Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(Mar. 13, 2023–Mar. 19, 2023)
March 21, 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
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Decisions of the Supreme Court
The Supreme Court did not issue any opinions or any orders granting petitions for certiorari this week.
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 nonuniform application of the law among the circuits.
Administrative Law: The First Circuit upheld a National Marine Fisheries Service
(NMFS) rule establishing industry-funded monitoring programs for New England
fisheries that place observers on private fishing vessels. The court, applying
the Chevron framework, held that NMFS possesses the authority under the Magnuson-
Stevens Fishery Conservation and Management Act (MSA) to require industry
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monitoring and rejected arguments that the legislative history and definitions in the MSA
demonstrated that the agency lacks statutory authority to promulgate the rule. The court
also rejected arguments that the rule is arbitrary and capricious in violation of the
Administrative Procedure Act, that it violates the Regulatory Flexibility Act (which
requires agencies to consider the effects of their actions on small businesses), and that it
exceeded Congress’s Commerce Clause power. Accordingly, the First Circuit joined the
D.C. Circuit in upholding the rule (Relentless, Inc. v. U.S. Dep’t. of Commerce).
Civil Service: The D.C. Circuit held that the U.S. district court below lacked jurisdiction
to hear challenges to certain Office of Personnel Management (OPM) interpretations of
the Federal Employees’ Retirement System (FERS) Act of 1986. The plaintiffs claimed
that OPM guidance documents regarding the apportionment of an annuity supplement
between federal retirees and their former spouses were arbitrary, capricious, and contrary
to the FERS Act; that OPM could not promulgate this guidance without notice-and-
comment rulemaking; and that OPM exceeded its statutory authority in applying the
guidance to certain payments. The circuit court panel held that, under the FERS Act and
the Civil Service Reform Act of 1978 , plaintiffs could pursue these claims only through
an administrative proceeding before the Merit Systems Protection Board (Fed. Law
Enforcement Officers Ass’n v. Ahuja).
Commerce: The D.C. Circuit held that the Commerce Clause of the U.S. Constitution
does not prohibit the District of Columbia from requiring contractors on certain D.C.
government-funded projects to give hiring preferences to D.C. residents. The plaintiffs
challenged the District of Columbia’s First Source Employment Act, which imposes
hiring and reporting requirements that vary based on the type of project and amount of
government assistance. The circuit court panel held that, because the D.C. government
acts as a “market participant” when it funds the relevant projects, the law fits a
recognized exception to the “dormant” Commerce Clause doctrine, which prohibits
certain kinds of regulatory discrimination against out-of-state economic interests. The
panel also ruled that the plaintiffs, as corporations, did not have standing to assert
alternative challenges to the D.C. law under the Privileges and Immunities Clause or the
Fifth Amendment Due Process Clause (Metro. Washington Chapter, Associated Builders
& Contractors, Inc. v. District of Columbia).
First Amendment (Speech): The Ninth Circuit held that the First Amendment does not
provide a public right of access to certain court orders issued under the All Writs Act
(AWA), 28 U.S.C. § 1651. As relevant to this case, the AWA allows federal courts to
order private parties to assist law enforcement in the execution of arrest warrants. Two
U.S. district courts had denied a journalist’s petitions to unseal such orders that the courts
had issued to a travel-booking company. The circuit court panel affirmed, reasoning that
although the First Amendment protects public scrutiny of government proceedings, it “is
not an all-access pass to any court proceeding or court record.” Applying the Supreme
Court’s “experience and logic” test for right-of-access cases, the panel found that AWA
proceedings—like those involving grand juries and search warrants—are traditionally
conducted outside of public view and that public disclosure could compromise criminal
investigations. The court held that, so long as the investigation is ongoing and law
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enforcement has not yet executed the arrest warrants that precipitated the orders, there is
no public right of access to sealed AWA records (Forbes Media LLC v. United States).
*Health: The Fifth Circuit held that a federal employee failed to state a claim against
OPM for denying health insurance benefits for a treatment that she was no longer
seeking. Under the Federal Employees Health Benefits Act (FEHBA), OPM is
responsible for regulating health insurance plans for federal employees. In this case, an
insurance company, on behalf of OPM, made an “advance benefit determination”
denying coverage for a certain cancer treatment; the employee therefore chose a different,
covered treatment that eliminated her cancer but allegedly caused severe side effects.
Breaking with the Tenth Circuit, the court held that the employee’s claim against OPM
was not barred by sovereign immunity, reasoning that OPM regulations could not narrow
5 U.S.C. § 8912, which waives federal sovereign immunity for “a civil action or claim . .
. founded on [FEHBA].” The court nevertheless found that the employee could not state a
valid claim for benefits under OPM’s regulations, which it held allow relief only to the
extent an employee seeks coverage for medical bills that she actually did or could yet
incur (Gonzales v. Blue Cross Blue Shield Ass’n).
Immigration: The Ninth Circuit held that an Order to Show Cause that initiated
deportation proceedings prior to the passage of Illegal Immigration Reform and
Immigrant Responsibility Act of 1996 (IIRIRA) but failed to disclose the time and place
of the deportation proceedings was sufficient to trigger IIRIRA’s “stop-time rule,”
preventing an alien from counting time toward the requisite seven years of continuous
presence in the United States to apply for a suspension of deportation. The stop-time rule
imposed by IIRIRA, 8 U.S.C. § 1229b(d)(1), provides that an alien ceases to accrue
physical presence in the United States upon service of a charging document in an
immigration case. Joining every other circuit to consider the issue, the Ninth Circuit
declined to extend the Supreme Court’s decision in Pereira v. Sessions, which held that a
Notice to Appear that fails to designate the time or place of removal proceedings does not
trigger the stop-time rule. The court recognized that the transitional rules that
accompanied IIRIRA requires the court to give the stop-time rule retroactive effect over
immigration proceedings that were pending at the time IIRIRA was adopted. As a result,
the alien in the present case did not accrue the requisite physical presence and was
ineligible for suspension of deportation (Gutierrez-Alm v. Garland).
Intellectual Property: The Federal Circuit held that an Administrative Procedure Act
lawsuit against the U.S. Patent and Trademark Office (PTO) may proceed insofar as it
claims PTO was required to use notice-and-comment rulemaking to promulgate guidance
on whether to institute inter partes reviews (IPRs) challenging the validity of U.S.
patents. The Leahy–Smith America Invents Act (AIA) gives the PTO director “final and
nonappealable” discretion—which the director has delegated to the Patent Trial and
Appeal Board (PTAB)—on whether to institute an IPR. In 2020, the director issued
guidance known as the “Fintiv factors” that PTAB must consider in deciding whether to
institute an IPR when there is pending litigation involving overlapping issues. The
Federal Circuit held that, by giving the PTO director unreviewable discretion, the AIA
precluded plaintiffs’ claims that the Fintiv factors were arbitrary and capricious or
contrary to law. Nonetheless, the panel remanded for the district court to hear plaintiffs’
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claim that PTO was required to use notice-and-comment rulemaking to issue this
guidance, holding that the AIA did not preclude this claim (Apple Inc. v. Vidal).
Labor & Employment: The Third Circuit held that paid time off is not part of an
employee’s salary for the purposes of deductions prohibited by the Fair Labor Standards
Act (FLSA) and its regulations. 29 C.F.R. § 541.602(a)(1) requires that a salaried
employee “receive the full salary for any week in which the employee performs any work
without regard to the number of days or hours worked,” subject to exceptions provided in
the regulation. Plaintiffs challenged an employer’s use of a productivity points system by
which the employer deducted accrued paid time off if employees failed to meet weekly
productivity minimums. The court held that, while neither the FLSA nor its regulations
defined “salary,” the regulatory language suggested that salary is a fixed amount of
compensation that an employee regularly receives, while paid time off is closer to a
“fringe benefit” that may be deducted (Higgins v. Bayada Home Health Care Inc.).
Labor & Employment: The Ninth Circuit reversed the dismissal of an equal protection
challenge to a California law codifying the “ABC” test for determining if workers are
classified as employees or independent contractors for the purposes of California wage
laws. In an earlier case, Dynamex Operations West, Inc. v. Superior Court of Los Angeles
County, the Supreme Court of California adopted a test whereby workers are presumed to
be employees, and may only be classified as independent contractors if the hiring entity
demonstrates: (A) the worker is free from the control and direction of the hiring entity;
(B) the worker performs work outside the usual course of the hiring entity’s business; and
(C) the worker is customarily engaged in an independently established occupation of the
same nature. California later codified the ABC test outlined in Dynamex with exemptions
for numerous industries, and plaintiffs challenged the law in part by claiming it
unlawfully targeted gig economy companies in violation of the Equal Protection Clause.
The Ninth Circuit reversed the district court’s dismissal of the equal protection claim,
holding that the plaintiffs plausibly alleged that the law unlawfully targeted companies
engaged in app-based ride-hailing and delivery services and was motivated by animus.
The Ninth Circuit also found that the district court correctly dismissed the plaintiffs’ due
process claims, Contract Clause claims, and Bill of Attainder claims (Olson v.
California).
Separation of Powers: The Eleventh Circuit held that a district court properly denied a
motion filed by appointees of Nicolás Maduro to reopen a civil lawsuit on behalf of the
Venezuelan national oil company, because the State Department has concluded that
Maduro is not Venezuela’s legitimate head of state. The district court had initially
dismissed the lawsuit—which alleged that the defendants committed fraud, antitrust
violations, and other misconduct—because it found that the plaintiff litigation trust
lacked standing. In response, a board that Maduro appointed to control the oil company
unsuccessfully moved to reopen the case and substitute itself as the plaintiff. Explaining
that identification of the legitimate leadership of a foreign country is a nonjusticiable
political question, the circuit court panel held that it was bound by the State Department’s
determination that the Maduro government is illegitimate and therefore affirmed the
district court’s decision (PDVSA US Litigation Trust v. Lukoil Pan Americas LLC).
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Torts: The First Circuit held the government was not shielded from judicial review in the
case of an individual seeking damages under the Federal Tort Claims Act for false arrest
and false imprisonment by federal immigration authorities. An individual alleged that the
government unlawfully arrested and detained him by relying on a decades-old
deportation warrant and by failing to adhere to regulatory procedures during its attempt to
repatriate him. A district court granted the government’s motion to dismiss for lack of
subject-matter jurisdiction, holding that 8 U.S.C. § 1252(g) deprived the court of
jurisdiction over claims “arising from” decisions or actions to execute removal orders,
including, in the present case, the government’s decision to arrest and return an
individual to detention as part of a repatriation effort. The First Circuit reversed and
remanded, holding that Section 1252(g)’s bar on judicial review did not preclude
jurisdiction over allegations of illegal activity, such as relying on a decades-old
deportation warrant and disregarding regulatory procedures, which are collateral to the
government’s prosecutorial discretion to execute a removal (Kong v. United States).
Trade: The Federal Circuit held that the Department of Commerce (Commerce) and
Court of International Trade (CIT) correctly determined that a duty that the President
imposed on imported steel articles was a “United States import duty” under 19 U.S.C. §
1677a(c)(2)(A) when calculating the dumping margin for antidumping duties on carbon
steel pipes. The plaintiff company imported steel pipes that were subject to decades-old
antidumping duties, which provide relief to U.S. industries and workers that are
materially injured or threatened with injury due to imports of like products sold in the
U.S. market at less than fair value. In 2018, Presidential Proclamation 9705 imposed an
additional duty on imported steel articles pursuant to the President’s authority in 19
U.S.C. § 1862. In an administrative review, Commerce treated this new duty as a “United
States import duty” under § 1677a(c)(2)(A), thus requiring plaintiffs to pay higher
antidumping duties, which they challenged in the CIT. The Federal Circuit affirmed the
decision of the CIT, holding that the context and plain meaning of Proclamation 9705
confirmed that, when applied to an article covered by current antidumping duties, the
proclamation was meant to add to, rather than offset, the existing duties (Borusan
Mannesmann Boru Sanayi ve Ticaret A.S. v. United States).
Author Information
Christopher T. Zirpoli
Jimmy Balser
Legislative Attorney
Legislative Attorney
Disclaimer
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