 195 million people. Some senior health officials in the Biden administration pushed to expand booster shots to all adults as soon as possible, but CDC Director Rochelle Walensky voiced reservations about such an expansion. Nevertheless, on November 19th, the CDC authorized booster shots of the Pfizer and Moderna vaccines for all adults 18 years of age and older. Nine states in the U.S. were already offering booster shots to all adults, even though official CDC guidelines then limited booster shots to those with pre-existing medical conditions and people 65 years and older. Travel for Thanksgiving was the biggest holiday travel surge during the pandemic. The University of Utah encouraged all members of the campus community to get tested for Covid before attending Thanksgiving gatherings, whether they were vaccinated or not, and then get tested again before returning to campus after the holiday break The OSHA and CMS Vaccination Mandates On November 16th, the Judicial Panel on Multidistrict Litigation randomly selected the Sixth Circuit Court of Appeals to hear the consolidated challenges to the OSHA emergency temporary standard rule requiring many private sector workers to either get vaccinated against Covid disease or be tested weekly. Under federal law, when multiple petitions for review of a single agency action are filed in at least two courts of appeal within 10 days, the petitions are consolidated and heard by one court chosen at random. As of November 16th, there were 34 petitions for review of the OSHA rule across all the federal circuit courts. The Sixth Circuit leans conservative. It is made up of eight sitting judges appointed by Democratic presidents and 21 appointed by Republican presidents. Of its 16 active judges, 11 were appointed by Republican presidents and five by Democratic presidents. Employment law experts say the government faces a high bar in fighting off the challenges to the rule, which was created by OSHA without a period of public notice and comment. OSHA has failed to meet the statutory hurdle for issuing emergency temporary standards in past judicial reviews of emergency rules. Christian schools, churches, and seminaries contend that the OSHA rule violates their constitutionally protected religious freedom. Because the rule has no faith-based carve out for them, it forces religious employers to violate their sincerely held religious beliefs against vaccination. The American Medical Association and more than 60 other healthcare groups called on employers to voluntarily implement President Biden’s contested vaccine-or-testing/masking mandate. However, a federal judge in Missouri partially halted another one of the Biden administration’s key vaccine mandates requiring healthcare workers at facilities receiving funding through the Centers for Medicare and Medicaid. The judge’s preliminary injunction halts the CMS mandate in the ten mostly Republican-dominated states which filed the lawsuit, including Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming. 3 The U.S. Economy Retail sales surged 1.7% in October as Americans got a jump on holiday shopping despite paying more for gasoline, groceries, and other everyday goods. In October, Americans bought cars, electronics, sporting equipment, and other big-ticket items. U.S. consumers who cut back on spending during pandemic-affected 2020 are now using their savings for holiday spending. Although consumers are very concerned about inflation, that has not held back their spending. Holiday sales are expected to increase by about 10% compared to a year ago. Data show a huge divergence between what people say about the state of the economy, which is quite negative on average, and what they say about their own personal finances, which is fairly positive. This divergence suggests people’s views on the economy reflect what they are seeing on the news media they watch, rather than what they are experiencing in their own lives. On November 23rd, as nearly 50 million Americans were preparing to drive for Thanksgiving holiday travel, President Biden authorized releasing 50 million barrels of oil from the nation’s Strategic Petroleum Reserve to attempt to combat high gasoline prices. He also directed the Federal Trade Commission to look at whether oil companies are engaged in price gouging. The White House said that corporations are partly to blame for the dramatic increase in U.S. inflation as large firms in highly concentrated industries (e.g., the meatpacking industry) charge higher prices to consumers as they benefit from high profits. Last week, U.S. jobless benefit claims dropped for the eighth straight week to 199,000, the lowest level in more than 50 years. The pre-pandemic level was 220,000 per week. Some commentators believe that current inflation is not “transitory” but is long term. They believe that the goal of U.S. economic expansion needed during the pandemic, insofar as it’s achieved through low interest rates and Federal Reserve asset purchases that pump new money into the economy, may need to be sacrificed to control inflation and stabilize prices. President Biden has agreed to nominate Federal Reserve Chief Jerome Powell for a second term as chair, signaling commitment to continuity in U.S. monetary policy amid heavy economic headwinds. On November 19th, the U.S. House of Representatives passed President Biden’s Build Back Better Bill, a $2 trillion social safety net/climate change spending bill, with only Democrats voting for it. It is potentially one of the most significant overhauls of domestic policy in generations: • • • • • • • It provides universal prekindergarten for all 3- and 4-year-olds. It expands tax credits for the energy industry, public transit and consumers who switch to renewable energy, and tax credits to retrofit buildings and for electric vehicle purchases. It adds hearing coverage to Medicare and allows the government to negotiate lower prices for a limited number of prescription drugs. It extends tax credits and child payments to lower-income workers. It infuses billions of dollars to improve public housing and affordable housing. It provides four weeks of paid family leave. It protects about two-thirds of undocumented workers from deportation. The House bill still needs to pass the Senate, where it faces numerous obstacles. If the Senate amends the bill substantially, the House would have to pass the Senate version for the bill to become law. 4 Law Firms and Pandemic-Affected Legal Work Law firms of all sizes in the U.S. saw client demand for legal services and law firm income increase in the first nine months of 2021. According to a Wells Fargo survey, law firms reported a 14.3% average increase in revenue, more than double the 5.7% increase reported in 2020. Big Law firm Buchalter, based in Los Angeles, announced the opening of its Salt Lake City office staffed by seven lawyers, two paralegals and two law clerks from Jones Waldo Holbrook & McDonough., Buchalter President and CEO Adam Bass said, “The decision to open an office in Salt Lake City was a simple one as the city’s real estate, technology, and financial services industries are all thriving.” Law firms and law departments nationally are dealing with “massive confusion” in advising their clients and companies how to report their environmental, social, and governance activities (ESG) to the U.S. Securities and Exchange Commission (SEC). The SEC is slated to promulgate a rule for mandatory climate risk disclosures by early next year, which could bring consistency to climate risk disclosures across the U.S. The SEC released guidance in 2010 for climate-related disclosures, but this is out-of-date, generic, and not industry-specific or detailed. Also, multinational corporations face different mandatory ESG reporting frameworks in the European Union and in individual countries. Bloomberg Law predicts that the Omicron variant will indirectly cause more terminations of global merger-and-acquisition deals currently being negotiated. It noted two such periods of increased M&A terminations occurring several months after the peak of Covid cases in May 2020 and after the second peak of cases in March 2021. A major Covid event – like the discovery of the Omicron variant – adversely affects stock markets, travel, business valuations, and thus M&A negotiations. 5