Notice & Comment

D.C. Circuit Review – Reviewed: Last Thoughts (For Now) on “Company A” by Aaron Nielson

This has been a quiet week at the D.C. Circuit. There was only one published opinion—and it’s about attorneys’ fees. So with this extra time, why not think a little bit more about Amtrak? (Or, if you would rather spend your “five minutes a week” on something else, enjoy this or this instead.)

Dan Hemel’s latest Amtrak post, like his original one, makes excellent points. In fact, I agree with almost everything he says: “If Congress authorizes A to regulate B and C but the CEO of A is not appointed by the President,” “then we have an Appointments Clause problem. If the President can’t fire A’s CEO, then we have a removability problem. And if A requisitions goods from B and C without just compensation, then we have a Takings Clause problem.” Indeed, such thorny constitutional problems prompted the Supreme Court’s remand. I also agree that “Amtrak, according to the panel, ‘stands in stark contrast’ to ‘more traditional governmental entities that are decidedly not self-interested.’”*

I start to part company with Dan, however, when he makes this observation: “But what the D.C. Circuit calls ‘Amtrak’s self-interest’ is what Congress thinks is in the public interest.” In a sense, of course, that’s right. Yet what’s missing is any discussion of precedent. Whatever one thinks of the distinction, the D.C. Circuit is not the first court to draw a line between self interest and public interest when it comes to due process and market competition. The Supreme Court did it first.

In particular, Carter Coal holds that giving regulatory power to a competitor violates due process because—quoting the Supreme Court—a competitor, unlike an “official or an official body,” is not even “presumptively disinterested.” Now maybe Carter Coal is wrong; Justice Breyer seems to thinks so and maybe Mike Greve does too. Perhaps, in reality, as a matter of “the due process clause of the Fifth Amendment” (the Supreme Court’s words), it is not contrary to “the very nature of things” (more of the Supreme Court’s words) to allow a competitor to regulate its competition. As an academic exercise, it is fair to question Carter Coal. But as a judicial exercise, Carter Coal says what it says. It’s not like the D.C. Circuit is making this up.

And then we come to the arbitrator. If it is true that (1) the metrics and standards are regulatory (as Justice Kagan suggested at oral argument, i.e., this scheme “seems kind of regulatory”), (2) the Surface Transportation Board cannot undo the arbitrator’s “binding” decision (as the United States agreed at oral argument, i.e., “So if the STB doesn’t like the arbitrator’s decision, can the STB change it under the law?” “I doubt it because it’s supposed to be a binding arbitration”), and (3) the fact that the arbitration provision was not invoked is irrelevant (as the Supreme Court seemingly held in analogous circumstances, i.e., “[w]e have no trouble concluding, however, that a challenge to the Board of Review’s veto power is ripe even if the veto power has not been exercised”), then the United States may have a problem under Edmond v. United States. After all, quoting the Chief Justice from oral argument, “which principal officer supervises him?” The arbitrator, under these assumptions, would unilaterally set policy for the railroad industry. Isn’t regulating an entire industry what principal officers are for? Again, to be sure, the United States has arguments here too. But boy it is a strange scheme.

Anyway, it will be interesting to see what the D.C. Circuit does with this case. Last time it denied rehearing en banc. If the case were to go en banc this time, (senior) Judges Williams and Sentelle could participate. Would Chief Judge Garland? Presumably not. (Something else to think about: Chief Judge Garland participated in the en banc vote last time. Does that mean he would be recused at the Supreme Court if he were to become Justice Garland? I’m not sure, but it appears that Justice Sotomayor recused herself in analogous circumstances.)

And now with Amtrak done, let’s discuss attorneys’ fees. In Radtke v. Caschetta, Judge Brown—joined by Judge Pillard (with Chief Judge Garland sitting out)—concluded that “the lower court’s clear factual error requires us to vacate the judgment and remand for reassessment of reasonable attorney’s fees.” The facts of this case were discussed last year by the Court. Long story short, Kathy Radtke and Carmen Cunningham sued their employer for failure to pay overtime. They sought approximately $90,000 but the jury only awarded them $5,844.29. Even so, as was their right, they sought attorneys’ fees to the tune of $255,898.80. The district court, however, concluded that only $56,474.70 was reasonable. The employer appealed because, it said, the fee petition was late. The employees appealed because, they said, they should have received more money in fees. The panel concluded that the fee petition was not late, even though it was filed more than 15 days after judgment, because after the petition was filed, the district court entered an amended judgment, which triggered a new filing period. (The employees did not renew their earlier petition in response to the amended judgment, but the D.C. Circuit held that was fine.) As to the amount of fees, the Court concluded that the trial court was wrong to say that the employees were “dilatory” in providing a damages estimate.

Phew. That’s a lot of law. The week is over; reward yourself with this.

* According to the Railroads, “[h]istoric practice is a touchstone for due process, see Honda Motor Co. v. Oberg, 512 U.S. 415, 430 (1994), and the Government has never identified a similar statute—one that vests a federally-chartered, for-profit corporation with regulatory authority over other companies in the same industry.”

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