Notice & Comment

D.C. Circuit Review – Reviewed: Reopening and congressional ratification

The D.C. Circuit decided two cases last week, National Association of Realtors v. United States, and Hikvision USA, Inc. v. FCC.

In National Association of Realtors, appellee—a trade association for the real-estate industry—sought to set aside a subpoena issued by DOJ’s Antitrust Division after the Division closed and then reopened an investigation into some of NAR’s policies and procedures.  The Division sent a letter to NAR’s counsel closing the investigation and stating that petitioner had no obligation to respond to certain subpoenas, but then reopened the investigation and issued more subpoenas.  Appellee sued, claiming that the closing letter was a binding agreement that barred the government from reopening the investigation.  The majority (Henderson, Pan) held that the fact that the letter closed the investigation never foreclosed the Division’s ability to reopen the investigation, and it found further support in (among other things) the canon that ambiguous terms should not be construed to convey or surrender a “sovereign power.”  Op. 12.  In dissent, Judge Walker argued that—in context—a letter promising to close an investigation implicitly carried with it a promise that it would not be reopened, and the dissent includes a series of colorful analogies making the point.  Dissent 7-9.

In Hikvision, petitioners were Chinese-owned companies that challenged an FCC order banning use of some of their products for “physical security surveillance of critical infrastructure.”  Op. 2.  The FCC had placed petitioners’ products on a list of banned “covered” equipment.  Op. 7-8.  Petitioners challenged both their inclusion on the list and the scope of the ban on use, and the panel (Millett, Pan, Randolph) rejected the first argument and accepted the second.  As to the first argument, the panel concluded that Congress had “ratified the composition of the list” by ordering the FCC to “adopt rules pursuant to” the FCC’s notice of proposed rulemaking that listed the covered equipment.  See Op. 13-14.  As to the second argument, the panel concluded that the ban of use in “critical infrastructure” was unjustifiably broad because the definition extended to “systems or assets” that are “connected to” other critical infrastructure.  Op. 20-21.  The panel pointed out that the agency’s theory could make “coffee shops, residential apartment buildings, used car lots, and dry-cleaning stores” to be “critical infrastructure.”  Op. 21.  Accordingly, the panel vacated the portions of the order defining critical infrastructure but otherwise denied the petition for review.

Print Friendly, PDF & Email