Congressional Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (January 8–January 15, 2024)
Legal Sidebari
Congressional Court Watcher: Recent
Appellate Decisions of Interest to Lawmakers
(January 8–January 15, 2024)
January 16, 2024
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 agreed to review five cases:
• Arbitration: The Court granted certiorari in a case from the Ninth Circuit to decide
whether a district court has discretion to dismiss a suit after determining that the claims it
raises are arbitrable, or whether Section 3 of the Federal Arbitration Act requires the court
to stay rather than dismiss the case while arbitration is pending (Smith v. Spizzirri).
• Civil Rights: The Court agreed to hear a case from the Alabama Supreme Court on
whether plaintiffs must first exhaust their state administrative remedies before bringing
suit in state court under 42 U.S.C. § 1983, which creates a federal cause of action for
deprivation of civil rights by state actors acting under the color of law (Williams v.
Washington).
• Housing: The Court agreed to hear a case from the Ninth Circuit on whether a city
ordinance prohibiting camping on public property violates the Eighth Amendment’s
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prohibition on cruel and unusual punishment if enforced against homeless persons who
lack access to temporary shelter (City of Grants Pass v. Johnson).
• Immigration: The Court granted certiorari in a case from the Ninth Circuit to consider
whether the alleged burden that a visa denial has upon the constitutional right to marriage
possessed by the applicant’s U.S. citizen-spouse justifies an exception to the usual rule
prohibiting judicial review of visa decisions (Dep’t of State v. Muñoz).
• Labor & Employment: In a case from the Sixth Circuit, the Court is asked the
appropriate test for deciding whether to grant requests for preliminary injunctive relief
under Section 10(j) of the National Labor Relations Act. Section 10(j) permits a district
court to grant a National Labor Relation Board request for preliminary injunctive relief
pending the Board’s adjudication of an unfair labor practice complaint if the court finds
the relief “just and proper” (Starbucks Corp. v. McKinney).
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.
*Criminal Law & Procedure: The Seventh Circuit upheld a defendant’s conviction
under 18 U.S.C. § 1014, which prohibits individuals from making “false statements” to
influence a financial institution with respect to a loan, when the defendant’s statements
were true but misleading. When the Federal Deposit Insurance Corporation (FDIC)
sought to collect the debt owed by the defendant to a defunct lending institution, the
defendant contested the total amount the FDIC stated that he owed and repeatedly
declared that he had “borrowed $110,000.” Although it was technically true that the
defendant borrowed $110,000 from the lender on one occasion, he failed to mention that
he owed the lending institution over twice that amount because of additional loans he had
taken. Applying circuit precedent, the circuit panel held, in upholding the conviction, that
Section 1014’s prohibition on false statements includes misleading representations. The
panel acknowledged a split with the Sixth Circuit, which has held that Section 1014 does
not criminalize misleading statements (United States v. Thompson).
• *Criminal Law & Procedure: A divided Ninth Circuit affirmed a district court’s sua
sponte dismissal, pursuant to the Supreme Court’s decision in Heck v. Humphrey, of a
state prisoner’s suit under 42 U.S.C. § 1983 against prison officials for alleged due
process violations arising in a disciplinary hearing. Under Heck, a district court must
dismiss a state prisoner’s suit seeking damages under Section 1983 if a judgment in the
prisoner’s favor would necessarily imply the invalidity of the prisoner’s conviction or
sentence, unless the prisoner had successfully challenged the sentence already in habeas
proceedings. Here, the prisoner sought expungement of his disciplinary convictions as
well as damages for the sanctions imposed by the prison official other than the revocation
of earned-time credit; he sought no relief for this last sanction. Disagreeing with the
Second Circuit’s decision in a similar case, the Ninth Circuit majority held that the
prisoner’s claim was barred by Heck despite his decision not to directly challenge the
imposition of one of the disciplinary sanctions. The majority reasoned that the prisoner’s
request for expungement of his disciplinary convictions would necessarily invalidate all
the underlying sanctions, including the earned-time credit sanction that lengthened his
sentence, and therefore the case fell under Heck’s scope. Because the prisoner had not
brought a successful habeas challenge first, the court held that it must dismiss the suit on
its own (Hebrard v. Nofziger).
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• Employee Benefits: The Ninth Circuit held that under the Employee Retirement Income
Security Act of 1974 (ERISA), health care providers may bring derivative suits for
nonpayment of benefits against insurers on behalf of their patients when there is a valid
assignment of rights to the provider. Although health care providers cannot directly sue
an insurer under ERISA because the statute only empowers “participants, beneficiaries,
or fiduciaries” to file such a claim, the court held that ERISA does not forbid a patient
from assigning to their provider the right to file a claim on the patient’s behalf (S. Coast
Specialty Surgery Ctr., Inc. v. Blue Cross of California).
• Energy: The Fifth Circuit held that the Department of Energy (DOE) acted arbitrarily
and capriciously when it issued a 2022 rule (Repeal Rule) under the Energy Policy and
Conservation Act of 1975 (EPCA) that rescinded 2020 rules that exempted certain
dishwashers and washing machines from existing energy and water use restrictions. The
Fifth Circuit held that DOE did not adequately consider the potential negative
consequences of repealing the 2020 rules, including the possibility that reducing access to
better cleaning but less energy-efficient appliances would cause consumers to increase
overall energy and water use by resorting to handwashing or running multiple cycles of
more energy-efficient but lower-performing dishwashers and washing machines. The
court also held the DOE did not appropriately consider the Repeal Rule’s impact on the
availability of desired appliance “performance characteristics,” as required by EPCA. The
court held that under Supreme Court precedent, the DOE could not rescind the 2020 rules
solely because it believed they were unlawful; the agency also needed to consider
alternatives that would comport with EPCA besides the complete rescision of the rules.
The court remanded the rule back to the agency for further consideration (Louisiana v.
U.S. Dep't of Energy).
• Environmental Law: A divided Fourth Circuit stayed the application of the
Environmental Protection Agency’s (EPA’s) final rule that found that West Virginia’s
State Implementation Plan to meet EPA’s air quality standards for emissions of ozone-
forming gases was inconsistent with Clean Air Act requirements. In staying the action
pending appeal at the Fourth Circuit, the panel concluded that (1) West Virginia would be
irreparably harmed by having to expend significant resources to comply with the final
rule; (2) the stay would not substantially injure the EPA because previously approved
EPA standards would remain in place pending the result of the appeal; (3) although the
public has an interest in reduced ozone emissions, the public also has a competing
interest in efficient energy production and the stay will be short in duration; and (4) both
parties provided plausible grounds in support of their positions on the merits (West
Virginia v. EPA).
• *Environmental Law: The Eleventh Circuit held that the D.C. Circuit was the
appropriate venue for a small refinery’s challenge to the EPA’s denial of its requested
exemption from the Renewable Fuel Standard (RFS) requirements of the Clean Air Act
(CAA). The CAA’s judicial review provision, 42 U.S.C. § 7607(b)(1), makes the D.C.
Circuit the appropriate venue for challenges to (1) “nationally applicable” final actions by
the EPA under the CAA and (2) “locally or regionally applicable” final actions “based on
a determination of nationwide scope or effect” when the EPA publishes notice of that
determination. The Eleventh Circuit held that the denial of the refinery’s requested
exemption was part of a nationally applicable final action by the EPA, resulting from the
EPA’s reinterpretation of the governing statute and new analytical approach to assessing
eligibility for exemption based on disproportionate economic hardship from compliance
with the RFS. Even if the denial of the exemption request was a “locally or regionally
applicable” final action, the court held that the D.C. Circuit was the appropriate venue
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because the EPA published its findings that the exemption denial was based on a
determination of nationwide effect. The panel observed that four other circuits agreed that
the D.C. Circuit was the appropriate venue in similar cases, with only the Fifth Circuit
deciding otherwise (Hunt Ref. Co. v. EPA).
• Financial Regulation: The Fifth Circuit vacated a civil penalty against a broker for
violating a Commodity Futures Trading Commission (CFTC) rule that prohibits an
introducing broker from “tak[ing] . . . the other side of any order” of another person if the
broker learned of the order through his or her relationship with that person. Although
CFTC has enforced this rule against brokers that have a direct financial interest in a
futures trade, in this case, for the first time nearly four decades after the rule was
promulgated, the CFTC brought a civil suit against an introducing broker who did not
have a direct financial interest in the transaction because he was trading energy futures on
behalf of another individual. The circuit panel vacated the judgment because it held that
the CFTC did not provide the broker with fair notice that the CFTC interpreted the rule to
prohibit such trades where a broker had no personal financial interest in the transaction
(Commodity Futures Trading Comm’n v. EOX Holdings, LLC).
• Intellectual Property: The Ninth Circuit directed a district court to dismiss a putative
class-action suit asserting California state-law implied-in-law contract, unjust enrichment,
and trespass claims against Google based on how class-action members’ websites were
displayed on a Google mobile app. In a matter of first impression, the court ruled that
plaintiffs’ implied-in-law contract and unjust enrichment claims were preempted by
federal copyright law. The circuit court held that commercial websites may qualify for
copyright protection, even though they are not enumerated as copyrightable “works of
authorship” under Section 102(a) of the Copyright Act. Because the essence of the
plaintiffs’ contract and unjust enrichment claims relied on (1) the alleged display or
reproduction of copyrightable works and/or (2) the creation of derivative works by
Google, the claims implicated the exclusive rights that would belong to plaintiffs as
copyright holders and were therefore preempted by federal copyright law. With regard to
the trespass claim, the circuit panel decided that plaintiffs lacked a cognizable property
interest in the copies of their websites that appeared on users’ screens sufficient to
support a trespass to chattels (i.e., personal property) claim against Google (Best Carpet
Values, Inc. v. Google, LLC).
• Labor & Employment: A divided D.C. Circuit panel granted the National Labor
Relations Board’s (NLRB’s) request to enforce an order directing that T-Mobile dissolve
a company-created group, “T-Voice,” which consisted of company-selected employees
and was designed to provide a vehicle for employee feedback to management. The
NLRB concluded that T-Voice was a “labor organization” under the National Labor
Relations Act and that T-Mobile’s control over it constituted an unfair labor practice. The
D.C. Circuit held that substantial evidence supported the NLRB’s conclusion because
there was a pattern or practice of bilateral dealing where T-Voice representatives offered
proposals on behalf of the group relating to conditions of employment, and these
proposals received real or apparent consideration by management (T-Mobile USA, Inc. v.
NLRB).
• Labor & Employment: The Third Circuit held that former members of a state public
employee union could not immediately halt their dues-paying obligations when their
union membership agreement only allowed them to revoke their dues-paying
commitments, regardless of future membership status, during a specified period each
year. Because the plaintiffs agreed to these dues-paying obligations when they joined the
union, the court distinguished the case from the Supreme Court’s decision in Janus v.
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American Federation of State, County, and Municipal Employees, Council 31, which held
that the First Amendment barred the compelled payment of union dues by public
employees who had not elected to become union members. Joining other circuits, the
Third Circuit held that contract law, not the First Amendment, governs dues-paying
claims arising from a union membership agreement voluntarily entered into by a public-
sector employee (Barlow v. Serv. Emps. Int’l Union Loc. 668).
• Sovereign Immunity: A divided Eithth Circuit allowed a suit to proceed that had been
brought by Missouri against the People’s Republic of China for allegedly hoarding
personal protective equipment (PPE) at the outset of the COVID-19 pandemic. While the
majority held that several COVID-19-related claims brought by the state against China
were barred by the Foreign Sovereign Immunities Act (FSIA), the panel held that the
state’s PPE hoarding claim could proceed under FSIA’s commercial activity exception.
That exception waives a foreign government’s sovereign immunity for “an act outside the
territory of the United States in connection with a commercial activity of the foreign state
…[that] causes a direct effect in the United States.” The majority held the exception
applied here because (1) China engaged in commercial activity when it bought much of
the world’s available PPE, (2) China acted more like a “private player” in the market than
a “sovereign” when purchasing and selling PPE, and (3) China’s anticompetitive actions
directly affected Missouri health care providers, who had to pay higher prices for PPE or
otherwise deal with PPE shortages in ways that the complaint alleges made it difficult to
safely treat COVID-19 patients (Missouri v. People’s Republic of China).
Author Information
Michael John Garcia
Daniel T. Shedd
Deputy Assistant Director/ALD
Legislative Attorney
Congressional Research Service
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