Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (Dec. 5–Dec. 11, 2022)
Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(Dec. 5–Dec. 11, 2022)
December 12, 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 typical y 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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attorneys.
Decisions of the Supreme Court
Last week, the Supreme Court granted certiorari in four cases:
Arbitration: The Supreme Court agreed to hear a case from the Ninth Circuit between
the cryptocurrency exchange platform Coinbase and one of its users. The parties ask the
Court whether an interlocutory appeal from an order denying a motion to compel
arbitration under the Federal Arbitration Act divests a district court of jurisdiction to
proceed with the litigation pending appeal (Coinbase v. Bielski).
Criminal Law & Procedure: The Supreme Court agreed to review a case from the
Second Circuit to decide whether drug traffickers or those who commit violent crimes
and cause death by using or carrying a firearm must serve a prison term for such conduct
that is consecutive to other offenses under the same statute. The Court is asked to
determine whether two different subsections of 18 U.S.C. § 924 carry the same
prohibition on imposing concurrent, as opposed to consecutive, sentences (Lora v. United
States).
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Immigration: The Supreme Court granted certiorari in a case from the Ninth Circuit
regarding a federal law that makes it a crime to encourage il egal immigration. In 2020,
the Court vacated and remanded on procedural grounds a Ninth Circuit decision
regarding another chal enge to this statute. The Court is asked whether the law is
unconstitutional y overbroad under the First Amendment (United States v. Hansen).
Tax: The Supreme Court agreed to review a case from the Sixth Circuit to decide
whether third parties associated with a delinquent taxpayer are entitled to notice and an
opportunity to bring an action to quash when the Internal Revenue Service summons their
bank account records. The parties disagree whether those summonses fal within an
exception to the tax code’s notification requirements (Polselli v. IRS).
Decisions of the U.S. Courts of Appeals
Topic headings marked with an asterisk (*) indicate cases in which the appel ate court’s controlling
opinion recognizes a split among the federal appel ate courts on a key legal issue resolved in the opinion,
contributing to a non-uniform application of the law among the circuits.
Business: The Federal Circuit upheld the Smal Business Administration’s decision not
to immediately apply the Smal Business Runway Extension Act (REA) amendment to
the Smal Business Act (SBA) when determining whether a company is a smal business.
The REA amended one subsection of the SBA to change from three years to five years
the period of annual average receipts that agencies use to determine whether a business
qualifies as a smal business. The Smal Business Administration claimed that a separate,
less stringent part of the SBA governed its own business-size criteria. The court ruled that
the REA did not apply to the Smal Business Administration because, in drafting the
SBA, Congress created two subsections on business-size factors, making the broader one
applicable to the Smal Business Administration and the narrower one applicable to al
other agencies. The REA, the court reasoned, did not limit the Smal Business
Administration’s authority because it amended only the narrower SBA provision
(Obsidian Solutions Group, LLC v. United States).
Civil Rights: The Eighth Circuit affirmed a grant of declaratory and injunctive relief to a
coalition of Catholic Church entities contesting regulations implementing Section 1557 of
the Patient Protection and Affordable Care Act. The plaintiffs chal enged multiple Health
and Human Services Department rules interpreting Section 1557 as requiring that
covered entities provide gender-affirming care, with no religious exemption. They also
chal enged the Equal Employment Opportunity Commission’s (EEOC’s) interpretation of
Title VII of the Civil Rights Act of 1964 as prohibiting employers from discriminating on
the basis of gender identity. The district court held that the plaintiffs had Article III
standing to chal enge the interpretation of those laws. On appeal, the Eighth Circuit
affirmed that the plaintiffs had suffered an injury in fact, the only standing factor at issue.
The court reasoned that Section 1557 arguably proscribed the plaintiffs from refusing to
perform or cover gender-transition procedures. The court reasoned that HHS had not
disavowed enforcement action against the plaintiffs, had declined to implement a
religious exemption, and could not identify a history of non-enforcement against the
plaintiffs. The court also held that the plaintiffs had shown a credible threat of
enforcement with the EEOC, which had engaged in a coordinated effort with HHS to
enforce the statutes (The Religious Sisters of Mercy v. Becerra).
Commerce: The Second Circuit held that a private party cannot state a claim under
Section 22 of the Commodity Exchange Act (CEA) where the al eged conduct occurred
predominantly outside the United States. The court applied the presumption against
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extraterritoriality, a canon of statutory interpretation, to Section 22, which affords a
private right of action for violations of the CEA. The court ruled that Section 22 lacked
any affirmative congressional intention to have extraterritorial effect. Thus, claims that
rely on Section 22 must involve a domestic application of the CEA. Accordingly, the
court held, a private Section 22 plaintiff must plead both a domestic transaction and
sufficiently domestic conduct by a defendant (Laydon v. Coöperative Rabobank U.A.)
Criminal Law & Procedure: The Second Circuit interpreted a provision of the Victims
of Trafficking and Violence Protection Act of 2000 (TVPA) in affirming the conviction of
the leader of the NXIVM organization and the secret society cal ed DOS. The court
focused on the meaning of “commercial sex act,” defined as “any sex act, on account of
which anything of value is given to or received by any person.” Parsing the TVPA, the
court disagreed with the convicted appel ant that a commercial sex act contains a
monetary or financial component and that the sexual exploitation must be for profit. The
court reasoned that: Congress’s repeated use of the prefix “any” reflected an expansive
understanding of the phrase “anything of value”; circuit precedent dictated that the phrase
applied to both tangibles and intangibles; and under an expansive definition, “value” need
not have a monetary or financial component (United States v. Raniere).
*Criminal Law & Procedure: The Second Circuit upheld a district court’s decision not
to re-open the pre-trial detention of a criminal defendant charged with murder-for-hire.
Disagreeing with the approach of the Ninth Circuit, the court held that the weight
assigned to each factor considered under the Bail Reform Act, 18 U.S.C. § 3142(g), when
determining whether a defendant should be detained before trial wil vary depending on
the facts of the case. The court added that one factor—evidence of a defendant’s guilt—
may be a “key consideration” in pre-trial determinations. By contrast, the Ninth Circuit
has stated that the weight of the evidence is the “least important” factor under § 3142(g)
and that courts should be wary of predetermining guilt. The Second Circuit rejected the
argument that giving strong consideration to evidence of guilt at the pre-trial phase
undermines the presumption of innocence, which it held applies only at trial (United
States v. Zhang).
*Criminal Law & Procedure: A divided Eleventh Circuit, sitting en banc, deepened a
circuit split over the meaning of the “safety valve” provision of the First Step Act, 18
U.S.C. § 3553(f), which al ows a court to depart downwards from a mandatory minimum
sentence if a criminal defendant has, among other things, “more than 4 criminal history
points ... a prior 3-point offense, ... and a prior 2-point violent offense.” Looking to the
plain text of the statute, the majority agreed with the Ninth Circuit that a defendant must
meet al three of these conditions to be ineligible for safety-valve relief. The court
departed from the holdings of the Fifth, Seventh, and Eighth Circuits, which had held that
a defendant who satisfies any one of the three conditions is disqualified from safety-valve
relief. The Eleventh Circuit disagreed that its interpretation of the statute rendered
conditions superfluous, produced absurd results, or that, in light of what it viewed as the
statute’s clear language, it could consult the legislative history for further evidence of
Congress’s intent (United States v. Garcon).
*Education: Recognizing a circuit split, the Fourth Circuit held that the exhaustion
requirement of the Individuals with Disabilities Education Act (IDEA), 20 U.S.C.
§ 1415(l), is not jurisdictional. The court departed from its own precedent in light of more
recent Supreme Court jurisprudence holding that exhaustion and other procedural
requirements are not jurisdictional absent a clear statement from Congress. The circuit
court explained that the IDEA’s exhaustion requirement is a claims-processing rule and is
thus subject to exceptions, including waiver, forfeiture, and equity. The court declined to
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find that any exceptions applied in this case, holding that it was bound by the state’s
application of its own procedural rules (K.I. v. Durham Public Schools Board of
Education).
Intellectual Property: Considering a motion for a preliminary injunction, the D.C.
Circuit held that the Digital Mil ennium Copyright Act (DMCA) likely did not violate the
First Amendment as applied to an inventor who wanted to distribute a device containing
computer code that would al ow users to circumvent technological controls preventing
the recording and distribution of copyrighted digital material. The court held that the
DMCA did not target any expressive content within computer code but only the code’s
function. As the law is content-neutral, the court thought it would likely survive
intermediate scrutiny due to the government’s substantial interest in combating digital
piracy (Green v. U.S. Department of Justice).
Immigration: A divided panel of the Sixth Circuit held that 8 U.S.C. § 1252(g), which
strips courts of jurisdiction over claims brought by “any alien arising from the decision or
action by the Attorney General to ... execute removal orders,” did not bar lawsuits arising
from the execution of removal orders against participants in the Deferred Action for
Childhood Arrivals (DACA) program. Considering the text of the statute, evidence of
congressional intent, and the presumption in favor of judicial review of administrative
action, the panel held that the term “removal orders” in § 1252(g) refers only to
“executable removal orders,” and that removal orders for DACA recipients are not
executable because those individuals have been granted temporary relief from removal.
The panel recognized that its decision is in tension with decisions from the Fifth and
Eighth Circuits, which have held that courts have no jurisdiction to consider claims
arising from the execution of removal orders subject to a stay (Enriquez-Perdomo v.
Newman).
*Immigration: Sitting en banc, a divided Ninth Circuit affirmed a Board of Immigration
Appeals (BIA) ruling that an alien who had immigrated to the United States was
removable under 8 U.S.C. § 1227(a)(2)(E)(i) because of a conviction for a “crime of
child abuse, child neglect, or child abandonment.” The decision added to a circuit split
over the BIA’s interpretation of the statute. A plurality of the en banc court ruled that the
BIA was entitled to deference in its interpretation of Section 1227(a)(2)(E)(i) as
encompassing any offense involving an intentional, knowing, reckless, or criminal y
negligent act or omission that constitutes maltreatment of a child or that impairs a child’s
physical or mental wel -being, including sexual abuse or exploitation (Diaz-Rodriguez v.
Garland).
Procurement: The Federal Circuit held that the Defense Logistics Agency did not owe a
contractor interest under the Contract Disputes Act (CDA), 41 U.S.C. § 7109(a)(1), on
payments it over-withheld while evaluating fraud claims against the contractor. The
Federal Circuit held that the CDA al ows contractors to recover interest only when the
contractor prevails on its own claim. The contractor’s claim failed due to its fraud. The
court held the contractor could not recover any interest on payments it received following
a determination of the government’s claim (Supreme Foodservice GmbH v. Director of
the Defense Logistics Agency).
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Author Information
Michael D. Contino
Abigail A. Graber
Legislative Attorney
Legislative Attorney
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