(The following post is by our new contributor, Alexis Abboud, who does not yet have login credentials).

It was a busy week at the D.C. Circuit last week! The court issued eight administrative-law-related opinions across a range of domains plus a contracts case wearing administrative-law clothing, so it’s a longer post. I’ve tried my best to keep the prose moving, but it’s my first appearance on the D.C. Circuit Review so be gentle in your reviews.

Radio, Someone Still Loves You

In our first case, Public Safety Spectrum Alliance v. FCC, the court reviewed a Radio Ga Ga FCC order aiming to repurpose the chronically underused 4.9 GHz public-safety radio frequency. The order prospectively authorizes a yet-to-be-named “Band Manager”—the potential for music puns just never ends—to transfer unused spectrum to FirstNet, a federal entity behind an existing public-safety network in the 700MHz band. Two groups of petitioners came in on different wavelengths: current 4.9 GHz licensees argued that the order trampled incumbents’ rights and exceeded the FCC’s authority, while first-responder organizations argued that the FCC did not go far enough in revamping the underutilized frequency.

The court dismissed the first responders’ petition for lack of standing. On the merits, the order cleared arbitrary-and-capricious review, the FCC having adequately weighed incumbents’ reliance interests and the consequences of the transfer. The court hit static only on the question whether the order infringed the authority of the National Telecommunications and Information Administration (NTIA), the Commerce Department component charged with authorizing federal spectrum use. Petitioners argued the NTIA—“strangely silent” throughout the litigation—would have to authorize any federal use of the spectrum. The court found this persuasive but left the issue unresolved as unripe given no spectrum has yet been transferred.

Bending the NEPA

The court then denied two different petitions for review under the National Environmental Policy Act (NEPA), demonstrating the while agencies may no longer receive deference on legal determinations, factual determinations are another matter.

In Beyond Nuclear, Inc. v. NRC, the court reviewed a challenge to the NRC’s 2024 revision of its Generic Environmental Impact Statement, which downgraded to “small” the environmental impacts of “severe accidents”—reactor core damage followed by a radioactive release. Emphasizing that under the Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County NEPA is a purely procedural statute, the court applied a highly deferential standard to the NRC’s fact-dependent, context-specific, and policy-laden choices about the depth and breadth of its environmental analysis.

Applying that deference, the court held that the NRC reasonably declined to build aging-related failure rates or climate-driven storm effects into its analysis, crediting the Commission’s technical judgments and its factor-of-100-plus margin of conservatism.

The court doubled down on deference in Save the Sound, Inc. v. FAA. Indeed, “the bedrock principal of judicial review in NEPA cases,” the court wrote, “can be stated in a word: Deference.” Reviewing the FAA’s approval of a runway extension and new terminal at Tweed New Haven Airport, the court deferred broadly to the agency’s factual and technical determinations, including whether the project would increase enplanements or reduce net emissions. (Enplanement, for those who don’t know, is a fancy word for a passenger boarding a flight). The court denied the petition, declining to override the FAA’s informed discretion, and concluded that “the era of searching NEPA review is over.”

Our Old Friends, FERC & NLRB

No D.C. Circuit Review is complete without a FERC and an NLRB decision, and this week delivered both. In American Whitewater v. FERC, the court vacated a FERC order denying a non-profit’s bid intervene out of time in the license-surrender proceeding for the Niangua Hydroelectric Project in Missouri. And in Hospital Menonita de Guayama, Inc. v. NLRB, on remand from the Supreme Court, the court applied Loper Bright to hold that the NLRB’s rule compelling new business owners to bargain with incumbent unions for up to a year even when those unions no longer have majority support fell outside the NLRB’s statutory authority under the National Labor Relations Act. The court remanded over a dissent by Senior Judge Randolph, who argued that the original panel had not relied on Chevron deference to uphold the rule so Loper Bright gave the court no basis to revisit the decision.

A Mixed Bag

Sadly, our final three cases don’t lend themselves to any further jokes. In the first,Thrivent Financial for Lutherans v. SEC, the court held that the SEC’s three-paragraph letter denying a rulemaking petition was arbitrary and capricious, and remanded to the agency for reconsideration. Thrivent Financial, which sells a range of insurance products, had petitioned the Commission to amend FINRA’s arbitral code so it could use its own arbitral program.

Then in Novartis Pharmaceuticals Corp. v. Kennedy the court affirmed summary judgment for the Secretary of Health and Human Services on rebate-based drug pricing. Four drug manufacturers wanted to launch rebate programs without the Secretary’s approval, arguing that the Public Health Service Act permits unilateral imposition of such programs barring express disapproval. The court didn’t buy it.

And finally, Adsync Technologies, Inc. v. FAA, an opinion filed under seal. The FAA’s long-time contractor protested the FAA’s award of a contract to a competitor. According to Jenner & Block, counsel for the competitor, the D.C. Circuit left the contract in place. More than that, I cannot say.

Contracts in Administrative-Law Clothing

Our final case—Fairholme Funds, Inc v. FHFA—is not a classic administrative law case but instead casts an administrative agency as a contractual counterparty and asks what obligations come with that role. In 2008, with the housing market on fire (the bad kind), Congress placed Fannie Mae and Freddie Mac in the conservatorship of the Federal Housing Finance Agency (FHFA). In the aftermath, the Treasury Department agrees to pump cash into both companies in exchange for fixed-rate quarterly dividends. No one’s thrilled, but the market stabilizes. Then, in 2012, the FHFA announces the Net Worth Sweep, under which Fannie and Freddie must pay the Treasury a quarterly dividend equal to the amount their net worth exceeds their capital reserve, foreclosing any return for legacy shareholders. Share values nosedived $1.6 billion in a single day, the shareholders sued, and a decade later a jury found the FHFA had breached the implied covenant of good faith and fair dealing in its contract with the shareholders and awarded damages of $812 million.

On appeal, the most interesting of the FHRA’s arguments was that, given its statutory discretion, there was no contractual gap for the implied covenant to fill. The FHRA maintained that the Housing and Economic Recovery Act of 2008 gives it broad authority to act “in the best interests of the regulated entity or [of] the Agency,” which it recast as a contractual right to act with discretion. In its view, the implied-covenant claim failed because such claims cannot rest on conduct the contract authorizes. The court disagreed: a party granted discretion can still breach the implied covenant by exercising that discretion unreasonably. Indeed, the court continued, the more discretion a contracting party has, the more reason for the implied covenant to apply.  

Fairholme is an interesting entry into the growing body of law at the intersection between private contract law and public administrative law, highlighting how statutory grants of power built for public-law contexts can be transformed in private-law ones. No doubt the breadth of power granted to the FHRA in the Recovery Act was meant to eliminate friction. Here it became a source of it.