Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (September 5, 2023–September 10, 2023)
Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(September 5, 2023–September 10, 2023)
September 11, 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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attorneys.
Decisions of the Supreme Court
The Supreme Court did not issue any opinions or grant certiorari in any cases last week. The Supreme
Court’s next term is scheduled to begin October 2, 2023.
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.
• Consumer Protection: The Fourth Circuit held that the Telephone Consumer Protection
Act’s prohibition against faxing an “unsolicited advertisement” is limited to faxes that are
commercial in nature. The court further held that one set of allegations in the complaint—
allegations that a business sent faxes to promote a free product because it earned
commissions when fax recipients accepted the product—met this commercial-in-nature
standard. Another set of allegations—allegations that faxes were sent as a pretext for or
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prelude to future commercial advertising—fell short of the standard because the plaintiff
did not allege that receipt of future advertisements depended on acceptance of the free
product (Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC).
• *Criminal Law & Procedure: The Eleventh Circuit joined a circuit split as to whether a
federal criminal defendant sentenced under 18 U.S.C. § 3853 to a period of supervised
release following imprisonment may have the supervised release period tolled if he
absconds. The court decided that neither the text of § 3853 nor circuit caselaw supported
applying the judicially crafted “fugitive tolling doctrine” to those who violate the
conditions of their supervision and abscond. The Eleventh Circuit joins the First Circuit
in this view, while the Second, Third, Fourth, and Ninth Circuits apply the fugitive tolling
doctrine to terms of supervised release (United States v. Talley).
• Employee Benefits: Joining the Third, Sixth, Seventh, and Eighth Circuits, the Tenth
Circuit held that a claim for breach of the Employee Retirement Income Security Act‘s
fiduciary duty of prudence may be based on allegations that investment management fees
associated with a defined contribution plan are too high when compared to other
available options. The court held that, to state such a claim, the plaintiff must allege a
“meaningful benchmark” from which a price disparity can be evaluated. Applying that
principle, the court affirmed dismissal of the plaintiffs’ complaint (Matney v. Barrick
Gold of North America).
• Energy: The Ninth Circuit held that four revisions to the Federal Energy Regulatory
Commission’s (FERC’s) rules implementing the Public Utility Regulatory Policies Act of
1978 (PURPA) were consistent with PURPA and the Administrative Procedure Act. The
court, however, went on to hold over a dissent that FERC violated the National
Environmental Policy Act of 1969 (NEPA) by failing to prepare an environmental
assessment before making the changes. The four revised rules, which FERC adopted in
2020, affect which facilities qualify for certain benefits under PURPA and how those
facilities are compensated. The court reasoned that PURPA gives FERC broad discretion
to evaluate and revise such rules and that the challenged revisions are reasonable. The
court then explained that the revisions would foreseeably shift energy production away
from renewable production and toward fossil-fuel production, and FERC was therefore
required to prepare an environmental assessment under NEPA. Because vacating the rules
would have significant disruptive effects, the court concluded that remand without
vacatur was the appropriate remedy for the NEPA violation (Solar Energy Industries
Ass’n v. FERC).
• Firearms: In a case challenging the constitutionality of California’s restrictions on
openly carrying handguns in public, the Ninth Circuit ruled that the district court applied
the wrong legal standard when it denied plaintiffs’ motion to block criminal enforcement
of the restrictions during the pendency of the case. On remand, the circuit court instructed
the district court to consider plaintiffs’ likelihood of success on the merits, which the
lower court had not done when denying the injunction request. Citing the framework set
forth by the Supreme Court in New York State Rifle & Pistol Association v. Bruen to
determine whether a gun restriction comports with the Second Amendment, the Ninth
Circuit directed the lower court to consider (1) whether California’s open-carry
restrictions regulate conduct covered by the text of the Second Amendment and (2) if so,
whether the restrictions closely resemble a well-established historical analogue in effect
when the Second or Fourteenth Amendment were ratified (Baird v. Bonta).
• *Immigration: The Ninth Circuit considered when an alien subject to a reinstated
removal order may seek judicial review of a later administrative denial of that alien’s
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eligibility to pursue withholding of removal. Under 8 U.S.C. § 1252(b)(1), a “final” order
of removal may be appealed to a U.S. circuit court not later than 30 days of the date of
the order. Acknowledging a circuit split on this question, the Ninth Circuit held that the
30-day clock was triggered by the completion of the later relief proceedings and not the
earlier reinstatement of the removal order (Alonso-Juarez v. Garland).
• *Immigration: The Tenth Circuit examined the method for computing the maximum
period during which an alien may be permitted to voluntarily depart the United States or
file an administrative motion reopening proceedings after the alien is found removable. 8
U.S.C. § 1229c(b)(2) provides that an immigration judge may issue an order granting the
alien the ability to voluntarily depart the country in lieu of being ordered removed and
that the voluntary departure period may last up to 60 days. The Tenth Circuit held that
this period may not exceed 60 calendar days from the date of service of the voluntary
departure order. The court noted it disagreed with the Ninth Circuit, which held that a
voluntary departure period extended to the next business day when the 60th day falls on a
federal holiday or weekend (Monsalvo Velazquez v. Garland).
• Insurance: The Second Circuit considered the meaning of § 215(b) of the Investment
Advisers Act of 1940 (IAA), which provides a basis for suit to void a contract when
either (1) the contract was made in violation of the IAA or (2) the contract’s performance
involves a violation of the statute. With regard to the second ground, the court ruled that a
suit cannot be brought under § 215(b) solely because a party engaged in illegal conduct
under the IAA; the performance of that conduct must have also been necessary for the
party to fulfill its contractual obligations (NexPoint Diversified Real Estate Trust v. ACIS
Capital Management, L.P.).
• Public Health: The Ninth Circuit decided that § 3202 of the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act), which generally requires health insurance
companies that cover COVID-19 testing to reimburse providers at specified rates, did not
create a private right of action allowing providers to sue insurers. Provisions in the
CARES Act and related laws made evident that Congress intended § 3202 to be enforced
by federal regulators, and the court held that the language used by these laws did not also
authorize enforcement through private suit (Saloojas, Inc. v. Aetna Health of California,
Inc.).
• Tax: The First Circuit ruled that a U.S. company was required to make a lump-sum tax
payment for its transfer of more than a billion dollars of intangible property to a foreign
affiliate, when that transfer was done in exchange for stock as part of a corporate
reorganization and the stock in the foreign affiliate is subsequently distributed to the U.S.
company’s shareholders. Agreeing with the Tax Court below, the First Circuit concluded
that the stock distribution to the shareholders constituted a “disposition following such
transfer” subject to a lump-sum tax payment under § 367 of the Internal Revenue Code. If
the court found that the stock distribution was not a “disposition following such transfer,”
the tax attributable would ordinarily have been paid over time on an annual basis. Since
the transferor ceased to exist after the reorganization, it could not receive such payments
and another of the company’s U.S. subsidiaries instead reported the payment under a
related code section. Had there been no U.S. subsidiary, the company’s interpretation
would have meant that the income from its appreciated assets would have escaped U.S.
tax completely (TBL Licensing LLC v. Commissioner of Internal Revenue).
• Terrorism: In cases decided the same day, a panel for the Second Circuit struck down as
unconstitutional a provision of the Promoting Security and Justice for Victims of
Terrorism Act of 2019 (PSJVTA), found in 18 U.S.C. § 2334, under which the Palestinian
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Liberation Organization and Palestinian Authority are deemed to have consented to U.S.
courts’ exercise of personal jurisdiction over them in civil suits brought under the Anti-
Terrorism Act (ATA) if certain criteria are met. The provision states that those entities
“shall be deemed to have consented to personal jurisdiction” to civil suit under the ATA,
regardless of the date of occurrence of the underlying act of terrorism, if following
enactment of the PSJVTA, they either (1) make payments to the designees or family of
persons who were incarcerated following acts of terrorism that injured or killed U.S.
nationals, or who died while committing those acts; or (2) subject to limited exceptions,
engage in any activities within the United States. The court held that the PSJVTA did not
establish the defendants’ valid consent to be sued in a court that lacks personal
jurisdiction over them, and therefore violated the defendants’ rights under the Fifth
Amendment’s Due Process Clause (Fuld v. Palestinian Liberation Org.; Waldman v.
Palestine Liberation Org.).
Author Information
Michael John Garcia
Peter J. Benson
Deputy Assistant Director/ALD
Legislative Attorney
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