Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (July 18–July 24, 2022)

Legal Sidebari

Congressional Court Watcher: Recent

Appellate Decisions of Interest to Lawmakers

(July 18–July 24, 2022)

July 25, 2022

The federal courts issue hundreds of decisions every week in cases involving diverse legal disputes. This

Sidebar series selects decisions from the past week that may be of particular interest to federal lawmakers,

focusing on orders and decisions of the Supreme Court and precedential decisions of the courts of appeals

for the thirteen federal circuits. Selected cases typically involve the interpretation or validity of federal

statutes and regulations, or constitutional issues relevant to Congress’s lawmaking and oversight

functions.

Some cases identified in this Sidebar, or the legal questions they address, are examined in other CRS

general distribution products. Members of Congress and congressional staff may click here to subscribe to

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attorneys.

Decisions of the Supreme Court

Last week, the Supreme Court took action in response to an emergency application, denying a request for

a stay of a district court vacatur, but agreeing to review the case in its October 2022 term:

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Immigration: In a 5-4 decision, the Court denied an application by the United States to

stay a district court order that vacated a 2021 Department of Homeland Security (DHS)

memorandum setting forth immigration enforcement priorities and guidance for

immigration officers. The United States also asked the Supreme Court to treat its

application as a petition for certiorari, and the Court did so and agreed to full review of

the case next term. The Court directed the parties to brief and argue three issues: (1)

whether the state plaintiffs have standing to challenge the 2021 DHS memo; (2) whether

the guidelines set forth in the memo contravene two statutes addressing immigration

detention and removal; and (3) whether the district order setting aside the guidelines is

barred by 8 U.S.C. § 1252(f)(1), which limits the scope of injunctive relief that lower

courts may provide in immigration detention and removal cases (United States v. Texas).

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(The Fifth Circuit decision denying the government’s motion to stay the district court’s

vacatur is discussed in a prior edition of the Congressional Court Watcher.)

Decisions of the U.S. Courts of Appeals

Topic headings marked with an asterisk (*) indicate cases in which the appellate court’s controlling

opinion recognizes a split among the federal appellate courts on a key legal issue resolved in the opinion,

contributing to a non-uniform application of the law among the circuits.

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Abortion: The Eleventh Circuit allowed a Georgia abortion law to go into effect,

vacating a lower court injunction issued prior to the Supreme Court’s decision in Dobbs

v. Jackson Women’s Health Organization that held that the Constitution does not confer a

right to an abortion. The circuit court held that a provision of the state law prohibiting

abortions in most cases after a fetal heartbeat is detected served the state’s legitimate

interest, recognized in Dobbs, in protecting prenatal life at all stages of development. The

court also ruled that an amendment made to Georgia’s state code, defining “natural

person” to include unborn children, was not unconstitutionally vague on its face, and that

any potential applications of the definition to constitutionally protected conduct were

properly brought in as-applied challenges (SisterSong Women of Color Reproductive

Justice Collective v. Governor of Georgia).

Administrative Law: In a decision that may have implications for the practice of

“midnight rulemaking,” in which agencies issue rules days before a change in

presidential administrations, a divided D.C. Circuit held that the Department of

Agriculture (USDA) improperly withdrew a rule submitted for publication in the Federal

Register days before President Donald Trump was inaugurated. On President Trump’s

first day in office, his administration sought to withdraw all pending rules by the Obama

Administration, including a USDA rule addressing the practice of “horse soring” which

had been submitted to (but not yet published by) the Office of the Federal Register.

Recent administrations have contended that, at any point before a rule’s actual

publication in the Federal Register, an agency may withdraw the rule without triggering

the Administrative Procedure Act’s (APA’s) requirements relating to the issuance,

modification, or rescission of a rule. The majority of the D.C. Circuit panel concluded

otherwise, holding that the plain text of the Federal Register Act rendered a rule valid

once it had been submitted for “public inspection” to the Office of the Federal Register,

triggering APA provisions that typically require notice-and-comment procedures before

the rule can be rescinded. The circuit court remanded the case to the district court for

further proceedings (Humane Society of the United States v. Dep’t of Agriculture).

*Bankruptcy: The First Circuit reaffirmed that the bankruptcy laws are subordinate to

the Takings Clause in holding that the Fifth Amendment precludes the impairment or

discharge of pre-petition takings claims for just compensation in proceedings under Title

III of the Puerto Rico Oversight, Management, and Economic Stability Act. The court

rejected the Financial Oversight and Management Board for Puerto Rico’s argument that

takings claims can be adjusted in bankruptcy. The court also split with the Ninth Circuit

by rejecting the Board’s contention that the protections of the Takings Clause only extend

to those claimants who still possess rights to specific property at the time of bankruptcy

(In re Financial Oversight & Mgmt. Bd. for Puerto Rico).

Bankruptcy: The Fifth Circuit vacated orders by the Federal Energy Regulatory

Commission (FERC) purporting to require a natural gas producer to continue performing

under filed-rate gas transit contracts even if the producer rejected those contracts in

bankruptcy. The court held that FERC’s powers under the Natural Gas Act do not

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override a debtor’s ability under a provision of the Bankruptcy Code, 11 U.S.C. § 365(a),

to reject and breach any executory contract, nor do they override the authority of a

bankruptcy court to decide rejection motions (Gulfport Energy Corp. v. FERC).

Bankruptcy: The Eleventh Circuit held that a creditor may file a post-petition claim for

the unpaid value of goods delivered to the debtor immediately before bankruptcy without

impairing the creditor’s defense against disgorgement of pre-petition payments.

Specifically, the court determined that a creditor’s “new value” defense (a creditor

receiving a preferential payment from a debtor gave “new value” in the form of goods or

services to the debtor after receiving the payment) against avoidance of pre-petition

transfers under 11 U.S.C. § 547(c)(4) is not offset by the debtor’s post-petition transfer

made in response to the same creditor’s claim under 11 U.S.C. § 503(b)(9). The court

concluded that the context of § 547(c)(4) provides that the statute’s reference to

“otherwise unavoidable transfers” is limited to pre-petition transfers (Auriga Polymers

Inc. v. PMCM2, LLC).

Civil Rights: The Ninth Circuit affirmed a lower court and deferred to the Department of

Justice’s (DOJ’s) interpretation of agency regulations implementing the Americans with

Disabilities Act (ADA), contained in a guidance document specifying measures hotels

could take to ensure compliance. The lower court dismissed a plaintiff’s claim that the

defendant hotel’s website did not comply with the regulations. The Ninth Circuit held

that the DOJ interpretation of the regulations contained in the guidance document was

reasonable and entitled to judicial deference. Because the defendant hotel complied with

the DOJ guidance document, the court held it also did not violate the associated ADA

regulations (Love v. Marriott Hotel Services, Inc.).

Criminal Law & Procedure: Joining other circuits that have considered the issue, a

divided Seventh Circuit held that reviewing courts should examine the underlying facts of

a defendant’s criminal offense to determine whether it is a “sex offense” under

§ 20911(5)(A)(ii) of the Sex Offender Registration and Notification Act (SORNA), as

applied through SORNA § 20911(7)(I), concerning sex offenses against minors. The

panel majority rejected the defendant’s argument that courts should employ a categorical

approach, which would have required that every application of the criminal statute under

which the defendant was convicted satisfy SORNA’s “sex offense” definition, or else the

defendant’s conviction would not be deemed covered (United States v. Thayer).

Criminal Law & Procedure: The Seventh Circuit affirmed a district court’s decision

denying an inmate’s motion for compassionate release under 18 U.S.C. § 3582(c)(1)(A).

The panel held that evidence of an inmate’s rehabilitation could not be a standalone basis

for granting compassionate release. The panel also held that the First Step Act’s

prospective amendment to one of the statutes under which the defendant was convicted,

18 U.S.C. § 924(c), which reduced the mandatory minimum sentence available for

convictions under that provision, was not an extraordinary and compelling reason for

compassionate release. The court concluded that a recent Supreme Court decision

addressing the First Step Act did not undercut circuit precedent upon which the panel

relied (United States v. Peoples).

Criminal Law & Procedure: The Ninth Circuit upheld a lower court’s revocation of a

defendant’s supervised release for violating 18 U.S.C. § 1001(a), which generally

outlaws materially false statements in matters within the jurisdiction of any branch of the

federal government. The defendant had submitted a monthly supervision report to his

probation officer that contained false statements, but claimed that because these

statements were later forwarded to a judge, his conduct was exempted by § 1001(b),

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which provides that the false statement bar does not apply to statements “submitted to a

judge or magistrate” in a judicial proceeding. The Ninth Circuit held that this exemption

did not apply, holding that the carve-out only exempted statements that the party directly

submitted to the judge or magistrate, and not to statements made to third parties in the

judicial branch that were later forwarded to specified judicial officers (United States v.

Oliver).

Criminal Law & Procedure: In a per curiam opinion, the Ninth Circuit held that the

United States violated the Insanity Defense Reform Act (IDRA) when it failed to

hospitalize a mentally incompetent criminal defendant committed to its custody after

more than eight months. A provision of the IDRA, 18 U.S.C. § 4241, provides that a

defendant found incompetent by a court shall be transferred to the custody of the

Attorney General to “hospitalize . . . for treatment in a suitable facility . . . for such a

reasonable period of time, not to exceed four months” as is necessary to determine

whether the defendant may attain competency to stand trial. A majority of the panel

further held that the four-month period specified in the IDRA only addressed the length

of the defendant’s hospitalization, not his pre-hospitalization commitment. Still, while

acknowledging the statute’s silence on the potential duration of the pre-hospitalization

period, the majority held that, at the very least, the government’s pre-hospitalization

delay could not exceed the four-month period permitted for hospitalization. The panel

held that the appropriate remedy was to order the defendant’s immediate hospitalization,

rather than to quash the indictment against him as the defendant had argued (United

States v. Donnelly).

Environmental Law: A divided Fourth Circuit held that a provision of the Clean Water

Act (CWA), 33 U.S.C. § 1319(g)(6)(A), which limits citizen enforcement suits for civil

penalties under the CWA if a state “has commenced and is diligently prosecuting an

action under a State law comparable to” the act’s civil penalty scheme, was not triggered

by a state’s notice that an entity failed to obtain a necessary permit. Examining the

features of a CWA civil penalty action, the majority held that two environmental groups’

citizen suit could proceed because the bar on citizen enforcement suits related to a state’s

diligent prosecution of a comparable action would not be triggered until the state agency

gave public notice of the action, which had not happened here (Naturaland Trust v.

Dakota Finance LLC).

Environmental Law: In three separate opinions, the Ninth Circuit upheld the U.S. Fish

and Wildlife Service’s (FWS’s) Comprehensive Conservation Plan for National Wildlife

Refuges in the Klamath Basin against challenges by environmental groups and

commercial farming lessees. In one case, the court held that the Kuchel Act of 1964 and

the National Wildlife Refuge System Administration Act (NWRSAA) require the FWS to

ensure that agricultural use of leased land in the refuges is “consistent” with and

“compatible” with “proper wildlife management,” rejecting the lessees’ argument that the

statutes elevate agricultural interests to a coequal purpose of the refuges. In the other

cases, brought by environmental groups, the court determined that FWS did not act

arbitrarily, capriciously, or contrary to law under the Kuchel Act, NWRSAA, or the

National Environmental Policy Act (NEPA) in adopting policies regarding continued

agricultural leasing, pesticide use, livestock grazing, and water allocations (Audubon

Soc’y of Portland v. Haaland; Ctr. for Biological Diversity v. Haaland; Tulelake

Irrigation Dist. v. U.S. Fish & Wildlife Serv.).

Environmental Law: The Tenth Circuit upheld FWS’s modification of certain trail paths

in the Rocky Flats National Wildlife Refuge against challenges under NEPA and the

Endangered Species Act (ESA). The court determined that the plaintiffs lacked standing

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to pursue their ESA claim and affirmed the district court’s dismissal of their NEPA

claims. The court decided that controversy surrounding the original opening of the

refuge, which was the former site of a nuclear manufacturing facility, did not render the

later actions at issue in this case “highly controversial” under 43 C.F.R. § 46.215(c) such

that FWS should have prepared a new environmental assessment under NEPA (Rocky

Mountain Peace & Justice Ctr. v. U.S. Fish & Wildlife Serv.).

Food & Drug: A divided Fifth Circuit denied flavored e-cigarette product manufacturers’

petitions for review of marketing denial orders issued by the Food and Drug

Administration (FDA). While a Fifth Circuit motions panel previously granted a stay of

the denial order after determining that the petitioners were likely to succeed on the

merits, the court here disagreed and concluded that petitioners failed to show FDA acted

arbitrarily and capriciously in considering submitted evidence. The court also held,

contrary to the petitioners’ argument, that 21 U.S.C. § 387j authorizes FDA to consider

comparative cessation evidence between different tobacco products (Wages and White

Lion Invs. L.L.C. v. FDA).

Firearms: The Third Circuit rejected a challenge to a 2018 DOJ firearms rule issued

under the authority of then-Acting Attorney General Matthew Whitaker, where plaintiff

contended that Whitaker’s service violated the Federal Vacancies Reform Act and the

Constitution’s Appointments Clause, rendering the rule invalid. The court concluded that

it did not need to reach the question of whether Whitaker’s service was lawful in order to

decide the case because the 2018 rule was later ratified by duly appointed Attorney

General William Barr, and the Vacancies Act did not prohibit the ratification (Kajmowicz

v. Whitaker).

*Immigration: The Eleventh Circuit held that the notice required to make an in abstentia

removal order lawful under 8 U.S.C. § 1229a(b)(5) is notice of the particular hearing

missed by the alien. The court disagreed with a Ninth Circuit decision and determined

that the statute’s requirement of “notice under paragraph (1) or (2) of section 1229(a)”

does not mean that both types of notice must be adequate, but only the type relevant to

the missed hearing. Because the petitioner relied on defects in earlier notice rather than

notice for the hearing he missed, the court denied his petition for review (DacostagomezAguilar v. U.S. Attorney General).

Securities: The Second Circuit upheld a Securities and Exchange Commission (SEC)

determination that an individual who submitted information to the agency regarding

potentially unlawful conduct by a financial institution was ineligible for a whistleblower

award where the SEC did not itself bring an enforcement action against the institution,

but where other agencies obtained financial settlements in partial reliance on the

information shared by the whistleblower. The SEC’s whistleblower award program is

authorized by 15 U.S.C. § 78u-6, which permits awards for “covered judicial or

administrative action” and “related actions” resulting in sanctions over a specified

amount. The court held that the SEC’s determination that the whistleblower was

ineligible for an award was based on a reasonable interpretation of § 78u-6 as authorizing

awards only when the covered action was brought by the SEC itself, not another agency

(Hong v. SEC).

Securities: A divided Fifth Circuit held that amendments made in 2021 to 15 U.S.C.

§ 78u ratified the disgorgement-of-profits framework used by every circuit court of

appeals prior to the Supreme Court’s 2020 decision in Liu v. SEC. In the pre-Liu burdenshifting framework, the government had to demonstrate that the amount to be disgorged

for a securities law violation reasonably approximated a defendant’s unlawful gain, but

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did not need to satisfy the more onerous requirement, adopted in Liu, of showing that a

disgorgement award would meet the elements of an equitable restitutionary remedy.

Because the Fifth Circuit interpreted the 2021 amendments as ratifying the pre-Liu

framework and the amendment applied retroactively, the court affirmed the district

court’s judgment against the defendant, including disgorgement assessed according to

that framework, without resolving how Liu might apply in other cases (SEC v. Hallam).

Trade: In a matter involving the Export Control Reform Act of 2018 (ECRA), the D.C.

Circuit affirmed a district court’s denial of a preliminary injunction to plaintiffs restricted

from receiving U.S. exports because of human-rights abuses. The Department of

Commerce placed the plaintiffs on its so-called Entity List under ECRA because of their

operations in China’s Xinjiang Uyghur Autonomous Region. The plaintiffs challenged

this action as ultra vires, arguing in part that the Secretary of Commerce lacked authority

under 50 U.S.C. § 4813 to list entities for human rights reasons, and that the amendment

of § 4813 in the proposed United States Innovation and Competition Act of 2021

supported their interpretation of the statute. The court disagreed and held that the

plaintiffs were unlikely to succeed on the merits because § 4813(a)(16) authorizes the

Secretary to rely on purposes beyond those specifically identified in § 4813(a)(2)

(Changji Esquel Textile Co. v. Raimondo).

Author Information

Michael John Garcia

Deputy Assistant Director/ALD

Alexander H. Pepper

Legislative Attorney

Congressional Research Service

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