Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (Jan. 3–Jan. 8, 2023)
Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(Jan. 3–Jan. 8, 2023)
January 9, 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 13 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
The Supreme Court did not issue any opinions or grants of certiorari this week.
Decisions of the U.S. Courts of Appeal
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.
Civil Rights: The Ninth Circuit ruled in favor of operators of two sober living homes—housing
for residents recovering from drug or alcohol addiction and who are individuals with a disability
under state or federal law—challenging city ordinances requiring them to acquire a permit and to
avoid being near other sober homes or addiction treatment facilities. The plaintiff sober homes
sued the city under, among other things, the Fair Housing Act (FHA) and the Americans with
Disabilities Act (ADA). The lower court granted summary judgment for the city, finding that the
operators did not establish that their residents either had a disability or were regarded by the city
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as having a disability. The Ninth Circuit reversed, holding that an actual disability under the FHA
and the ADA need not be shown individually and can be demonstrated collectively, such as by
evidence that the homes serve or intended to serve individuals with actual disabilities. The court
further held that the sober homes could satisfy the “regarded as” requirement under the FHA and
the ADA if they showed that the city perceived their residents as having disabilities; they need not
show that the city subjectively believed that any resident or potential resident met legal standards
for disability (SoCal Recovery, LLC v. City of Costa Mesa).
Criminal Law & Procedure: The Fourth Circuit held that, even if an incarcerated individual has
presented an “extraordinary and compelling” reason for a sentencing reduction under the First
Step Act, a district court may deny the reduction to preserve an original sentence that was reached
by plea agreement. The district court acknowledged that the individual had an “extraordinary and
compelling” reason for a sentencing reduction under 18 U.S.C. § 3582: his sentence was
excessive, as he received a sentence of 384 months pursuant to a plea agreement, but if he were
sentenced under current law, the minimum sentence would be 168 months. The district court
nonetheless denied compassionate release (which would result in a sentence reduction) so as not
to disturb the plea agreement. The Fourth Circuit affirmed the district court decision, holding that
a district court retains discretion to grant a sentencing reduction and that the consideration of the
plea agreement was an appropriate exercise of this discretion (United States v. Bond).
Criminal Law & Procedure: The Eighth Circuit held that to initiate a warrantless search of a
residence not known to be the home of a parolee, an officer must have probable cause, rather than
reasonable suspicion, to believe the dwelling is the residence of a parolee. Affirming the district
court in granting the defendant’s motion to suppress evidence obtained during a search, the
Eighth Circuit joined the Ninth Circuit in reasoning that the potential to violate the Fourth
Amendment constitutional rights of third parties in such searches necessitates a more rigorous
standard than reasonable suspicion. The court also emphasized that the higher bar was not
burdensome, as law enforcement should already possess substantial information needed to locate
parolees, and that the waiver signed by parolees allowing for searches of their own residences
nullifies any need for law enforcement to develop a reason to search (United States v. Thabit).
Criminal Law & Procedure: The Eleventh Circuit, on remand from the Supreme Court, held
that the jury instruction used to convict individuals of violating 21 U.S.C. § 841(a) inadequately
conveyed the mens rea requirement of the statute. Under 21 U.S.C. § 841, it is a crime to
“knowingly or intentionally . . . manufacture, distribute, or dispense” controlled substances,
“[e]xcept as authorized.” The Supreme Court vacated the convictions under § 841 of two doctors
who prescribed controlled substances, and who asserted they had acted in the good faith belief
that their conduct was permissible. The Court held that to obtain a conviction under this section,
the government must prove beyond a reasonable doubt that a defendant knowingly or
intentionally dispensed a controlled substance, and knowingly or intentionally did so in an
unauthorized manner. The Court remanded the cases so the lower courts could discern whether
the jury instructions in the two cases reflected an appropriate understanding of § 841’s scienter
requirement. On remand, the Eleventh Circuit concluded that the jury instruction had not properly
described this burden of proof and thus vacated the convictions affected by those flawed
instructions. Other convictions not affected by the flawed jury instructions were affirmed (United
States v. Ruan).
Environment: The Fifth Circuit upheld the Army Corps of Engineers’ issuance of a Clean Water
Act permit authorizing the development of a natural gas pipeline and export facility in Texas.
Under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), a court must set aside a Corps
permit if its issuance was “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” Denying a petition for review, the Fifth Circuit rejected the petitioners’
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arguments that the permit issuance failed to show that the approved project was the least
environmentally damaging practicable alternative and that the potential environmental effect on
the wetlands caused by pipeline construction necessitated compensatory mitigation. The court
held that the Corps satisfactorily explained its reasons for rejecting alternative plans and did not
act arbitrarily in its determination that the potential impacts to wetlands were temporary
(Shrimpers and Fishermen of the RGV v. U.S. Army Corps of Engineers).
Fair Credit Reporting Act (FCRA): The Second Circuit held that a credit reporting agency’s
decision to report the plaintiff’s private student loan debt after the plaintiff went through Chapter
7 bankruptcy did not violate the FCRA’s requirement in 15 U.S.C. § 1681e(b) that agencies take
reasonable steps to ensure the accuracy of information in consumer credit reports. The court
noted that reporting the student loan would only be inaccurate if it was dischargeable in
bankruptcy, which is a question of law that the bankruptcy court left unresolved. The Second
Circuit concluded, in agreement with all other circuit courts that have addressed the issue, that
inaccuracies that turn on legal disputes are not cognizable under the act’s accuracy requirement
(Mader v. Experian).
*Financial Regulation: The Third Circuit held that two provisions of the Sarbanes-Oxley Act—
statute of limitations (which requires an individual complaining of retaliation for whistleblowing
to file an administrative complaint within 180 days of the alleged retaliation) and exhaustion
requirement (which requires the individual to seek administrative relief prior to proceeding to
federal court)—are procedural and not jurisdictional. The Third Circuit explained that courts have
discretion to excuse violations of procedural provisions and that such violations will not
automatically result in dismissal. The court acknowledged that its holding rejected the Second
Circuit’s 2019 contrary interpretation of the exhaustion requirement but stated that the Second
Circuit’s approach is outdated in light of subsequent Supreme Court caselaw. The Third Circuit
concluded that dismissal here was nonetheless appropriate because the administrative complaint
was filed years after the 180-day deadline and amending the complaint would have been futile
(Jaludi v. Citigroup).
*Firearms: Sitting en banc, a divided Fifth Circuit held that a nonmechanical bump stock is not a
machinegun within the meaning of 18 U.S.C. § 921(a)(24). In a 2018 final rule, the Bureau of
Alcohol, Tobacco, Firearms, and Explosives classified bump stocks, an accessory that attaches to
a semiautomatic weapon to increase the rate of fire, as machineguns for purposes of the National
Firearms Act and the federal statutory ban on the possession or transfer of new machineguns. Of
the 16 members of the court, 13 agreed that an act of Congress is required to prohibit bump
stocks. A 12-member majority of the court agreed that even if the current statutory language were
ambiguous, the rule of lenity would require the court to interpret the law against imposing
criminal liability. Eight members of the court viewed the regulation as contrary to the plain
meaning of the statutory definition of machinegun because a bump stock does not fire a weapon
automatically and by a single function of the trigger, meaning the final rule violated the
Administrative Procedure Act. Three members of the court wrote in dissent that a bump stock met
the statutory definition of machinegun and that the majority improperly applied the rule of lenity.
The court reversed the judgment of the district court and remanded with instructions to enter
judgment against the government and determine the appropriate remedy (Cargill v. Garland).
First Amendment (Speech): The Ninth Circuit held that the First Amendment did not protect a
volunteer member of a municipal advisory board from dismissal for her political affiliations. The
court affirmed the district court’s dismissal of the volunteer’s complaint in which she alleged that
she was fired by the city councilmember who appointed her in retaliation for exercising her First
Amendment rights to free speech, association, and assembly by attending a political rally.
Concluding that the volunteer was acting as a political extension and public face of her appointer
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to the board, the Court held that political compatibility was an appropriate requirement for the
position and she could be fired for incompatible political activity (Lathus v. City of Huntington
Beach).
Immigration: The Fourth Circuit held that an alien’s prior conviction under a Virginia identity-
theft statute is categorically a crime of moral turpitude under 8 U.S.C. § 1227(a)(2)(A)(ii),
rendering him ineligible for cancellation of removal under 8 U.S.C. § 1229b. The individual
obtained a loan using a Social Security number that belonged to a Virginia resident. The Fourth
Circuit concluded the Board of Immigration Appeals did not err in finding the identity-theft
offense constituted a crime of moral turpitude because the state statute requires an intent to
defraud, and fraud is inherently a crime involving moral turpitude. The court noted that the
individual intended to defraud the bank, even if he did not intend to defraud the Virginia resident
(Salazar v. Garland).
Procurement: The Federal Circuit held that certain lobbying and strategic costs that Raytheon
charged the government were unallowable under the Federal Acquisition Regulation (FAR). In its
incurred-cost submissions to the government, Raytheon did not account for lobbying activities
that occurred outside of normal business hours. The court concluded that, because after-hours
lobbying activities were considered part of their employees’ regular duties and factored in these
employees’ salaries, the company charged the government for unallowable lobbying costs. The
court also concluded that the strategic costs involving Raytheon’s decisions about whether to
submit an offer or whether to go to market were associated with planning mergers and
acquisitions that are expressly unallowable under the FAR and therefore should not have been
charged to the government. The court remanded the case to the Armed Services Board of Contract
Appeals for an assessment of how much Raytheon should repay the government (Secretary of
Defense v. Raytheon Company).
Terrorism: The Second Circuit held that a direct connection to terrorist groups is not necessary
to prove a conspiracy violation under the Antiterrorism Act (ATA), as amended by the Justice
Against Sponsors of Terrorism Act (JASTA). 18 U.S.C. § 2333(a) of the ATA states that any U.S.
national injured by an act of international terrorism may sue in federal court to recover civil
damages, and JASTA’s amendments established secondary liability for aiding and abetting or
conspiracy in 18 U.S.C. § 2333(d)(2). The Second Circuit held that the district court erred in
concluding that § 2333(d)(2) required plaintiffs to allege that several banks conspired directly
with terrorist organizations, highlighting Congress’s purpose to provide civil litigants with the
broadest possible basis to seek relief. However, the court ultimately affirmed the district court’s
judgment to dismiss the JASTA conspiracy claims since the plaintiffs did not sufficiently allege a
direct or indirect conspiracy between the banks and terrorist groups (Freeman v. HSBC Holdings
PLC).
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Author Information
Dave S. Sidhu
Jimmy Balser
Legislative Attorney
Legislative Attorney
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