Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (July 24, 2023–July 30, 2023)

Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (July 24, 2023–July 30, 2023)

Legal Sidebari

Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(July 24, 2023–July 30, 2023)
July 31, 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
Last week, the Supreme Court did not issue any opinions or agree to hear any new cases. It did take action
in one case.
• Energy: The Supreme Court issued an unsigned order vacating stays issued by the
Fourth Circuit preventing construction of the Mountain Valley Pipeline. The Fourth
Circuit blocked construction of the pipeline in the Jefferson National Forest pending its
adjudication of petitions for review filed by environmental groups. The pipeline company
filed an emergency application asking the Supreme Court to vacate the Fourth Circuit
orders because of Section 324 of the Fiscal Responsibility Act of 2023, which addresses
judicial review of matters related to the Mountain Valley Pipeline. While the Court
dismissed the stay orders and allowed construction to continue, the environmental
groups’ petitions for review remain before the Fourth Circuit (Mountain Valley Pipeline,
LLC v. Wilderness Soc.).
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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.
• Bankruptcy: A divided Ninth Circuit ruled that when a debtor files a Chapter 13 petition
and then converts a case to Chapter 7, any pre-conversion increases in the equity of a
debtor’s asset belongs to the bankruptcy estate and not the debtor. In this case, the
debtors’ house increased in value between the filing of the Chapter 13 petition and the
conversion to Chapter 7. The circuit panel majority found support in two Bankruptcy
Code provisions. First, the majority looked to 11 U.S.C. § 348(f)(1)(A), which provides
that the property of the estate in the converted case includes property of the estate under
the debtor’s control on the date of conversion. The majority also looked to 11 U.S.C.
§ 541(a), which includes in the estate the “[p]roceeds, product, offspring, rents, or profits
of or from” estate property (Castleman, Sr. v. Burman (In re Castleman, Sr.)).
• Civil Procedure: The Ninth Circuit held that geographic limitations on federal courts’
authority to compel testimony apply even when a court permits a witness to testify by
videoconference. Under Federal Rule of Civil Procedure 45(c), a subpoena may only
command a witness to attend a trial, hearing, or deposition within 100 miles of where the
person resides, is employed, or regularly transacts business in person, or, under certain
circumstances, within the state where the person undertakes those activities. While Rule
43(a) allows a court to permit testimony via remote transmission, the Ninth Circuit held
that courts may not compel a witness to provide remote testimony from a location beyond
Rule 45(c)’s geographic reach (Kirkland v. U.S. Bankr. Ct., L.A.).
• Civil Rights: Resolving a circuit split and overruling its prior contrary precedent, a
divided Ninth Circuit, sitting en banc, held that 42 U.S.C. § 1981 does not by itself
authorize plaintiffs to sue state actors. Among other things, § 1981 prohibits
discrimination in making and enforcing contracts. The court explained that, although §
1981 establishes substantive rights that a state actor may violate, it does not contain a
remedy for such violations. Instead, a plaintiff seeking to enforce rights under § 1981
against a state actor must bring a claim under 42 U.S.C. § 1983, which creates a civil
cause of action for deprivation of rights by state actors acting under color of law
(Yoshikawa v. Seguirant).
• Criminal Law & Procedure: 18 U.S.C. § 1855 makes it a crime to “willfully and
without authority” set fire to land owned by the United States government. The Fourth
Circuit held that specific knowledge that the land set on fire is owned by the federal
government is not required for conviction. The court explained that no mental state
requirement attaches to the provision’s federal-ownership requirement, which the court
decided is a jurisdictional element. The court held, however, that § 1855 requires the
defendant to act “willfully,” and an honest mistake of fact about the ownership of the land
is a valid defense against willfulness (United States v. Evans).
• *Criminal Law & Procedure: A divided en banc Fifth Circuit held that engaging in
multiple drug conspiracies counts as committing multiple drug crimes, qualifying the
defendant for harsher sentences under the United States Sentencing Guidelines. The
majority deferred to the Sentencing Commission’s official commentary to the Guidelines,
which provides that a controlled substance offense for purposes of the career offender
guideline includes drug conspiracies. In finding the official commentary authoritative and
entitled to a high degree of deference, the Fifth Circuit joined the First, Second, Fourth,

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Seventh, and Tenth Circuits, in contrast with the Third, Sixth, Ninth, and Eleventh
Circuits, which accord lesser deference to the commentary (United States v. Vargas).
• *Criminal Law & Procedure: The Fifth Circuit held that the federal carjacking statute,
18 U.S.C. § 2119, does not require that a defendant intend to kill or cause serious injury
in furtherance of taking a vehicle. The court held that the statute has a broader
application, i.e., where a defendant has an unconditional intent to kill or harm a driver,
even if that harm is not necessary to complete a carjacking. The court cited the Supreme
Court’s decision in Holloway v. United States, which interpreted § 2119 as criminalizing
conduct that went beyond the objective of a carjacking. The court declined to follow the
approach of the Third Circuit, which held that a defendant needed to employ the use of
force with the intent to take a car to form the requisite intent under § 2119. The Fifth
Circuit reasoned that this narrower interpretation would be inconsistent with Holloway
(United States v. Jones).
• Criminal Law & Procedure: A divided Seventh Circuit joined several other circuits in
holding that convictions for multiple violations of 18 U.S.C. § 924(c)—which imposes
additional prison time for possessing a firearm in furtherance of a crime of violence or
drug trafficking crime—require the government to prove that the defendant decided to
possess a firearm during each underlying crime. The court held that a single, continuing
choice to possess a firearm during the commission of two simultaneous crimes is
insufficient to support multiple § 924(c) convictions (United States v. Evans).
• Environmental Law: Under the Clean Air Act (CAA), the Environmental Protection
Agency (EPA) and state, local, or tribal authorities issue Prevention of Significant
Deterioration (PSD) permits for newly constructed, air-polluting facilities. According to
EPA policy, an existing facility is considered “new” if EPA concludes it had been
previously shut down but then reactivated. The reactivated facility must then obtain a
PSD permit before operations may resume. The Third Circuit held that EPA’s policy
exceeded its statutory authority under the CAA. The court explained that the CAA
unambiguously limits issuance of PSD permits to newly constructed or modified
facilities. Accordingly, the court vacated an EPA letter requiring a reactivated facility
without modification to obtain a PSD permit (Port Hamilton Ref. and Transp. v. EPA).
• *Immigration: A divided Fourth Circuit panel held that an alien whose asylum status
was terminated following criminal convictions was ineligible to apply for adjustment of
status to lawful permanent resident under 8 U.S.C. § 1159(b). The court interpreted
§ 1159(b), which permits aliens granted asylum to seek adjustment of status, as requiring
the alien to have a cognizable “status” to “adjust.” The panel interpreted “status” as
referring to an alien’s current or present condition. The court rejected the petitioner’s
argument that prior status was sufficient for purposes of § 1159(b) because it does not
contain a “non-termination” requirement. The panel disagreed with a Fifth Circuit
decision that held an alien need not maintain their asylum status to apply for adjustment
of status (Cela v. Garland).
• Immigration: The Ninth Circuit held that the appointment and removal process for
immigration judges and members of the Board of Immigration Appeals (BIA) comports
with Article II of the Constitution. The court held that Congress has validly charged the
Attorney General with the appointment of these officials because they are inferior
officers under the Constitution’s Appointments Clause. The court further held that the
Attorney General may dismiss immigration judges and BIA members at will, which
complies with constitutional requirements because they remain accountable to the
Attorney General and, by extension, the President (Amador Duenas v. Garland).

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• *Immigration: The Eleventh Circuit held that a district court lacked subject-matter
jurisdiction to hear a complaint about the revocation of approval for a visa petition. The
court applied 8 U.S.C. § 1252’s bar on judicial review of certain discretionary
immigration decisions to the decision to revoke approval of a visa petition under 8 U.S.C.
§ 1155. The court added to the majority position in a circuit split by holding that a
revocation of a visa petition is one such discretionary decision (Bouarfa v. Sec’y, Dep’t of
Homeland Sec.).
• Intellectual Property: The Ninth Circuit held, in a case of first impression for that
circuit, that a company operating an online marketplace for products bearing user-
submitted artwork did not meet the Supreme Court’s test for contributory liability for
Lanham Act trademark infringement where the company had only general knowledge of
infringement on its platform. Adopting a rule in line with the Second, Fourth, and Tenth
Circuits, the court held that the defendant must know or have reason to know of specific
infringers or instances of infringement to be contributorily liable (Y.Y.G.M. V. Redbubble).
• Labor & Employment: The Eighth Circuit held that, in deciding whether an employee’s
bad-faith actions impeded the Secretary of Labor’s ability to decide the employee’s
administrative complaint until after expiration of the statutory deadline for doing so, the
district court cannot consider the employee’s actions after the deadline. 49 U.S.C.
§ 31105 prohibits employers from retaliating against employees for reporting commercial
motor-safety violations and permits employees alleging retaliation to file an
administrative complaint with the Secretary. Under § 31105(c), the complaining
employee can bring the case to a federal district court if the Secretary has not made a
final administrative decision within 210 days, provided that the delay in the Secretary’s
decision is not “due to the bad faith of the employee.” In this case, the Eighth Circuit held
that the record did not establish that the employee’s pre-deadline bad-faith conduct alone
caused the delay in deciding his administrative complaint, and remanded to the district
court for further inquiry on that issue (Wilson v. CTW Transp. Serv., Inc.).
• *Labor & Employment: The Civil Service Reform Act of 1978 allows federal
employees to appeal to the Merit Systems Protection Board (MSPB) for review of any of
five “particularly serious” adverse employment actions, including a removal. Splitting
from the Eighth Circuit, the Ninth Circuit held that when a federal employee seeking
MSPB review for removal adds discrimination claims for actions that are not expressly
listed as adverse employment actions, the employee must separately file those claims
with their agency’s Equal Employment Opportunity office, even when the removal is
factually related to the discrimination claims. The court reasoned, in part, that Congress
intended to limit the MSPB’s jurisdiction to only the five adverse employment actions
listed in 5 U.S.C. § 7512 (Crowe v. Wormuth).
• Securities: The Private Securities Litigation Reform Act of 1995 prohibits civil claims
under the Racketeer Influenced and Corrupt Organizations Act (RICO) for “fraud in the
purchase or sale of securities.” A divided Second Circuit, aligning with other circuits,
held that this prohibition “bars claims only when the alleged fraud is in the actual
purchase or sale of securities, not when securities are incidental to the fraud” (D’Addario
v. D’Addario).
• Tax: The Third Circuit affirmed a ruling of the United States Tax Court allowing a
manufacturer of generic drugs to deduct as ordinary and necessary business expenses the
legal fees incurred in defending itself against patent infringement lawsuits brought under
the Hatch-Waxman Act, which provides for streamlined patent litigation and Food and
Drug Administration (FDA) approval for generic drugs. The Third Circuit rejected the

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• Commissioner of Internal Revenue’s argument that such fees should instead be treated as
capital expenditures reflecting the cost of acquiring FDA approval to market generic
drugs (Mylan Inc. v. Comm’r of Internal Revenue).
• Telecommunications: In a class action suit under the Telephone Consumer Protection
Act of 1991 (TCPA), the Eleventh Circuit held that receiving an unwanted, automated
telemarketing text message was a concrete injury satisfying standing requirements under
Article III of the Constitution. The court explained that Congress identified a harm in
unwanted telemarketing texts when it enacted the TCPA and that harm shares a close
relationship with the common-law claim of intrusion upon seclusion (Drazen v. Pinto).

Author Information

Justin C. Chung
Alexander H. Pepper
Legislative Attorney
Legislative Attorney

Michael D. Contino

Legislative Attorney

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