Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(August 1–August 7, 2022)
August 8, 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
No Supreme Court opinions or grants of certiorari were issued 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.
Arbitration: The Ninth Circuit became the latest circuit court to interpret broadly the
jurisdictional provision of Section 203 of the Federal Arbitration Act (FAA). The court
ruled that petitions to enforce arbitral summonses are proceedings “falling under” the
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
even if such proceedings are not explicitly listed in the Convention. The court found
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support for its decision in dictionary definitions of “falling under” at the time Congress
enacted Section 203, as well as the structure and purpose of both the Convention and the
FAA (Jones Day v. Orrick, Herrington & Sutcliffe, LLP).
Bankruptcy: The Ninth Circuit held that a disbarred attorney-debtor’s obligation to
reimburse the California State Bar for payments made by the Client Security Fund to his
wronged clients was not dischargeable under 11 U.S.C. § 523(a)(7). The court reasoned
that § 523(a)(7) provides for the discharge of fines, penalties, or forfeitures payable to
and for the benefit of a governmental unit; the section does not permit discharge where a
debt constitutes compensation for actual pecuniary costs. Under California law, the court
further reasoned, the purpose of the Client Security Fund is to relieve or mitigate
pecuniary losses caused by attorneys; an attorney must reimburse the fund for moneys
paid out; and the state bar has a right of subrogation, meaning that it steps into the shoes
of the aggrieved party (Kassas v. State Bar of California).
Civil Procedure: In a “mass action” case brought by more than 400 pharmacies against a
pharmaceutical benefits company under state law, the Third Circuit found the federal
district court had jurisdiction and remanded the case for further proceedings. Class action
lawsuits alleging violations of state law generally must be brought first in state court,
though such suits may be removable to federal district court if certain criteria are met.
The Third Circuit considered whether the Class Action Fairness Act of 2005 (CAFA) has
an exception for mass actions, allowing them to be initially filed in federal district court.
The Third Circuit agreed with other circuit courts that criticized CAFA as opaquely
drafted, particularly in the statute’s use of internal cross-references. Still, it held that the
best reading of CAFA gave federal district courts original jurisdiction over mass actions
that have characteristics set forth in 28 U.S.C. § 1332(d)(2)–(10), which describe class
actions removable to federal court. In the present case, the circuit court ruled that the
factors set forth in § 1332(d)(2)–(10) had been satisfied and that the federal district court
could permit discovery regarding an issue in dispute (Robert D. Mabe, Inc. v. OptumRx).
*Civil Rights: A Fifth Circuit panel affirmed a district court’s dismissal of employees’
challenge to a gender-based scheduling policy, reluctantly concluding the employees
failed to state a viable claim under Title VII of the Civil Rights Act. The panel said it was
bound by circuit precedent requiring that employees allege an adverse employment
action, which had not happened here. The panel suggested that this precedent was not the
best reading of Title VII, and noted that it conflicted with other circuits that recognized
Title VII claims challenging discrimination in the terms and conditions of employment,
including shift assignments. Still, the panel ruled it was bound by circuit precedent until it
is superseded by statute or overruled by either the en banc Fifth Circuit or the Supreme
Court (Hamilton v. Dallas Cnty.).
Consumer Protection: The D.C. Circuit ruled that the Consumer Product Safety
Commission (CPSC) had statutory authority to issue a final rule setting mandatory safety
standards for all infant sleep products, including those that had been unregulated under
Section 104(b) of the Consumer Product Safety Improvement Act. The court held the Act
authorized the CPSC to extend a safety standard to previously unregulated products
(Finbinn, LLC v. Consumer Product Safety Comm’n).
Criminal Law & Procedure: The Second Circuit allowed a petitioner’s extradition to
South Korea to proceed after he invoked the extradition treaty’s “lapse of time”
provision, which permits extradition to be denied where the statute of limitations in the
requested state had run. The court joined other circuits in ruling that lapse of time
provisions in extradition treaties set forth a discretionary factor for the Secretary of State
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to consider in deciding whether to extradite, not a mandatory determination for a court to
make before certifying extradition (Yoo v. United States).
Criminal Law & Procedure: Joining other circuits, the Seventh Circuit rejected a
Commerce Clause challenge to a criminal conviction under the federal arson statute, 18
U.S.C. § 844(i). Applying the Supreme Court’s four-factor framework from United States
v. Morrison, the court ruled that the arson statute falls within Congress’s authority to
regulate interstate commerce (United States v. Johnson).
Criminal Law & Procedure: In a divided opinion, the D.C. Circuit reversed a district
court holding that a member of the Fleet Marine Corps Reserve was not subject to court-
martial jurisdiction. The court held that Congress’s statutory grant of military jurisdiction
over Fleet Marine Reservists comports with the Constitution’s Make Rules Clause
because those reservists have a formal relationship with the armed forces that includes a
duty to obey military orders. The court further ruled that the Fifth Amendment’s Grand
Jury Clause did not separately bar the court-martial because that Clause contains an
exception for cases arising in the land or naval forces, which is coextensive with the
Make Rules Clause (Larrabee v. Del Toro).
Education: The Eleventh Circuit held that it lacked appellate jurisdiction over a federal
district court’s remand of an Individuals with Disabilities Education Act claim to a state
administrative agency because the remand order was not a “final” decision appealable
under 28 U.S.C. § 1291 (S.S. v. Cobb Cnty. Sch. Dist.).
Election Law: The Seventh Circuit ruled that a county election board did not violate a
political candidate’s First or Fourteenth Amendment rights when it struck his name from
a Republican primary ballot following a county Republican Party’s challenge to his
candidacy. The court reasoned that political parties have First Amendment interests of
association that would be infringed upon by including an unwanted person in the group
(Hero v. Lake Cnty. Election Bd.).
*Environmental Law: A divided Seventh Circuit reversed a district court’s decision to
deny attorney’s fees and costs under the Endangered Species Act’s citizen suit provision,
16 U.S.C. § 1540(g). The provision allows a court to award fees and costs when
“appropriate.” The Seventh Circuit ruled that reasonable fees are presumptively
appropriate when a citizen-litigant has some success under the Act, unless special
circumstances make the award unjust. In doing so, the court disagreed with the Eighth
Circuit in ruling that a losing party’s lack of resources is not a special circumstance
(Animal Legal Defense Fund v. Special Memories Zoo).
Freedom of Information Act (FOIA): The Second Circuit upheld a district court’s
ruling that the Food & Drug Administration properly withheld certain information from a
FOIA requestor regarding its approval of a pharmaceutical corporation’s application for
accelerated drug approval. The court concluded that the information was lawfully
withheld under FOIA Exemption 4 and the FOIA Improvement Act of 2016, which
requires an agency to withhold records if it “reasonably foresees that disclosure would
harm an interest protected by” a FOIA Exemption. The court held that FOIA Exemption
4, which generally covers “trade secrets and commercial or financial information
obtained from a person and privileged or confidential,” protects the submitter’s
commercial or financial interests in information of a type held in confidence and not
disclosed to any member of the public by the person to whom it belongs. The panel held
that the denial of plaintiff’s FOIA request was warranted because the information fell
under FOIA Exemption 4 and its release would foreseeably harm the pharmaceutical
corporation’s commercial interests (Seife v. Food & Drug Admin.).
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Health: The Ninth Circuit upheld sequestration as an appropriate method to determine
limits on Medicare spending for hospice care. The court addressed intertwining statutory
limits on Medicare spending for hospice care: (1) Medicare’s annual limit on the total
amount the Centers for Medicare and Medicaid Services (CMS) may reimburse hospices;
and (2) the Budget Control Act (BCA), which separately requires the government to
make comprehensive cuts, also known as sequestration, to direct spending programs
when certain statutory conditions are met. Multiple hospices challenged CMS’s
sequestration method under the statutes. The Ninth Circuit decision ruling that CMS
acted in accordance with the text of the Medicare statute and the BCA aligns with a ruling
by the D.C. Circuit earlier this year (Silverado Hospice, Inc. v. Becerra).
*Immigration: The Eleventh Circuit affirmed a Board of Immigration Appeals (BIA)
decision holding that the petitioner was removable because he was convicted of a “crime
of child abuse, child neglect, or child abandonment” under 8 U.S.C. § 1227(a)(2)(E)(i).
The court added to a circuit split over the BIA’s interpretation of that statute, deeming the
interpretation reasonable and entitled to deference. The BIA interpreted the statute to
cover criminally negligent conduct with no resulting physical injury, so long as there was
a reasonable probability of harm (Bastias v. Attorney Gen.).
Intellectual Property: The Federal Circuit held, after concluding that the definition of
“inventor” in the Patent Act unambiguously refers to natural persons, that an artificial
intelligence software system cannot be listed as the inventor on a patent application
(Thaler v. Vidal).
Labor & Employment: The D.C. Circuit set aside guidance from the Federal Labor
Relations Authority (FLRA) interpreting two provisions of the Federal Service Labor-
Management Relations Statute. The guidance provided that agency heads could review a
collective bargaining agreement (CBA) extended under a continuance clause and enforce
regulations that conflicted with the CBA and became effective after the agreement’s
original effective date. Applying the Chevron U.S.A. Inc. v. Natural Resources Defense
Council framework, the court found no statutory basis for either part of the FLRA
guidance. The court reasoned that invoking a continuance clause does not execute a new
agreement, so there is no basis for a second round of agency-head review, and agencies
may not enforce subsequently enacted regulations that conflict with an agreement that
remains in effect (Nat’l Treasury Employees Union v. FLRA).
*Securities: The Second Circuit added to a circuit split over the elements of 18 U.S.C.
§ 1514A, which bars publicly traded companies from taking adverse employment actions
against workers “because of” lawful whistleblowing acts. Courts have disagreed on
whether § 1514A requires plaintiffs to show that the adverse employment action was
motivated by the whistleblowing. The Second Circuit agreed with courts that have held
that a plaintiff must show a retaliatory intent for the adverse employment action, and not
merely that the whistleblowing was a contributing factor to the employer’s decision
(Murray v. UBS Securities).
Tax: The Fifth Circuit upheld a district court’s decision that rejected Exxon’s efforts to
obtain more than $1 billion in tax refunds from the Internal Revenue Service. While the
court considered several issues, a key consideration concerned the meaning of 26 U.S.C.
§ 6426(a), which allows taxpayers that produce renewable fuel to claim a “credit against”
any excise tax they pay for nonrenewable fuels. The court held that Exxon could not
deduct the full amount of excise taxes imposed on nonrenewable fuel without taking into
account offsetting credits received for the production of renewable fuels. Joining two
other circuits, the panel held that the renewable fuel tax credit reduces the recipient’s
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excise tax burden, and also reduces the amount of the excise tax that the taxpayer may
deduct from its gross income (Exxon Mobil Corp. v. United States).
Author Information
Michael John Garcia
Michael D. Contino
Deputy Assistant Director/ALD
Legislative Attorney
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