Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (Feb. 21, 2023–Feb. 26, 2023)

Legal Sidebari

Congressional Court Watcher: Recent

Appellate Decisions of Interest to Lawmakers

(Feb. 21, 2023–Feb. 26, 2023)

February 27, 2023

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

the CRS Legal Update and receive regular notifications of new products and upcoming seminars by CRS

attorneys.

Decisions of the Supreme Court

Last week, the Supreme Court issued decisions on the merits in three cases for which it heard oral

arguments:

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Bankruptcy: The Supreme Court unanimously held that a Bankruptcy Code exception to

discharge for debts obtained by fraud applied even though the debtor’s spouse, and not

the debtor herself, committed fraud. Section 523(a)(2)(A) of the Bankruptcy Code bars

discharge of any debt obtained by “false pretenses, a false representation, or actual

fraud.” The Court reasoned that section 523(a)(2)(A), written in the passive voice,

reflected legislative intent to apply the discharge exception for fraud regardless of the

wrongdoer. The Court observed that Congress had previously deleted an express

reference to the debtor from an earlier version of the exception. Citing its 1991 decision

in Grogan v. Garner, the Court ruled that Congress placed the interests of creditors in

recovering debts obtained by fraud above the interests of debtors in declaring bankruptcy

and getting a fresh start (Bartenwerfer v. Buckley).

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Criminal Law & Procedure: The Supreme Court ruled 5-4 in favor of a petitioner

sentenced to death who wanted to raise a due process claim about jury instructions in a

successive Arizona post-conviction relief proceeding. The petitioner argued that, under

the Supreme Court’s decision in Simmons v. South Carolina, he was entitled to inform a

jury that a life sentence in Arizona would be without parole. He also invoked Lynch v.

Arizona, where the Supreme Court affirmed that Simmons applied in Arizona. The

Arizona Supreme Court had held that under Arizona Rule of Criminal Procedure 32.1(g),

Lynch did not constitute a significant change in law, a prerequisite to raising a successive

petition, because Lynch changed the law’s application but not the law itself. The Supreme

Court disagreed. It held that the Arizona Supreme Court’s decision rested on a novel and

unsupported interpretation of Rule 32.1(g), rendering the decision inadequate to preclude

review of the petitioner’s due process claim. The Court accordingly vacated the Arizona

Supreme Court’s decision (Cruz v. Arizona).

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Labor & Employment: In a 6-3 decision, the Supreme Court held that high-earning

workers paid solely on a daily rate are not compensated on a “salary basis,” and therefore

are entitled to receive overtime pay under the Fair Labor Standards Act (FLSA). A

worker on an offshore oil rig, who was paid a daily rate instead of a salary but earned

over $200,000 annually, sued his employer for overtime pay. The employer argued that

the plaintiff was exempt from FLSA overtime pay requirements because he was “a bona

fide executive” under 29 U.S.C. § 213(a)(1). The Department of Labor generally requires

three tests to be met for an employee to qualify as a bona fide executive: (1) a salary basis

test, which requires that an employee receive a predetermined and fixed salary that does

not vary with the amount of time worked; (2) a salary level test; and (3) and a job duties

test. The Court concluded that, even though the rig worker received a pay check on a

biweekly basis, he was not paid on a salary basis as defined in 29 C.F.R. § 541.602,

which applies only to employees with fixed compensation regularly paid by the week or

longer and not to workers paid according to a daily rate (Helix Energy Solutions Group,

Inc. v. Hewitt).

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.



Administrative Law: The Ninth Circuit held that, under the Administrative Procedure

Act (APA), courts may not vacate agency actions in conjunction with granting requests

for voluntary remands without first holding the agency actions unlawful. The case

involved a challenge to an Environmental Protection Agency (EPA) regulation under the

Clean Air Act (CAA). In 2020, EPA promulgated new regulations implementing Section

401, which obligates an applicant for a federal license or permit for activity that may

cause a discharge into the navigable waters of the United States to obtain certification (or

waiver of certification)—usually from the state in which the discharge originates—that

the discharge will comply with applicable provisions of certain sections of the CAA.

After a change in administration, EPA moved for voluntary remand so that it could

reconsider the rule. The district court granted EPA’s motion and granted the plaintiffs’

request to vacate the regulation. On appeal, the Ninth Circuit interpreted the APA as

foreclosing any authority of courts to vacate agency actions not first held unlawful.

Because the APA sets forth a detailed process for repealing rules, the court held that it

could not endorse a judicial practice that would help agencies circumvent that process.

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The Ninth Circuit therefore reversed the district court’s order and sent the case back for

reconsideration of EPA’s remand motion (In Re: American Rivers, et al. v. American

Petroleum Institute, et al.).

Civil Rights: The D.C. Circuit held that the District of Columbia Department of

Behavioral Health’s policy of restraining civilly committed patients during transportation

to court hearings did not violate a civilly committed plaintiff’s Fifth Amendment rights.

The court avoided taking sides in a circuit split over the proper standard for weighing

civilly committed patients’ Fifth Amendment claims of unconstitutional restraint. The

court acknowledged that some circuits disagree on whether to apply the standards

announced by the Supreme Court in Youngberg v. Romeo, which focuses on whether the

government employed professional judgment in restraining a patient, and Bell v. Wolfish,

which asks whether the restraint related to a legitimate nonpunitive purpose, or whether

courts should generate a standard using both cases. Ruling in favor of D.C. government

officials here, the court found it unnecessary to take a side in the circuit split, holding that

their decision to restrain the plaintiff satisfied both Youngberg and Bell (Harris v.

Bowser).

Criminal Law & Procedure: The Eighth Circuit upheld a criminal defendant’s

mandatory minimum sentence under a provision of the Armed Career Criminal Act

(ACCA) establishing heightened penalties for a defendant convicted of possessing a

firearm as a felon under 18 U.S.C. § 922(g)(1) who had three prior convictions “for a

violent felony or a serious drug offense.” The circuit court rejected the defendant’s

argument that his earlier conviction for unlawfully discharging a firearm from a motor

vehicle was not a “violent felony” under the ACCA (United States v. Harris).

Freedom of Information Act (FOIA): The D.C. Circuit held that certain documents that

were part of an Internal Revenue Service (IRS) investigation into alleged misconduct by

an attorney who represents clients before the IRS were protected from disclosure under

FOIA, while other documents were not. The attorney subject to the misconduct

proceedings sued the IRS under FOIA seeking disclosure of four documents pertaining to

memos written by IRS investigators. The court determined that two documents contained

predecisional and deliberative information protected from disclosure under FOIA

Exception 5. The court reasoned that some of the investigators’ recommendations in these

documents were not adopted by the IRS and their disclosure could have a chilling effect

on employees freely making recommendations in investigations and could also mislead

the public as to the government’s view of the alleged misconduct. It further determined

that one document and most of another must be disclosed under FOIA because they

simply contained descriptions of facts in the case (Waterman v. IRS).

Labor & Employment: The Ninth Circuit affirmed a district court’s dismissal, without

prejudice, of the plaintiff’s reprisal claim against her defense contractor employer under

the Defense Contractor Whistleblower Protection Act (DCWPA). The Ninth Circuit held

that to survive a motion to dismiss under the DCWPA, a plaintiff must plausibly allege

that (1) she made a disclosure that she reasonably believed was evidence of a violation

related to a Department of Defense contract; and (2) her employer discharged, demoted,

or otherwise discriminated against her because of that disclosure. The court explained

that a violation of law is related to a defense contract if it relates to its purpose or affects

the services provided by the contractor to the agency. A disclosure is protected if a

disinterested observer with knowledge of the operative facts would reasonably conclude

that the disclosure evidences a violation of law related to the contract in this manner. The

court held that the plaintiff did not plausibly allege a reasonable belief that her

disclosure—her reporting of a shove by an intoxicated co-worker at an embassy

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compound—shared a nexus with the defense contract. According to the court, the

complaint’s allegations did not encompass a disclosure sufficiently related to the contract

to give rise to DCWPA protection (Kappouta v. Valiant Integrated Services).

Author Information

Michael D. Contino

Legislative Attorney

Andreas Kuersten

Legislative Attorney

Disclaimer

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