Notice & Comment

D.C. Circuit Review – Reviewed: Summertime, and the Court is Busy

After a busy week last week—when the Court released ten cases—there was some speculation that the Court might take it easy this week. Not quite. The Court released nine more opinions, including seven administrative law cases, one of which involves a second-round loss for an agency.

Two of the cases were direct criminal appeals. First, in United States v. Brynee Baylor, Judge Srinivasan, joined by Judge Pillard and Senior Judge Randolph, rejected the defendant’s argument that the district court had a duty to sua sponte grant a new trial after the prosecution made improper statements before the jury. Second, in United States v. Abou-Khatwa, Judge Millett, joined by Chief Judge Srinivasan and Judge Wilkins, affirmed Abou-Khatwa’s sentence and convictions for multiple counts of fraud and identity theft, explaining that it “was not a close case.”

On the administrative law front, the Court also decided two FERC cases. First. in Entergy Arkansas, LLC, et al. v. FERC, Judge Wilkins wrote an opinion on behalf of Judge Rogers and Senior Judge Silberman, affirming FERC’s denial of a utility company’s plans to change the rates it charged its customers based on recent improvement projects. FERC had twice rejected the plans, finding that they did not allocate costs among customers commensurate with the benefits. The Court affirmed FERC’s orders, holding that it was “particularly deferential to [FERC’s] expertise with respect to ratemaking issues.”

Second, in Cherokee County Cogeneration Partners v. FERC, the Court denied petitions for review challenging a FERC order. In an opinion written by Senior Judge Silberman and joined by Judges Wilkins and Rao, the Court found that it lacked authority to hear the Petitioner’s arguments because the Petitioner failed to preserve them before the agency.

The five remaining cases ran the gambit of administrative law.

In Ramsingh v. TSA, the D.C. Circuit denied Ramsingh’s petition for review of a civil penalty the Transportation Security Administration imposed against him for interfering with screeners during a TSA checkpoint screening. The penalty was first upheld by an Administrative Law Judge and affirmed by the TSA on administrative appeal. The Court, in an opinion written by Judge Millett (joined by Judge Rogers and Judge Katsas), held that the agency’s conclusion was supported by substantial evidence and was adequately reasoned.

In Transportation Division of the Internal Association of Sheet Metal, Air, Rail & Transportation Workers v. FRA, unions petitioned for review of the Federal Railroad Administration’s Final Rule revising regulations governing freight railroad safety. The case was argued before Judges Millett, who wrote the opinion, Judge Wilkins, who joined it, and then-Judge Jackson, who did not participate in the opinion. The Court denied all but one of the unions’ arguments, ruling that the FRA did not reasonably address safety concerns for end-of-train devices. It remanded for the agency to conduct that analysis and denied or dismissed of the rest of the unions’ claims.

In National Association of Broadcasters v. FCC, the Court vacated part of an FCC order requiring that radio broadcasters check two federal sources to verify a sponsor’s identity before leasing airtime to it. The FCC issued the order in 2021 in response to concerns that foreign governments (particularly Russia and China) were leasing airtime to broadcast propaganda on American radio. Judge Walker, joined by Judge Pillard and Judge Randolph, noted first that Congress requires a broadcaster only to “exercise reasonable diligence” to obtain information from “its employees, and other persons with whom it deals directly,” which imposes a duty of inquiry that does not make broadcasters responsible for the truth of the information they obtain. The Court held that the FCC’s order, by contrast, imposed a duty of investigation by forcing broadcasters to check two federal sources, effectively altering Congress’s choice.

Senior Judge Tatel wrote the opinion in Shapiro v. United States, which Judges Wilkins and Rao joined, largely affirming the district court’s finding that the FBI had adequately disclosed all of the necessary information in response to repeated FOIA requests. Dr. Shapiro, an animal rights activist, submitted hundreds of FOIA requests related to animal rights activism—at one point becoming the FBI’s most prolific requestor. Eighty-three of those requests led to four lawsuits, which the district court consolidated.

On appeal, the Court ruled that, for the most part, the FBI’s search was adequate. The FBI has two types of databases: databases that contain the actual information (recordings, transcripts, etc.) and a database that serves as an index for the other databases. The index database acts like a library card catalogue by tracking the type of information contained in each file in the other databases without requiring the user to review the entirety of each recording or transcript to determine what is contained within it. The FBI conducted a full search of its index database (but not the databases with content in them) and that, according to the Court, was an adequate review of its records.

Finally, the Court issued a second-round loss to an administrative agency. As my colleague discussed last week, even when a party wins a first round against an agency, the agency often wins in the second round, making a full victory against an agency more difficult. This week, though, an agency lost in round two. In American Clinical Laboratory Association v. Xavier Becerra, the Court considered for the second time litigation brought by the American Clinical Laboratory Association (ACLA) against the Department of Health and Human Services, challenging a 2016 rule governing Medicare-related reporting. On remand from the first appeal, the district court ruled that the case was moot because HHS had issued a new rule in 2018.

In an opinion written by Judge Wilkins and joined by Judge Millett (then-Judge Jackson was part of the panel when the case was argued but did not participate in the opinion), the Court held that the case was not moot because HHS expressly left open the possibility of returning to the 2016 rule. The Court also held that the 2016 rule was arbitrary and capricious because HHS, without explanation, exempted many hospitals and laboratories from the reporting requirements, even though it had determined that the rule should capture data from them. Thus, the Court took the extra step to reach the merits, and it still ruled against the agency.   Perhaps that exception proves the rule.

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