News

Judiciary Seeks 2019 Funding, Highlights Cost-Saving Successes

Representatives of the federal judiciary has asked Congress to provide $7.22 billion in fiscal year 2019 to fund continuing operations of the judicial branch, the Administrative Office of the U.S. Courts reports. The request includes funding to sustain cybersecurity initiatives and ensure sufficient security at federal courthouses.

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Federal Court Favors Lender in FDCPA Case

A recent decision by the Sixth Circuit Court of Appeals in Cincinnati will be a comfort to lenders in regards to the Fair Debt Collection Practices Act, Grant Stephenson of Porter Wright says. In a recent blog post for the Banking and Finance Law Report, Stephenson looks at how Hagy v. Demers & Adams, in which the court decided in favor of the purported debt collector, imposes new judicial limitations on Congress when it creates federal statutory causes of action.

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Sevier County Lawyer Censured

Sevier County lawyer Andrew Nicholas Wilson received a public censure on April 16 from the Board of Professional Responsibility. Wilson represented a client whose case was moved from state court to federal district court. Wilson was not admitted to practice in federal district court and failed to respond to the court’s request to file a motion to appear pro hac vice, to the court’s show cause order, or to the court’s order to appear. Wilson was accordingly removed as counsel of record and reprimanded by the district court.
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Crenshaw Describes Successes Amidst Crisis

The Nashville Post today published an interview with Chief U.S. District Court Judge for the Middle District of Tennessee Waverly Crenshaw, who described successes during a year on the bench in “crisis mode.” Following retirements of other judges, Crenshaw and Judge Aleta Trauger were left with more than 800 cases each this past year. Looking back on the first year of his seven-year term, Crenshaw said he was “fairly pleased” with the results, and cited strong communication between himself, Trauger and magistrate judges as the reason for their ability to stay afloat amidst the overload.
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Supreme Court Case to Determine Constitutionality of Administrative Law Judge Appointments

The U.S. Supreme Court on April 23 will hear arguments in Lucia v. Securities and Exchange Commission (SEC), a case that could potentially have a big impact on administrative agencies, The National Law Review reports. In this case, the court will consider arguments – including those from the U.S. Solicitor General – that the way that the SEC’s administrative law judges (ALJs) are appointed violates the U.S. Constitution’s Appointments Clause
 
SEC ALJs are hired through the government’s civil service process and are not treated as “inferior officers” who are appointed pursuant to the Appointments Clause. Lucia asks whether hiring ALJs this way violates the Appointments Clause, because they have all the hallmarks of an “inferior officer” under Supreme Court precedent, an argument that failed to convince the D.C. Circuit Court. There the SEC argued successfully that its ALJs were not “inferior officers” because they did not issue “final” decisions and did not exercise “significant authority” under federal law.
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Ceremony for Judge Debra Poplin Planned for April 27 in Knoxville

An investiture ceremony and reception for U.S. Magistrate Judge Debra C. Poplin will be held on April 27 at 2 p.m. in the Special Proceedings Courtroom at the Howard H. Baker Jr. U.S. Courthouse, 800 Market Street in Knoxville. RSVP by Friday.
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Davidson County Lawyer Censured

Davidson County lawyer Robert Elliott McGuire received a public censure from the Board of Professional Responsibility of the Tennessee Supreme Court on April 10. The Nashville Post reports that McGuire, who in 2014 made an unsuccessful bid for Nashville District Attorney, was hired as a federal prosecutor just last week. In October of 2013, McGuire made statements in the rebuttal closing argument of a criminal prosecution that referenced material which had been excluded by the trial court in a pretrial order. Further, the statements were inappropriate, served no legitimate purpose, and resulted in reversal of the conviction by the Court of Criminal Appeals. A spokesperson for U.S. Attorney Don Cochran said the office was aware of the proceedings when it decided to hire McGuire.
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Lawsuit Involving Construction of Oak Ridge Uranium Processing Facility Moved to Knoxville

A federal lawsuit that asks for an environmental review of the new multi-building design for the Uranium Processing Facility (UPF) at the Y-12 National Security Complex has been transferred from Washington, D.C., to Knoxville, reports Oak Ridge Today. The transfer was requested in September by the defendants, U.S. Energy Secretary James Richard “Rick” Perry and Frank G. Klotz, former administrator of the National Nuclear Security Administration, an agency within the U.S. Department of Energy that manages nuclear weapons programs and facilities. United States District Judge Dabney L. Friedrich, who was assigned the case in December, granted the motion to transfer the lawsuit from the District of Columbia to U.S. District Court for the Eastern District of Tennessee on March 23.
 
The complaint argues that a new environmental impact statement should be prepared for the new design for the UPF, the largest federal construction project in Tennessee since World War II. The plaintiffs allege that the use of several old buildings at Y-12 to house nuclear weapons work is risky because the old buildings could collapse during a major earthquake, possibly leading to a nuclear accident that could cause the release of radiological materials. Federal officials denied that allegation and others in a 29-page answer filed Sept. 29, 2017, calling the allegations vague, ambiguous or speculative, adding that safety and technical analyses are underway at Y-12.
 
The plaintiffs previously listed the reasons for filing their complaint in the District of Columbia, citing the fact that multi-building UPF was made by a federal agency in the Washington, D.C., area; the named defendants are (or were) located there; and the information that the NNSA allegedly failed to consider originated in other federal agencies in the nation’s capital. The plaintiffs also said the important issues raised in the litigation — issues regarding the safety of the nation’s nuclear weapons program are “issues of overriding national significance and interest,” which favored keeping the case in Washington, D.C.
 
The defendants, however, asked to move the lawsuit to East Tennessee stating, “This question should be decided in the Eastern District of Tennessee, where the Y-12 Complex is located,” a September 28 memorandum supporting its motion to transfer. “The matters at issue, in this case, are local at every turn,” the government attorneys said.
 
Granting the motion to transfer, Friedrich said private and public interest factors both weigh in favor of moving the case to East Tennessee.“There is a substantial local interest in having this action decided in Tennessee,” she said. “The potential health and environmental effects in the locality of the Y-12 Complex and its surrounding areas present unique hazards that gravely impact residents in the Eastern District of Tennessee."
 
The Y-12 complex was built to enrich uranium for atomic weapons as part of the top-secret Manhattan Project during World War II, and it remains the nation’s primary site for processing and storing highly enriched uranium used in nuclear weapons.
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New Iowa Law Allows Controversial Health Plans

Last week, Iowa Governor Kim Reynolds (R) signed into law a bill that allows Iowa Farm Bureau to collaborate with the state’s dominant insurer to sell “health benefit plans,” a strategy that contends that not all health plans are health insurance, reports The Washington Post. The law says such plans “sponsored by a nonprofit agricultural organization… shall be deemed not to be insurance” meaning they will not have to comply with federal requirements. 
 
The law has sparked debate over whether the strategy is a creative path to offer some residents an alternative to increasing prices in the insurance marketplace or a path to substandard coverage that will divide the healthy from the sick. Some feel that this bill is an aftereffect of Congress and the Trump administration’s declaration that Americans who flout the law’s individual insurance mandate will no longer be charged penalties. “If the ACA’s insurance rules can’t be repealed, then an alternative is to get people the option of escaping them,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a non-profit organization that focuses on major health care issues facing the nation. “Without the penalty, the door is wide open for plans like this.”
 
Iowa Insurance Commissioner Doug Ommen said that he is officially undecided about the new Farm Bureau law but that he sympathizes with the need for more-affordable coverage. As consumers have been “hammered” by the Affordable Care Act (ACA) rates, he said, enrollment in Iowa’s marketplace has tumbled from nearly 75,000 in 2016 to about 61,000 last fall to 46,000 last month. According to Ommen, the Farm Bureau modeled its idea after a similar arrangement sponsored by the Tennessee Farm Bureau, which began decades ago and has continued in the ACA era. The Obama administration never challenged it.
 
The Farm Bureau plan is the state’s second attempt to circumvent the ACA. Last year, the state’s insurance commissioner asked federal health officials to allow Iowa to take about $350 million in ACA money for 2018 and use it in different ways to help people pay for plans outside the marketplace. When the government had not given approval as last fall’s ACA enrollment season neared, Iowa withdrew the proposal.
 
In a bill-signing ceremony, the governor contended that Iowa’s individual insurance market had ample choices and “reasonable” premiums before the ACA left it “in collapse.” After urging Congress to “fix this problem,” Reynolds recounted Monday, she said “we are done waiting” and urged state lawmakers to find their own solution. “That is exactly what they did.”
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Pacer Fees Violated Federal Law, Judge Rules

U.S. District Judge Ellen Segal Huvelle ruled Saturday that the federal judiciary violated federal law by using Pacer fees for courtroom technology and other projects, the ABA Journal reports. Huvelle’s ruling comes in a lawsuit that contended Pacer fees violate federal law because they exceed the actual costs of providing records. The judge disagreed with the plaintiffs’ contention that law limits Pacer fees to just the cost of running Pacer, but she also rejected the government’s argument that the fees can be used to fund anything related to the dissemination of information through electronic means. Pacer fees must be used for services that provide the public with access to information stored in the docketing system, she ruled. 
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Are Aerosol Cans the Next Federal 'Universal Waste' to be Recycled?

Remember back in the ‘60s or ‘70s or ‘80s when, against all of the rules, kids in the neighborhood would play ‘Army’ and create a flamethrower from certain items around the house? [Warning: don’t be a knucklehead and try to recreate the memories!!!] These days, very stringent regulations pursuant to the federal Resource Conservation and Recovery Act (“RCRA”) generally apply to those aerosol canisters due to the ignitability characteristics that used to fascinate so many of us. Now, EPA has recently proposed a rule — 83 Fed. Reg. 11654, March 16, 2018 — to redefine hazardous waste aerosol cans as ‘Universal Wastes,’ a classification the agency believes can enhance recycling if it applies the lower standard to discarded aerosol cans. This will ease the management and handling requirements for aerosol cans by adding many of those to a federal ‘universal waste’ list that includes other ubiquitous items such as fluorescent bulbs or lamps, some pesticides and certain batteries.
 
The EPA believes the rule change may encourage aerosol can recycling. The EPA also proposes criteria for puncturing/draining the vessels. The rule changes, if adopted, would allow longer collection/storage periods for the cans at retail stores or a facility and the changes could increase (up to five times greater) the amount that one could accumulate on-site. The EPA has published the proposed rule on its website. Comments on the proposal are encouraged by April 16 and must be submitted to the government no later than May 15 at Docket Number EPA-HQ-OLEM-2017-0463 for consideration. If you would like to discuss this proposed rule, preparing a comment to be submitted, or any other environmental matter, please contact David at dhigney@gkhpc.com, or call him at 423.756.8400, ext. 230.
 

David Higney is a past chair of the Tennessee Bar Association’s Environmental Law Section and continues to serve on the Section’s Executive Council. Higney is licensed in both Tennessee and Georgia and has concentrated his practice in business litigation and environmental matters (regulatory and advocacy) before state and federal agencies/tribunals for over 25 years.
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Recent Ruling by Sixth Circuit Court of Appeals Gives Transgender Workers New Protection Under Title VII

Employers are moving to adopt or strengthen policies to prevent bias against transgender people after the latest in a series of court rulings that have extended protections for an increasingly diverse workforce, The New York Times reports. A recent opinion by the Sixth Circuit Court of Appeals maintains that transgender people are protected by the civil rights law that bans workplace discrimination based on sex, rejecting the position taken by Attorney General Jeff Sessions in October 2017.
 
The case was brought by the Equal Employment Opportunity Commission (E.E.O.C.) on behalf of a funeral director fired by a Michigan funeral home after informing the owner that she intended to transition from male to female and would dress as a woman while at work. Scott Rabe, an expert on employment law at the firm Seyfarth Shaw, said that the ruling was important because “it addresses two hot-button topics in employment law: the scope of the definition of ‘sex discrimination’ under Title VII and the impact of laws protecting the free exercise of religion in the workplace.”
 
The funeral home maintained that it did not violate federal law by requiring the employee to comply with a sex-specific dress code. Additionally, the owner of the home, Thomas Rost, said that forcing him to employ the transgender worker would impose a substantial burden on his sincerely held religious beliefs, violating the Religious Freedom Restoration Act of 1993. In court papers, Rost said he wanted to run his business in keeping with his religious belief that “a person’s sex (whether male or female) is an immutable God-given gift and that people should not deny or attempt to change their sex.”
 
In a memorandum to Justice Department lawyers, Sessions said that “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status.” The court disagreed, saying that employees may not be discriminated against because they fail to conform to “stereotypical gender norms” — in this case, an employer’s notion of “how biologically male persons should dress, appear, behave and identify… Job discrimination based on a person’s transgender status violates Title VII of the Civil Rights Act of 1964” the court ruled. “Discrimination based on transgender status is a form of sex discrimination,” said the decision, written by Judge Karen Nelson Moore for a unanimous three-judge panel, because “an employer cannot discriminate against an employee for being transgender without considering that employee’s biological sex.”
 
“The ruling is a big win for the Equal Employment Opportunity Commission and for transgender people,” said Rabe. “The court sent a strong message that the Religious Freedom Restoration Act has minimal impact on the E.E.O.C.’s authority to enforce the anti-discrimination laws under Title VII of the Civil Rights Act.” The court decision is binding in states covered by the Sixth Circuit: Kentucky, Michigan, Ohio and Tennessee, but its reasoning could certainly influence future decisions. The funeral home has not said whether it will appeal the ruling. You can read the court's opinion using this link.
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Solo Practitioner Wins Unanimous U.S. Supreme Court Decision

In a rare feat, a solo practitioner from the U.S. Virgin Islands yesterday won a unanimous verdict from the U.S. Supreme Court, Above the Law reports. The court decided Hall v. Hall, a family dispute in which solo attorney Andrew Simpson represented the losing party in a lower court’s decision. Though the odds were stacked against Simpson, including an amicus brief filed by retired federal district court judges that urged the court to rule against his client, Simpson ultimately won with every justice ruling in his favor.
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Former Skadden Associate Charged in Russia Probe Seeks Leniency

Alex van der Zwaan, the former Skadden, Arps, Slate, Meagher & Flom associate who pleaded guilty to lying in the Russia investigation earlier this year, told a Washington, D.C., judge that his cooperation and remorse justify a non-jail sentence, reports The National Law Journal.

Van der Zwan’s lawyer, Cooley partner William Schwartz, wrote in a sentencing memo to U.S. District Judge Amy Berman Jackson that the 33-year-old’s career is ruined, and that he has “been serving a sentence while stuck in limbo” in the United States. The memo states that while it did not excuse his conduct, van der Zwaan lied to investigators in a Nov. 3, 2017, meeting because he feared for his career, as Skadden lawyers represented him at that time.

“During the interview, Alex was keenly aware that he was not speaking only to the OSC,” the document said. “Alex was represented by Skadden lawyers, and anything he shared with the OSC would simultaneously be heard by Skadden. In his mind, his boss was listening to every word.” The memorandum continues: “Focused on preserving his career at Skadden, and fearful that truthful answers could lead to discovery of the recordings (and in particular, the discovery that he had recorded a Skadden partner), Alex made a terrible decision… The conduct that brings Alex before this court was inexcusable… And while his actions following his initial meeting with the OSC cannot absolve him from culpability, they are compelling mitigating factors in considering just punishment.”

In their own memo, lawyers for Mueller told the judge she should not rule out prison time, because of a “scarcity of mitigating factors and several aggravating circumstances.” They said van der Zwaan “is a person to whom every advantage in life has been given,” and that the government rightly expected “candor and uprightness” from him. “While there might eventually be additional professional consequences that befall a foreign lawyer who commits a United States felony, those consequences do not themselves obviate the need for his current sentence to reflect the seriousness of his crime, to promote respect for the law, or to provide adequate specific and general deterrence,” prosecutors wrote.

The filing also included pleas for a lenient sentencing from van der Zwaan’s wife, the daughter of a Russian oligarch who is expecting a baby in August, and his mother, whom the filing said he helps with errands and household tasks. Van der Zwaan faces up to six months in prison.

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Federal Law CLE Hours Available Online

Did you miss the Federal Law Forum last July? Need some CLE hours? Want to learn about the Federal Torts Claims Act, best practices, settlement considerations and other great topics? Click here to view our online resources. 

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10 Essential Documents for Your Practice

Instructions and rules for client file retention, list of current curse and copy of bank’s form for IOLTA access are three of the top 10 documents attorneys need for succession planning and practice management. Learn more in this 3-hour dual credit workshop with attorney Timothy Takacs.

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The Protest Movement as a Tool for Social Change: Fifty Years Post-King

The Ben F. Jones Chapter of the National Bar Association presents a dynamic day of programming in recognition of 50th anniversary of the death of Dr. Martin Luther King in Memphis. This program explores the protest that brought Dr. King to Memphis in 1968 and the legacy that his untimely death has left on the fabric of the city. The event will focus on the protest movement in its current state as well as provide updated information on the law surrounding assembly, protest and municipal responsibility.
 
The program features local historical figures who worked with Dr. King, representatives of the media, City of Memphis, local activists, attorneys and judges.
 
Speakers and producers include:
  • Barbara Arnwine, Esq., CEO and Founder of the Transformative Justice Coalition, Washington, D.C. 
  • Judge Earnestine Hunt Dorse, Municipal Court Judge, Memphis
  • Bill Cody, Burch, Porter and Johnson, Memphis
  • Earle Schwartz, Memphis Bar Association President, Memphis
  • Judge Bernice Bouie Donald, United States Circuit Judge of the United States Court of Appeals for the Sixth Circuit, Memphis
When: Feb. 23, 9 a.m. CST
 
Where: Fogleman Business Center, First Floor Amphitheater, 330 Innovation Dr., Memphis, Tennessee 38152
 
Contact Florence Johnson by email or call her at 901-725-7520 for more information.
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Investiture Ceremony Set for Overbey

An official investiture and celebration reception for J. Douglas Overbey, United States Attorney Eastern District of Tennessee, has been set for Feb. 16 at 2:30 p.m. at the U.S. District Court, 800 Market Square in the Ceremonial Courtroom. RSVP by Monday to jeanne.porter@usdoj.gov, 865-225-1711.

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White Nationalist Claims He Can't Get a Lawyer, Wants Charlottesville Suit Tossed

Richard Spencer— white nationalist and president of the National Policy Institute, an "alt-right" think tank and lobbying group— has filed a pro se motion to dismiss a lawsuit filed against him as a result of the recent Charlottesville, VA protests over removal of controversial statues honoring Confederate generals which left one dead and dozens injured. The suit, filed in federal district court of Virginia in Oct. 2017, alleges the plaintiffs were injured, harassed, intimidated and assaulted by the white supremacist groups in the city.
 
In the motion, Spencer claims that the blame for violence falls on the anti-fascists, or Antifa, who showed up to protest he and his cohorts' ideas and on the police, who he says did too little to discourage the violence. "Harsh and bold words, as well as scuffles, are simply a reality of political protests, which are, by their very nature, contentious and controversial," Spencer wrote. "Free societies, not only in the United States but around the world, accept this as a cost of free assembly and maintaining a vibrant political culture."
 
According to the document, Spencer maintains that he is unable to find an attorney due to the controversial nature of the case despite "the supposed but apparently illusory ethical obligation lawyers have to represent unpopular clients and to assure at least a semblance of a fair trial." "The plaintiffs, in this case, have enormous resources at their disposal. Several major law firms, likely working pro bono, with probably dozens of attorneys and deep pockets for depositions and other discovery expenses are lined up to represent them." said Spencer.
 
The motion in its entirety can be read here.
 
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TBA Gears Up for 2018 Mock Trial Tournament

The Tennessee Bar Association will host the upcoming Tennessee High School Mock Trial Tournament on March 23 and 24 in Nashville. The Mock Trial is a two-day, single-elimination bracket-style competition where 16 high schools face-off against each other in the Davidson County Courthouse. Each team is scored on their trial preparation and skills. 

We need TBA volunteers to help be bailiffs and jurors (scorers) for the event. After signing up, we will send you a Volunteer Memo with all the information you need for competition including; parking, hotel, downtown map, courthouse rules, and reimbursement information. Come be a part of the Young Lawyers Divisions’ March Madness! Feel free to contact YLD Director Stephanie Vonnahme with any questions.

To volunteer for this event, click here.

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Medearis Appointed New Eastern District Court Clerk

John Medearis of Chattanooga will serve as clerk of the U.S. District Court for the Eastern District of Tennessee starting Feb. 13, the Hamilton County Herald reports. He succeeds Debbie Poplin, who has been appointed a U.S. magistrate judge for the Eastern District of Tennessee, succeeding retiring Magistrate Judge Clifford Shirley. Medearis has served as chief deputy clerk of the district for the past 17 years. The Eastern District of Tennessee covers 41 counties, with offices in Knoxville, Chattanooga and Greeneville.
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Eastern District Prosecutors Collected More than $11M in Fines, Penalties Last Year

Federal prosecutors in the Eastern District of Tennessee collected more than $11 million from criminal and civil actions in 2017, the Times News reports. The funds come from fines, restitutions and assessments, and went to victims or into the Crime Victims Fund. $9.3 million was from criminal actions and $1.76 million from civil ones.
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Congress Delays 'Cadillac Tax' and Other ACA-Related Taxes and Fees

Congress on Monday passed the Federal Register Printing Savings Act, which temporarily continued funding federal government activity and appropriated funds to various health-related programs such as the Children's Health Insurance Program, Medicaid and childhood obesity programs.
 
The Act also addressed the effective date for the controversial 40 percent excise tax on high-cost health care, commonly referred to as the "Cadillac Tax," which has been delayed until 2022. At a minimum, the new two-year delay gives employers and plan sponsors more time to adjust health plan design to avoid the Cadillac Tax, legislation that has been unpopular on both sides of the aisle.
 
The Cadillac tax was created as part of the Affordable Care Act largely to help fund benefits to the uninsured under the law. The U.S. Joint Committee on Taxation estimates that delaying the medical device tax will lower revenue by $3.8 billion over a decade, delaying the Cadillac tax will cost $14.8 billion and suspending the health insurance tax will cost $12.7 billion.
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Idaho to Allow Non-ACA Approved Health Insurance Plans

Idaho officials said they will begin allowing insurers to sell new plans that don't meet requirements set by the Affordable Care Act. In a bulletin issued Wednesday by state Department of Insurance Director Dean Cameron, "state-based health benefit plans" or "state-based plans" will not be subject to the federal restrictions applied to"grandfathered" or "transitional" plans.
 
Under these guidelines, insurers who participate are free to deny people coverage or charge more based on a customer's medical history, a practice that's illegal under Obama Care. Officials argue that the state needed to act to allow for cheaper plans that would help attract younger, healthier people back into an ailing market, however, critics say that this will likely mean steep premium increases for middle-class individuals with pre-existing conditions.
 
State officials said they are trying to press forward with the changes on their own without any action from Washington. The move will almost certainly be met with legal challenges by ACA proponents, as it has drastic implications on federal enforcement of individual market requirements.
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