Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (August 22–August 28, 2022)

Legal Sidebari

Congressional Court Watcher: Recent

Appellate Decisions of Interest to Lawmakers

(August 22–August 28, 2022)

August 29, 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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Decisions of the Supreme Court

The Supreme Court did not issue any opinions or grants of certiorari this week. The Supreme Court’s next

term begins October 3, 2022.

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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Civil Rights: The Eighth Circuit upheld a district court’s preliminary injunction blocking

Arkansas from enforcing a statute banning gender transition procedures, and medical

referrals for those procedures, for minors. Reviewing the injunction under an “abuse of

discretion” standard, the circuit court ruled that the district court did not clearly err when

it held that plaintiffs would likely prevail in their claims that the law violates the Equal

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Protection Clause by discriminating based on sex and gender identity, and that plaintiffs

would suffer irreparable harm if the statute were enforced pending the outcome of the

litigation. The circuit court declined to reach plaintiffs’ Fourteenth Amendment due

process and First Amendment claims the lower court considered for the injunction

(Brandt by and through Brandt v. Rutledge).

Communications: The Ninth Circuit held that Federal Communications Commission

regulations setting radio frequency radiation standards for cell phones, which were issued

pursuant to the agency’s authority under the Communications Act of 1936 and the

Telecommunications Act of 1996, preempted plaintiffs’ state law tort claims alleging that

Apple misrepresented and failed to disclose the amount of radiation emitted by iPhones.

(Cohen v. Apple Inc.).

Consumer Protection: The Third Circuit held that a provision of the Fair Credit

Reporting Act (FCRA), 15 U.S.C. § 1681g(a), which requires that covered entities

disclose specified categories of information to consumers upon request, is triggered only

by a direct request from a consumer, and not by third parties who make requests on the

consumer’s behalf. The court also held that consumers need not specify whether they are

seeking access to their “file” or “consumer report”—separately defined terms under the

FCRA— for the covered entity’s § 1681g(a) disclosure requirements to be triggered; a

generalized request for information about her will suffice (Kelly v. RealPage, Inc.).

*Consumer Protection: Adding to a circuit split, the Third Circuit held that the United

States may be held liable for civil damages under the FCRA if it violates the act’s

requirements. The court joined two other circuits in holding that the plain text of the

FCRA, which defines a “person” subject to the act’s substantive requirements as

including a “government or governmental subdivision or agency,” constituted a waiver of

the federal government’s sovereign immunity from suit under FCRA. The court disagreed

with two other circuits which held that the foregoing definition of “person” applicable to

FCRA’s substantive requirements did not apply the act’s enforcement provisions. Those

circuits believed such a reading would lead to absurd and unintended results, including

possible criminal sanctions such as imprisonment against government entities if they

failed to comply with FCRA’s requirements. The Third Circuit disagreed with the

reasoning of these cases and, in any event, found that they did not preclude application of

the civil liability provisions at issue (Kirtz v. Trans Union, LLC).

*Consumer Protection: A divided Eleventh Circuit held that the Food and Drug

Administration’s (FDA’s) marketing denial orders to six tobacco companies were

arbitrary and capricious because FDA did not consider relevant factors. Manufacturers

may be required by the Tobacco Control Act, 21 U.S.C. § 387j, to receive approval from

FDA before marketing new tobacco products by showing, among other things, that the

product would be appropriate for protecting the public health. FDA determines whether a

new product is appropriate for protecting the public health by evaluating the risks and

benefits to the population, including the likelihood that existing tobacco users will quit

and the likelihood that those who do not currently use tobacco products will start.

Splitting with other circuits, the Eleventh Circuit held that FDA’s decision to deny

marketing approval to various manufacturers of electronic tobacco products was arbitrary

and capricious because it did not consider the companies’ plans restricting marketing and

sales-access from youth (Bidi Vapor LLC v. FDA).

*Criminal Law & Procedure: The Fifth Circuit added to a circuit split in holding that

the crime of federal-programs bribery under 18 U.S.C. § 666 requires evidence of a quid

pro quo. Section 666 criminalizes bribery for programs receiving federal funds, including

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bribes offered to state and local officials. Joining the First Circuit, the Fifth Circuit

rejected an interpretation that § 666 criminalizes both bribery and illegal gratuities. The

court therefore vacated convictions in a bribery case of city officials because the trial

court had instructed the jury that neither a quid-pro-quo exchange nor any official act was

needed to convict (United States v. Hamilton).

Criminal Law & Procedure: The Seventh Circuit joined several other circuits in holding

that the Racketeer Influenced and Corrupt Organizations (RICO) Act did not authorize

federal courts to award damages in contravention of exclusive state regulation of retail

electricity rates. The plaintiffs sought civil monetary damages for alleged overpayment of

electricity bills due to a corrupt “pay-to-play” scheme. Under the “filed rate doctrine,”

courts cannot adjust rates that have been filed with the appropriate regulator for any

reason. The court found that the plaintiffs sought damages that would, in effect,

retroactively adjust the legal electricity rates they paid, and since a filed rate cannot be

changed, the court affirmed the dismissal of the RICO claim for damages (S. Branch LLC

v. Commonwealth Edison Co.).

Criminal Law & Procedure: The Seventh Circuit affirmed a criminal defendant’s

conviction and mandatory-minimum sentence under 21 U.S.C. § 841(b)(1)(A)(vi) for

possession with intent to distribute an “analogue to [fentanyl].” Although the defendant’s

possession of a Schedule I controlled substance, furanylfentanyl, did not constitute a

“controlled substance analogue” defined elsewhere in statute, the court held that this did

not preclude him from being charged with possessing an “analogue of [fentanyl]” (United

States v. Johnson).

Criminal Law & Procedure: A divided Ninth Circuit affirmed a criminal defendant’s

conviction under 18 U.S.C. § 115(a)(1)(B), when the defendant had threatened to kill a

private security officer who was contracted to provide security services at a federal

location. While acknowledging that § 115(a)(1)(B), which proscribes violent threats

against certain persons, including a United States “official,” was not a model of clarity,

the majority agreed with the Third and Eighth Circuits that § 115(a)(1)(B)’s reference to

“official” was intended to cover persons protected under 18 U.S.C. § 1114, which

sanctions the actual or attempted killing of an “officer or employee” of the United States,

as well as “any person assisting” such persons in the performance of their duties (United

States v. Anderson).

Election Law: Sitting en banc, a divided Fifth Circuit rejected an Equal Protection

Clause challenge to a provision in the Mississippi state constitution denying the right to

vote to any person “convicted of murder, rape, bribery, theft, arson, obtaining money or

goods under false pretense, perjury, forgery, embezzlement or bigamy.” In a per curiam

opinion, the en banc majority observed that the initial version of the state provision had

been adopted in 1890 with the intent of disenfranchising black voters by specifying

disqualifying offenses that proponents perceived to be “black crimes” and omitting

disqualifying offenses perceived to be “white crimes.” While the majority declared that

the 1890 provision would have been constitutionally invalid if it remained in effect given

its discriminatory intent, the state’s later reenactment of the provision in 1950 and 1968,

which involved amending the enumerated offenses resulting in disenfranchisement, cured

this constitutional defect (Harness v. Watson).

Housing: The Fifth Circuit held that a New Orleans residency requirement to rent out

properties violates the dormant Commerce Clause because it discriminates against

interstate commerce. The plaintiffs brought several constitutional challenges to a

municipal regulation that, among other things, prohibited any person from obtaining a

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license to own a short-term rental in a residential neighborhood unless the property was

also the owner’s primary residence. While the court found that the city’s policy sought to

advance the legitimate purposes of preventing nuisances, promoting affordable housing,

and protecting neighborhoods’ residential character, it held that those objectives could be

served by reasonable nondiscriminatory alternatives and vacated the district court’s

summary judgment for the city (Hignell-Stark v. City of New Orleans).

Housing: The D.C. Circuit affirmed a district court’s ruling for the Department of

Housing and Urban Development (HUD) in a suit challenging the agency’s 2016 final

rule barring lit tobacco products in HUD-subsidized public housing units and their

immediate surroundings. The circuit court held that the rule was a valid exercise of

HUD’s power under the Housing Act of 1937; the agency did not act arbitrarily and

capriciously in promulgating the rule; and the conditions the rule placed on federally

subsidized public housing agencies were a valid exercise of the federal government’s

spending power (NYC C.L.A.S.H., Inc. v. Fudge).

Labor & Employment: The Second Circuit held that the Mandatory Victims Restitution

Act (MVRA), which requires defendants convicted of certain offenses to reimburse

victims for specified expenses, enables the garnishment of a defendant’s retirement

funds. The court held that garnishment was not barred by an Employee Retirement

Income Security Act provision, 29 U.S.C. § 1056(d)(1), which requires pension plans to

provide that their benefits “may not be assigned or alienated.” Though agreeing with the

lower court on MVRA’s application, the circuit court remanded the case for the lower

court to determine whether and how the federal tax on early withdrawal would apply to

the garnishment of the defendant’s retirement funds (United States v. Greebel).

Labor & Employment: The Eighth Circuit reinstated the Department of Labor’s flagrant

designation and individual liability for violations under the Federal Mine Safety and

Health Act, 30 U.S.C. § 820. A violation of the Act is flagrant when it is “a reckless or

repeated failure to make reasonable efforts to eliminate a known violation of a mandatory

health or safety standard that substantially and proximately caused, or reasonably could

have been expected to cause, death or serious bodily injury.” The court decided that the

Department of Labor’s interpretation of recklessness as applied to the mine operator’s

conduct was reasonable and entitled to deference (Northshore Mining Co. v. Sec’y of

Lab).

Environment: The Sixth Circuit reinstated an injunction blocking the Tennessee Valley

Authority (TVA) from implementing a tree-clearance practice to remove trees from areas

surrounding power lines, previously known as the 15-foot rule. A district court had

removed the injunction, holding that TVA had prepared an Environmental Impact

Statement (EIS) as required by the National Environmental Policy Act and had also

developed a new, alternate plan. The Sixth Circuit reversed, holding that the district court

did not properly determine whether TVA had considered the environmental consequences

as part of its EIS and that its alternate plan was arguably indistinguishable from the

original 15-foot rule with respect to the impact on the trees (Sherwood v. TVA).

Environmental Law: The D.C. Circuit agreed to transfer a petition challenging two

Environmental Protection Agency (EPA) rules for air quality standards to the Fifth

Circuit, after concluding that the D.C. Circuit was the improper venue for the challenge.

A Clean Air Act provision, 42 U.S.C. § 7607(b)(1) provides that the D.C. Circuit is the

appropriate venue for challenges brought under the statute only if the rules are nationally

applicable or the EPA makes and publishes a finding that an otherwise locally or

regionally applicable action is based on a determination of nationwide scope and effect.

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Here, the challenged rules facially applied only to the Dallas and Houston areas.

Agreeing with the Fifth Circuit, the D.C. Circuit held that EPA’s decision of whether to

make and publish a finding of nationwide scope is committed to agency discretion, and

that the agency’s failure to publish a finding of nationwide scope meant that the D.C.

Circuit was not the appropriate venue for the plaintiffs’ case (Sierra Club v. EPA).

National Security: In consolidated appeals, the Eleventh Circuit considered attempts to

satisfy a civil monetary judgment award against a foreign terrorist organization. Section

201(a) of the Terrorism Risk Insurance Act (TRIA), codified as a note to 28 U.S.C.

§ 1610, provides that the blocked assets of an agency or instrumentality to a terrorist

party shall be subject to execution or attachment to satisfy a judgment for compensatory

damages that the terrorist party has been adjudged liable. Among several holdings in a

decision returning the case to the trial court, the Eleventh Circuit held that to be an agent

of a terrorist party under § 201(a) of the TRIA, the agent must know the identity of the

terrorist party; but such knowledge is not necessary to be an instrumentality of the party

(Stansell, et al. v. Revolutionary Armed Forces of Colombia).

Public Health: The D.C. Circuit rejected a request to compel the Occupational Safety

and Health Administration (OSHA) to issue a permanent standard for mitigating risks of

COVID-19 transmission in health care settings, and a request that, until the issuance of a

standard, the court compel OSHA to retain and enforce the 2021 emergency temporary

standard (ETS) that the agency largely intended to withdraw. The circuit court held that

(1) it lacked power under the All Writs Act to compel OSHA to promulgate a permanent

standard because OSHA did not have a clear duty to promulgate a standard at the end of

ongoing rulemaking proceedings; (2) compelling OSHA to retain the ETS until a

permanent standard would not preserve or retain the court’s jurisdiction to consider the

validity of the ETS, as federal statute provided for jurisdiction over such challenges

during a 60-day window that had passed; and (3) OSHA’s decision on how vigorously to

enforce the 2021 ETS was committed to agency discretion (In re National Nurses

United).

Speech: A divided D.C. Circuit upheld regulations governing filmmaking on

government-controlled property after ruling that the filming of a movie is “a

noncommunicative step in the production of speech.” A filmmaker challenged 54 U.S.C.

§ 100905(a)(1), a provision requiring a permit and fee for commercial filming activities

on land administered by the National Park Service. While acknowledging that other

courts have found certain video recording activities to be protected, the court

distinguished filmmaking from communicative activities. Although the park qualified as

a limited public forum where speech restrictions would ordinarily trigger heightened

scrutiny, the court said this regulation of noncommunicative activity only triggered a

deferential reasonableness review (Price v. Garland).

Tax: The Second Circuit affirmed a Tax Court opinion that held that an Internal Revenue

Code provision, 26 U.S.C. § 72(t), which establishes a 10% exaction to discourage early

withdrawal from a qualified pension plan, is a tax rather than a penalty, the latter of

which requires written supervisory approval. The court based this decision on the

unambiguous text of § 72(t) and other provisions of the Code labeling the exaction as a

“tax.” The court was unpersuaded by petitioner’s arguments that the exaction should be

deemed a penalty because it is calculated differently than regular income tax, or that the

court should look beyond the statute’s plain language and consider the punitive function

that the exaction provision was alleged to serve (Grajales v. Commissioner of Internal

Revenue).

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Tax: In reviewing a dispute involving the Internal Revenue Service’s (IRS’s) cancellation

of advance pricing agreements meant to govern a private corporation’s tax calculations

for a period of years, the Sixth Circuit considered several issues, including which party

bore the burden of proof in the breach of contract dispute. The circuit court held that

standard contract-law principles applied, meaning that the IRS bore the burden of

showing that a breach justifying cancellation had occurred. The panel decided that neither

caselaw nor the IRS’s internal procedures supported the agency’s claim that

administrative deference shifted the burden to the other party to show that cancellation

was plainly arbitrary. The panel also held for the corporation in all other issues in dispute

(Eaton Corp. & Subsidiaries v. Commissioner of Internal Revenue).

Transportation: Joining other circuits, the Tenth Circuit held that personal-injury claims

arising out of an airline employee’s failure to exercise due care are not “related to” a

deregulated price, route, or service preempted under the Airline Deregulation Act (ADA),

49 U.S.C. § 41713(b)(1). In interpreting the phrase “related to,” the court reasoned that

the preemption provision can only apply to state laws that refer to or are impermissibly

connected with airline prices, routes, and services. The Tenth Circuit ruled that the district

court erred in dismissing the plaintiff’s claims that were premised on Utah’s negligence

and breach of contract causes of action, which are laws of general applicability that are

not connected with airline prices, routes, or services (Day v. SkyWest Airlines).

Author Information

Michael John Garcia

Deputy Assistant Director/ALD

Jimmy Balser

Legislative Attorney

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