Notice & Comment

D.C. Circuit Review: Reviewed – Should we stay or should we . . . not?

Who would have guessed that the most hotly contested legal issue in the federal courts in the spring of 2025 would be the propriety of an administrative stay? The D.C. Circuit was once again involved in the multitude of challenges to the multitude of President Trump’s executive orders and, once again, the issue was over the propriety of a stay. In March 2025, President Trump issued an Executive Order 14238 directing the United States Agency for Global Media (“USAGM”) to reduce the agency to minimum operating levels. As a result, USAGM terminated grants to three private, non-profit broadcast networks: Radio Free Asia (“RFA”), Middle East Broadcasting Networks (“MBN”), and Radio Free Europe/Radio Liberty (“RFE/RL”). The district court granted preliminary injunctions requiring USAGM to restore the fiscal year 2025 grants. The government appealed and sought stays of those injunctions pending appeal. A divided panel of the D.C. Circuit granted stays of those injunctions pending their appeal, with Judges Katsas and Rao in the majority and Judge Pillard in dissent. In a sign of these times, the networks sought en banc review of those stays.

Sitting en banc, the D.C. Circuit administratively stayed the panel’s stay rulings, Middle East Broadcasting Networks Inc., v. United States, No. 25-5150; Radio Free Asia v. United States, No. 25-5151; RFE/RL, Inc. v. Lake, No. 25-5158, which meant that the USAGM must continue funding these networks pending the appeal of the district court’s preliminary injunctions. Judge Rao wrote a dissent, joined by Judges Henderson, Katsas, and Walker. Judge Katsas also wrote a dissent, joined by Judges Rao and Walker. Both dissents argued that the government was likely to prevail on the merits. Furthermore, in her dissent, Judge Rao argued that the en banc court’s stay went “far beyond preserving the status quo” because it forces the government to pay over $25 million in disputed grants with little time to seek Supreme Court review and little possibility of their future recovery. In his dissent, Judge Katsas argued that the district court lacked jurisdiction because the claims at issue are contract claims against the government, which are reviewable only in the Court of Federal Claims.

The plaintiff in Goodrich v. Bank of America, No. 24-7025, sought to recoup his losses from liquidating his stock portfolio by bringing claims that his wealth advisor and his employer, the Bank of America, had acted with gross negligence, breached their fiduciary duty, and violated the D.C. Securities Act. In an opinion written by Judge Wilkins and joined by Judges Katsas and Childs, the D.C. Circuit affirmed the district court’s grant of summary judgment to the defendants. The court rejected plaintiff’s breach of fiduciary duty claim because he had signed an agreement with the bank that disclaimed all implied duties, which the court held covered any fiduciary obligations. The court agreed with the district court that plaintiff’s concession that the defendants counseled him against liquidating his portfolio barred any claim of gross negligence.  And the court found that plaintiff failed to plausibly plead scienter, a standard of liability which was imported into the D.C. Securities Act from SEC Rule 10b-5(a).

During the first Trump Administration in 2017, the Department of Defense (“DoD”) issued a policy requiring a certain minimum time in service—180 days for active-duty personnel and one year for reservists—before a noncitizen who “served honorably” in the U.S. military could be eligible for an expedited path to naturalization under 8 U.S.C. § 1440. In 2020, six noncitizen service members challenged that policy as arbitrary and capricious and otherwise not in accordance with law under the Administrative Procedure Act. The district court granted summary judgment for plaintiffs and DoD appealed. During the Biden Administration and while the case was on appeal, DoD rescinded the challenged policy and moved to hold its appeal in abeyance while considering changes to the policy’s time-in-service requirement.

In Samma, v. DOD, No. 20-5320, the D.C. Circuit considered whether the case is moot in light of the DoD rescinding the challenged policy. In an opinion written by Judge Henderson and joined by Judge Pan and Senior Judge Randolph, the D.C. Circuit held that the appeal was moot and granted vacatur of the district court’s judgment. The D.C. Circuit reasoned that because DoD rescinded the policy there was no longer a live case or controversy and no order from the Court would “have any meaningful effect on the rights of the parties.” Further, the D.C. Circuit determined that vacatur, which would allow relitigation down the road, was proper because there was no indication that DoD abandoned the policy to sidestep appellate review. Judge Pan authored a concurring opinion that emphasized more emphatically that a straightforward application of U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18 (1994) supports vacatur.