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Judge blocks Obama contracting rules nationwide

Another day, another Obama administration regulation blocked nationwide by a federal court in Texas.

A federal judge in Beaumont issued an order Monday night halting enforcement of new rules requiring many U.S. government contractors to disclose labor law violations, including workplace safety violations, when bidding for contracts.

The policy, ordered by President Barack Obama, was to kick in Tuesday for contracts of $50 million or more and next April for contracts worth more than $500,000. The administration's goal was to deny federal contracts to firms with a history of such infractions.

However, U.S. District Court Judge Marcia Crone blocked the new rules Monday in response to a lawsuit filed by the Associated Builders & Contractors, its southeast Texas affiliate and the National Association of Security Companies. She said the new system went beyond what Congress authorized.

"The Executive Order [and related policies] arrogate to contracting agencies the authority to require contractors to report for public disclosure mere allegations of labor law violations, and then to disqualify or require contractors to enter into premature labor compliance agreements based on their alleged violations of such laws in order to obtain or retain federal contracts. By these actions, the Executive Branch appears to have departed from Congress’s explicit instructions dictating how violations of the labor law statutes are to be addressed," wrote Crone, an appointee of President George W. Bush.

Crone also said the required disclosures appeared to amount to compelled speech in violation of the First Amendment.

The judge said she "has authority" to impose an injunction "on a nationwide basis and finds that it is appropriate to do so in this case."

The current deadlock on the Supreme Court makes it particularly attractive for plaintiffs looking to block Obama administration policies to file suit in federal courts in Texas, sometimes directing their cases to particular judges there. Any appeals go to the 5th Circuit, widely viewed as the most conservative federal appeals court in the country.

With the eight-justice high court ideologically split, the federal government could have trouble getting a stay of any injunction, leaving the district court and 5th Circuit rulings to essentially control policy across the nation.

Obama's 2012 executive actions on immigration were a case in point in this regard. When the Supreme Court split 4-4 on the issue, the 5th Circuit ruling upholding a nationwide injunction was let stand, gutting much of Obama's immigration legacy.

Another federal court in northern Texas has issued a nationwide injunction barring the Obama administration from enforcing Education Department guidance requiring schools to allow transgender students to use bathroom and changing facilities consistent with their gender identity. That ruling has already been appealed to the 5th Circuit, but appears likely to remain in place for some time, particularly if the Supreme Court remains shorthanded.

The legal tactic could pose a particular threat if Hillary Clinton wins the White House, but Congress remains unfriendly to legislation she favors. She's likely to try to change policy through executive orders and similar moves, leading to legal challenges and the potential for nationwide injunctions that the high court can't muster the votes to disturb.

Crone may have stronger legal grounds for the nationwide injunction in the case she is handling because the business groups have members nationwide who could be affected by federal contracting policy anywhere. Much of the criticism of the immigration and transgender-related cases surrounded the fact that they were brought by a limited number of states, but have wound up dictating federal policy in other states that did not join the suits.

A Justice Department spokeswoman said lawyers are studying Crone's decision and considering their options.

Labor Department spokesman Jason Surbey defended the rules and said the administration is "confident" they will be upheld in the courts.

"The Fair Pay and Safe Workplaces final rule and guidance promote contracting efficiency by ensuring compliance with basic labor standards during the performance of federal contracts, level the playing field so that contractors who comply with the law don't have to compete against those that don't, and promote responsible stewardship of taxpayer dollars," Surbey said. "We are confident that the rule and guidance are legally sound and the Department of Justice is considering options for next steps."