Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (November 27–December 3, 2023)
Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(November 27–December 3, 2023)
December 4, 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
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Decisions of the Supreme Court
The Supreme Court did not issue any opinions or agree to hear any new cases last week.
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.
• Abortion: A divided Sixth Circuit affirmed in part and reversed in part a district court’s
decision not to issue a preliminary injunction halting enforcement of a 2021 Department
of Health and Human Services (HHS) rule for the Title X family-planning grant program.
The lawsuit challenging the rule, brought by Ohio and other states, turns on whether the
rule comports with Section 1008 of Title X, which bars funds appropriated for Title X
from being used “in programs where abortion is a method of family planning.” In Rust v.
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Sullivan, the Supreme Court held that Section 1008’s scope was ambiguous, entitling a
reasonable construction of the provision by HHS to Chevron deference. Applying Rust,
the Sixth Circuit held that one of the 2021 rule’s components, which required Title X
grant recipients make abortion referrals upon request, was based on a permissible
interpretation of Section 1008 as not barring this practice. The circuit panel majority held
that another component of the 2021 rule, which rescinded an earlier HHS requirement
that grant recipients keep family planning services physically and financially separate
from any abortion-related services, conflicted with Section 1008. The majority held that a
preliminary injunction halting enforcement of the rule was warranted but only as applied
to Ohio-based Title X grant recipients (Ohio v. Becerra).
• Bankruptcy: A divided Second Circuit held that, for purposes of determining whether
the safe harbor provision in 11 U.S.C. § 546(e) prevents a trustee in a Chapter 11
bankruptcy from avoiding certain types of transfers, a “financial institution” includes
bank customers only in transactions where a bank acted as the customer’s agent. Section
546(e) precludes bankruptcy trustees from avoiding transfers made by or to (or for the
benefit of) a financial institution in connection with a securities contract. A separate
provision defines financial institutions to include bank customers when a bank acts as an
agent of the customer in connection with a securities contract. The majority held that
analysis of whether a transfer is protected by the safe harbor must be analyzed on a
“transfer-by-transfer” basis, rejecting the district court’s and the dissent’s “contract-by-
contract” approach. The majority reasoned that the latter approach would absurdly result
in insulating every transfer made in connection with a leveraged buyout contract so long
as a bank acted as an agent for at least one transfer (In re: Nine West LBO Securities Lit.).
• Civil Procedure: The Second Circuit reversed a district court’s dismissal of a qui tam
complaint. The district court dismissed the complaint for failing to provide timely
service. The circuit court held that the unsealing of the complaint, without any further
order, did not start the service of process period under Federal Rule of Civil Procedure
4(m) because 31 U.S.C. § 3730(b)(2) of the False Claims Act does not permit a relator to
effectuate service of the complaint until the court issues an order permitting service
(United States ex rel. Weiner v. Siemens AG).
• Criminal Law & Procedure: The Second Circuit affirmed convictions for financial
institution bribery in violation of 18 U.S.C. § 215(a)(2) and conspiracy to commit
financial institution bribery in violation of 18 U.S.C. § 371. Financial institution bribery
occurs when an officer, director, employee, agent, or attorney of a financial institution
corruptly solicits or demands for the benefit of any person, or corruptly accepts or agrees
to accept, anything of value from any person, intending to be influenced or rewarded in
connection with any business or transaction of such institution. Construing the elements
necessary for such a conviction, the court held that (1) “corrupt” conduct describes
actions motivated by an improper purpose, even if such actions did not entail a breach of
duty and were also motivated, in part, by a neutral or proper purpose; (2) a “thing of
value” includes subjectively valuable intangibles, such as political assistance, including
endorsements, guidance, and referrals; and (3) a “thing of value” may be measured by its
value to the parties, by its exchange value, or by its market value (United States v. Calk).
• Criminal Law & Procedure: The Fourth Circuit held that a conviction under 18 U.S.C.
§ 1959(a)(3) for a violent crime in aid of racketeering (VICAR) activity that involves
assault with a dangerous weapon may support a subsequent conviction for use of a
firearm while committing a “crime of violence” under 18 U.S.C. § 924(c). Although the
Supreme Court has narrowed the scope of criminal conduct considered a “crime of
violence” under Section 924(c) in the years following the criminal defendant’s VICAR
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conviction, the circuit court held that the VICAR offense remains a valid predicate
offense to sustain a subsequent firearm conviction involving a crime of violence (United
States v. Thomas).
• Employee Benefits: The Ninth Circuit concluded that the fees deducted from the
monetary credit that plaintiff employees received when they opted out of their union and
employer-sponsored health plans were not part of those employees’ “regular rate” of pay
when calculating overtime compensation under the Fair Labor Standards Act (FLSA).
The court held that the fees fell under the FLSA exemption for “contributions irrevocably
made by an employer to a trustee or third person pursuant to a bona fide plan for
providing” health benefits (Sanders v. Cnty. of Ventura).
• Environmental Law: A divided Fifth Circuit affirmed a preliminary injunction directing
the State of Texas to halt the installation of a floating barrier in the Rio Grande intended
to deter unauthorized migration and to reposition the barrier onto the Texas-side
riverbank. The majority decided that the United States was likely to succeed in its
argument that the installation violated the Rivers and Harbors Appropriation Act of 1899
(RHA). The RHA bars obstructions to the “navigable” capacity of waters of the United
States unless authorized by Congress, and the law further bars the installation of any
“structure” in such waters without a U.S. Army Corps of Engineers (USACE) permit. The
majority affirmed the lower court’s factual finding that the portion of the Rio Grande
where the barrier was installed was “navigable,” and the majority also agreed that the
barrier was a “structure” requiring USACE approval (United States v. Abbott).
• *Immigration: The Sixth Circuit joined the Third, Fifth, and Eighth Circuits in holding
that “harboring” aliens in violation of 8 U.S.C. § 1324(a)(1)(A)(iii) encompasses conduct
that tends to substantially facilitate those persons remaining in the country illegally and
prevent authorities from detecting their presence. The controlling opinion characterized
the court’s approach as differing from that taken by the Second, Seventh, and Ninth
Circuits, which have held that a defendant must act intentionally or purposefully for
liability to attach, and the Eleventh Circuit, which requires a “knowing” mens rea (United
States v. Zheng).
• Religion: The Second Circuit held that a prisoner alleging a violation of his right to the
free exercise of religion under the First Amendment need not show that his religious
beliefs were “substantially burdened.” The court recognized that this requirement differed
from claims under the Religious Freedom Restoration Act because that statute expressly
requires a substantial burden inquiry. For a free exercise claim, the court held that a
plaintiff only need show that a government entity has burdened his sincere religious
practice pursuant to a policy that is not neutral or generally applicable (Kravitz v.
Purcell).
• Securities: The Second Circuit held that a company violated the Investment Company
Act of 1940 (ICA) when it restricted shareholders in certain closed-end investment funds
from voting additional shares acquired after reaching specified levels of ownership. The
ICA generally directs that all shares of common stock from registered investment
companies be voting stock with equal voting rights as other shares. The court held that
the defendant company’s restrictions violated the ICA’s plain text. The court rejected the
defendant’s claim that the ICA’s prohibition on share restrictions did not apply because
the company’s restrictions were directed at individual shareholders rather than shares
(Saba Cap. CEF Opportunities 1, Ltd. v. Nuveen Floating Rate Income Fund).
• Separation of Powers: The D.C. Circuit rejected former President Donald Trump’s effort
to dismiss consolidated civil suits against him by 2 U.S. Capitol Police officers and 11
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Members of Congress arising from the events at the U.S. Capitol on January 6, 2021. The
plaintiffs alleged that the former President tried to obtain a second term despite losing the
2020 presidential election, and that his postelection activities resulted in the January 6
riot at the U.S. Capitol. The court held that, at this stage in the case, the former President
had not shown that he was entitled to official-act immunity. The court held that a
campaign to retain the presidential office is not an official act of the office but a personal
act of an office-seeker. The court observed that its ruling did not go to the ultimate merits
of the plaintiffs’ claims, did not address the former President’s argument (not raised in
this appeal) that his actions were protected under the First Amendment, and did not
resolve whether other privileges may limit the use of certain evidence in the civil suit
(Blassingame v. Trump).
• *Torts: A divided Seventh Circuit held that a federal prisoner could not bring a Bivens
action alleging an Eighth Amendment failure-to-protect claim. The majority affirmed the
dismissal of the plaintiff’s complaint, which alleged that prison officials retaliated against
him for making complaints against a prison official by housing him with violent inmates.
Agreeing with the Fourth Circuit, and disagreeing with the Third, the majority explained
that a failure-to-protect claim is not one of the recognized Bivens causes of action, and
thus it is for Congress to determine whether to create a remedy for such a claim (Sargeant
v. Barfield).
Author Information
Michael John Garcia
Christina L. Shifton
Deputy Assistant Director/ALD
Section Research Manager
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