Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (Mar. 14–Mar. 20, 2022)

Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (Mar. 14–Mar. 20, 2022)

Legal Sidebari

Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(Mar. 14–Mar. 20, 2022)
March 21, 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 of the cases identified in this Sidebar, or the legal questions they address, are examined in other
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Decisions of the Supreme Court
No Supreme Court opinions were issued this past week, and no cases were added to the Court’s docket.
Decisions of the U.S. Courts of Appeals
Topic headings marked with an asterisk (*) indicate cases where 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.
 Bankruptcy: The Second Circuit held that the Small Business Administration’s decision
to exclude bankrupt debtors from receiving Paycheck Protection Program loans did not
violate a Bankruptcy Code provision stating that the government “may not deny . . . a
license, permit, charter, franchise, or other similar grant” to a debtor based solely on
bankruptcy status. The Second Circuit is the first appellate court to consider this issue,
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though several district courts have reached the same result (Springfield Hospital, Inc. v.
Guzman).
 Civil Rights: The Second Circuit decided that an Americans with Disabilities Act (ADA)
“tester,” who visited a hotel website to determine whether it was ADA-compliant but did
not indicate an intent to stay at the lodging, failed to allege a concrete and particularized
injury flowing from the alleged ADA violation, and therefore failed to satisfy
constitutional standing requirements. The decision is consistent with recent rulings by the
Fifth and Tenth Circuits (Harty v. West Point Realty, Inc.).
 Civil Procedure: The Ninth Circuit held that 28 U.S.C. § 1404(a), which allows a district
court to transfer a civil action to another district where that suit may have been brought,
or to any other district where all the parties consent to the transfer, does not broadly
preempt state laws governing the use of contractual forum-selection clauses (Depuy
Synthes Sales, Inc. v. Howmedica Osteonics Corp.).
 Class Actions: The Second Circuit considered an appeal by Freddie Mac and its
conservator, the Federal Housing Finance Agency (FHFA), where the entities challenged
their inclusion as members of a settlement class, and the district court held that the
entities had not opted out of the class in a timely manner. The circuit court disagreed with
the appellants that a provision of the Housing and Economic Recovery Act of 2008
(HERA) barred the district court from including Freddie Mac and the FHFA in the
settlement class. However, the circuit court concluded that, for reasons related to the
case’s factual underpinnings, the FHFA should not have been treated as a class member
(N.J. Carpenters Health Fund v. NovaStar Mortgage, Inc.).
 Election Law: A divided Fifth Circuit panel reversed district court rulings in a trio of
challenges to Texas voting laws, holding that the suits improperly named the Texas
Secretary of State as the defendant. Two of the cases were appeals from district court
orders enjoining voting regulations—specifically, Texas’s system for verifying the
signatures on mail-in ballots, and the state’s elimination of a “straight-ticket” voting
option (by which a voter could choose to vote in one step for all candidates of a single
party). The third case was an appeal from a ruling rejecting a sovereign immunity defense
in a challenge to provisions of the Texas Election Code regulating mail-in balloting.
Without reaching the merits of the voting rights claims, a majority of the Fifth Circuit
panel concluded that the claims against the Texas Secretary of State were barred on
sovereign immunity grounds. While the Supreme Court recognized in Ex Parte Young a
limited sovereign immunity exception for suits against state officials responsible for
enforcing a challenged law, the circuit panel majority held that exception did not apply
because local election officials, not the Secretary of State, enforced the laws at issue. The
circuit court reversed the district court decisions and remanded for further proceedings
(Lewis v. Scott; Richardson v. Scott; Texas Alliance for Retired Americans v. Scott).
 Environmental Law: A divided Ninth Circuit panel upheld a land-exchange agreement
entered by the Secretary of the Interior, allowing a road to be built through a national
wildlife refuge to connect two Alaskan communities. The Secretary had concluded that
the road would give one community easier access to the other’s airport for medical
evacuations and other purposes, which would promote the economic and social needs of
Alaskans. Reversing the district court, the majority held that the Secretary’s decision was
consistent with the purposes of the Alaska National Interest Lands Conservation Act,
which gives the Secretary discretion to strike an appropriate balance between such needs
and environmental interests. The majority also concluded that the Secretary provided an
adequate explanation for departing from the position of his predecessor, who had

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weighed the competing policy considerations differently and had not allowed the road to
be built (Friends of Alaska National Wildlife Refuges v. Haaland).
 Food & Drug: The Ninth Circuit held that the Family Smoking Prevention and Tobacco
Control Act (TCA) neither expressly nor impliedly preempted the County of Los
Angeles’s ban on the sale of flavored tobacco products. The court held that TCA gives
the federal government sole authority to establish standards for tobacco products, while
preserving state, local, and tribal authority to regulate or ban those products’ sale (R.J.
Reynolds Tobacco Co. v. County of Los Angeles).
 Immigration: Joining other circuits, the Second Circuit held that a conviction under 18
U.S.C. § 1001(a), which criminalizes the making of false statements in matters within the
jurisdiction of a federal agency or department, is a crime of moral turpitude, a category of
criminal offenses that carries serious immigration consequences (Cupete v. Garland).
 Immigration: The Eleventh Circuit held that a federal statute precluded judicial review
of U.S. Citizenship and Immigration Services’ (USCIS’) denial of national security
waivers to persons seeking immigration visas under 8 U.S.C. § 1153(b)(2), which
addresses persons with advanced degrees or exceptional abilities who have job offers
from U.S. employers. The circuit court indicated that while judicial review was barred
because waiver decisions were statutorily committed to agency discretion, the court’s
ruling did not address whether a challenge could be brought if USCIS failed to follow its
own rules and procedures in making a waiver determination (Brasil v. Secretary of the
Dep’t of Homeland Security).
 International Law: The Ninth Circuit held that the Foreign Sovereign Immunities Act
(FSIA) did not provide the Consulate of Kuwait with immunity from a suit by an
administrative assistant who alleged employment discrimination. While the FSIA
generally recognizes foreign states as immune from suit, several exceptions exist,
including for suits “based upon a commercial activity” by the foreign state in the United
States. The court held that the commercial activity exception applied here because, unlike
in the case of military, diplomatic, or civil service personnel, the administrative
assistant’s duties did not involve powers peculiar to sovereigns (Mohammad v. General
Consulate of the State of Kuwait in Los Angeles).
 International Law: The Sixth Circuit affirmed a district court’s decision to dismiss a
civil suit brought by a Mexican government agency against a U.S. corporation alleged to
have bribed Mexican officials. The district court dismissed the case after determining that
the Mexican courts were a more appropriate forum. The circuit court held that the United
Nations Convention Against Corruption did not foreclose the district court’s application
of forum non conveniens. The circuit court also ruled that the district court did not abuse
its discretion in concluding that the Mexican courts offered an available and adequate
forum, and that the balance of interests favored adjudication in Mexico (Instituto
Mexicano del Seguro v. Stryker Corp.).
 Labor & Employment: The Eleventh Circuit held that a restaurant’s 18% “mandatory
minimum service charge” to customer bills—which was then redistributed to certain
employees on a pro rata basis to cover the restaurant’s minimum and overtime wage
obligations—was not a “tip” for purposes of the Fair Labor Standards Act, which would
have prevented the restaurant from using the collected money for that purpose. The court
emphasized that the Act’s implementing regulations described a tip amount as being
determined solely by the customer, which the court viewed as a critical distinction from
the nondiscretionary, flat service charge set by the restaurant (Compere v. Nusret Miami,
LLC).

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 Speech: A Ninth Circuit panel upheld a district court’s preliminary injunction to halt
enforcement of a California labeling law (Prop. 65) on First Amendment grounds. The
law, as applied, requires the placement of cancer warnings on food and beverage products
containing acrylamide, and can be enforced through suits filed by the government or
private actors. The panel held that the district court properly employed the multifactor
test for commercial disclosure requirements set forth by the Supreme Court in Zauderer v.
Office of Disciplinary Counsel to assess whether the acrylamide warning label violated
the plaintiff’s First Amendment right against compelled speech. Among other things, the
panel held that the district court had adequate grounds to conclude the label was
controversial and misleading given scientific uncertainty about the cancer risk from
acrylamide, and therefore did not satisfy Zauderer review (California Chamber of
Commerce v. Council for Education & Research on Toxics).
 *Tax: Splitting with the Eleventh Circuit, a Sixth Circuit panel rejected procedural and
substantive challenges to the validity of a Department of Treasury regulation, 26 C.F.R.
§ 1.170A-14(g)(6), that addresses the disposition of proceeds that result from judicial
extinguishment of a conservation easement. The challenged rule is relevant to taxpayers’
ability to claim a charitable deduction on federal income tax returns for the donation of
an easement in land to a conservation organization (Oakbrook Land Holdings, LLC v.
Commissioner of Internal Revenue Service).
 Veterans: The Federal Circuit held that a veteran was not entitled to Department of
Veterans Affairs (VA) service-connected disability benefits for an alleged mental
condition. The veteran had not received a formal diagnosis of a mental condition, and the
panel concluded that such a diagnosis was a precondition to receive VA benefits
(Martinez-Bodon v. McDonough).
 Veterans: The Federal Circuit held that, although the VA must reimburse veterans for
coinsurance payments incurred during non-VA emergency medical treatment, it correctly
denied reimbursement for deductible payments. The court also effectively ended a class
action pending before the U.S. Court of Appeals for Veterans Claims, holding that the
Veterans Court improperly granted relief (Wolfe v. McDonough).

Author Information

Michael John Garcia

Deputy Assistant Director/ALD

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