D.C. Circuit Review – Reviewed: Old Questions and New Pipelines
Last week brought three new opinions from the D.C. Circuit and one revised opinion.
Two of the new opinions deal with administrative law, so let’s start there:
First up is Crowley Government Services, Inc. v. GSA, which involves one of the first things I learned about as a baby lawyer at the Federal Programs Branch of DOJ: the Tucker Act versus the APA. The Tucker Act gives the U.S. Court of Federal Claims jurisdiction over breach of contract claims against the United States seeking more than $10,000. Courts have interpreted that statute as impliedly forbidding contract claims against the government from being brought in district court under the waiver of sovereign immunity in the APA (which does not allow for damages). Whenever a case against a U.S. agency looks like it is seeking damages rather than declaratory or injunctive relief, the government will invoke the Tucker Act and argue that the case does not belong in district court.
Here, Crowley contracted with the U.S. Transportation Command (TRANSCOM) to provide various shipping services for DoD. GSA decided it had authority to audit Crowley’s bills and withheld certain payments it didn’t think were authorized. Crowley sued TRANSCOM in the Court of Federal Claims under the Tucker Act seeking the money it was owed. Crowley then also sued GSA in district court under the APA, alleging that the audit exceeded GSA’s statutory authority under the Transportation Act and the Contract Disputes Act. GSA moved to dismiss for lack of jurisdiction, claiming that the suit was a contract dispute that belongs in the Court of Federal Claims. The district court agreed with GSA that the suit was “in essence” a contract claim and dismissed the case.
The D.C. Circuit disagreed. When determining whether a suit is a contract claim, the court considers the source of the right and the type of relief sought. Here, the court determined that the source of the right is the Transportation Act and the Contract Disputes Act, and the claims under those statutes sound more in tort than in contract (like tortious interference with contractual relations). As for the type of relief sought, Crowley requested declaratory and injunctive relief—not specific performance or damages. The fact that the granting of the requested relief would lead to a future monetary award was insufficient to convert the claim into one for damages. The court thus reversed the district court’s ruling and remanded to allow the case to proceed.
Next, we have Sierra Club v. FERC, in which the petitioners sought to vacate FERC’s order allowing the construction of a natural gas pipeline that would extend an existing (though not yet completed) pipeline that terminated in Virginia, to reach facilities in North Carolina. FERC has to approve new pipelines or extensions of existing pipelines, in a process that requires setting a rate the pipeline can charge and conducting an environmental impact analysis.
FERC approved higher-than-normal rates for the pipeline, because it concluded the project’s capital funding outlook more closely resembled a new pipeline (i.e., a risker investment) than an extension of an operational one. FERC also assessed the project’s environmental impact and concluded that the environmental impact statement had noted various practices that would mitigate adverse effects. The Sierra Club filed a petition for review, arguing that FERC acted arbitrarily and capriciously in setting the rates and in analyzing the environmental impact.
The D.C. Circuit rejected both challenges. As for the rates, the court held that the agency does not have to assess market conditions and empirical data, but can reason based on previous rates for market entrants. The court also concluded that FERC did not err in treating the project as a new pipeline rather than an extension of existing pipeline. The court rejected petitioners’ proposed “formalist” approach and held that FERC could analyze the pipeline functionally. Because the existing pipeline is incomplete and does not have a track record or revenue streams, it was reasonable for FERC to treat the extension as a new pipeline.
On the environmental impact statement, petitioners argued that FERC failed to take a “hard look” at the environmental consequences of the project. But the court held that the agency adequately addressed the issues petitioner raised, and noted that FERC is not required to formulate a specific mitigation plan—it need only discuss mitigation to ensure that environmental consequences have been “fairly evaluated.” FERC also adequately considered the cumulative impact of the pipeline on aquatic resources in the affected area and drew reasonable conclusions—particularly in light of the court’s deference to FERC’s technical and scientific expertise.
Our non-admin case for the week is United States v. Reynoso, in which the most significant issue was already decided by the Supreme Court. Mr. Reynoso was convicted of two drug charges and being a felon in possession of a firearm. He was sentenced the day that the Supreme Court decided Rehaif v. United States, which held that the government must show that the defendant knew he possessed a gun and also knew that he had previously been convicted of a crime punishable by more than one year of imprisonment. Mr. Reynoso contended that his felon-in-possession conviction must be overturned because the government failed to make the latter showing. But Mr. Reynoso didn’t raise that argument before the district court, meaning that plain-error review applies. And unfortunately for Mr. Reynoso, the Supreme Court then decided Greer v. United States, which held that Rehaif errors normally will not qualify as plain errors because felons ordinarily know that they are felons, so the knowledge requirement will not usually affect the outcome of the trial. The D.C. Circuit concluded this was not one of the unusual circumstances in which the error would have made a difference, and also rejected the remainder of Mr. Reynoso’s challenges to his conviction.
And finally, we have a revised opinion in United States v. Hillie, and some statements involving those revisions in an order denying a petition for rehearing for en banc. As recapped by Hayley, that case involved a child-pornography conviction and the majority and dissent disagreed as to the definition of “lascivious exhibition” in the statute. Judge Wilkins—who drafted the majority opinion—issued a statement concurring in the denial of en banc rehearing, noting that he found some merit in Judge Katsas’s criticism that “the panel opinion could be read to have inadvertently narrowed the statutory language beyond its plain and ordinary meaning.” Judge Wilkins and Judge Rogers thus granted panel rehearing to clarify their views. In Judge Katsas’s opinion concurring in the denial of en banc rehearing, he expressly states that he “originally voted to grant en banc review” despite his agreement with the result the panel reached, but the changes apparently addressed his concerns. An interesting look at the behind-the-scenes of en banc voting at the D.C. Circuit!