The D.C. Circuit issued nine opinions this week, six of which concern administrative law or related topics.
Beginning with the traditional administrative law cases, Bloomberg v. SEC concerns FINRA’s proposal to create a centralized service that provides bond-market participants core reference data for new issues of corporate bonds. SEC approved the proposal, and Bloomberg—a private data vendor—petitioned for review. The Court (Judge Wilkins, joined by Judge Katsas*) rejected most of Bloomberg’s arguments but agreed with one. FINRA’s proposal contained no analysis of the costs of creating and maintaining its data service or whether FINRA would pass those costs on to market participants. FINRA instead proposed to address these questions in a future fee proposal. SEC “brushed aside” Bloomberg’s concerns about costs by noting that it could suspend or disapprove the forthcoming fee proposal if it reflected unreasonably high costs. The Court agreed with Bloomberg that SEC failed adequately to respond to Bloomberg’s concerns and that its decision was therefore arbitrary and capricious:
The Court then remanded without vacating to allow SEC and FINRA to move forward with FINRA’s proposal while SEC considers Bloomberg’s cost concerns. This raises the question: what happens if FINRA has “already incurred the financial burden of building the service” by the time SEC gets around to considering Bloomberg’s objections?
Coalition of MISO Transmission Customers v. FERC and LSP Transmission Holdings II v. FERC are related and were issued by the same panel (Judges Rogers, Millett, and Pillard). Each opinion resolves a bundle of consolidated petitions that challenge a regional transmission organization’s cost-allocation methods in light of Commission Order No. 1000. Order No. 1000 requires transmission providers to use competitive bidding to select developers for new transmission projects when the regional transmission organization (“RTO”) allocates costs for those projects regionally, but not when the RTO allocates those costs locally. Under FERC’s cost-causation principle, RTOs must allocate costs regionally when the projects that produce the costs provide regional benefits.
The RTO in these cases—Midcontinent Independent System Operator, Inc. (“MISO”)—allocates costs locally for certain categories of projects, effectively preventing petitioner LSP Transmission Holdings and/or its affiliates (“LSP”) from competing for contracts to develop projects in those categories. According to LSP, MISO’s cost allocation decisions were inappropriate because at least some projects within the relevant categories provided or will provide regional benefits. LSP also challenged MISO’s proposal to exempt urgent projects from the competitive bidding process.
Faithful readers may notice some repetition. Professor Davis profiled a similar Order No. 1000 challenge—incidentally, also captioned LSP Transmission Holdings II v. FERC—in March. And just last week, Professor Nielson discussed yet another case involving the same RTO, MISO.
On the merits, the panel applied deferential arbitrary and capricious review to hold that FERC properly upheld MISO’s cost-allocation methodologies. But both opinions sound notes of caution about the risk of over-classifying projects for local cost-allocation or competitive-bidding exemptions. One opinion even welcomes as-applied challenges to MISO’s cost allocation on specific projects. Both opinions expand upon the Circuit’s ubiquitous cost-causation precedent, Old Dominion, so practitioners in this area should take note.
Judge Rogers wrote a single separate opinion for both sets of cases, concurring in part and dissenting in part. The issue in dispute was LSP’s standing. Under Ne. Fla. Chapter of Associated Gen. Contractors v. City of Jacksonville, bidders excluded from or disadvantaged in a competitive bidding process need not show that they would win the bidding in order to challenge the policy that excludes or disadvantages them. Rather, they must show that they are “ready, willing and able to perform” the work and that the challenged policy “deprived [them] of the opportunity to compete” for the work. Judge Rogers’ division from the rest of the panel concerned not the substance of this test but the procedure by which it was applied in this case. According to Judge Rogers, the panel improperly invited LSP to supplement the record on standing after it had failed to meet its burden to establish standing in its petitions for review. She agreed, however, that LSP’s supplemental materials established its standing.
The designation of her opinion as a concurrence-in-part and a dissent-in-part is curious. On the one hand, if Judge Rogers found LSP’s failure to meet its burden at the petition stage to be dispositive, one would expect her to dissent in full and vote for a dismissal for want of jurisdiction. She apparently concluded that LSP’s failure was not dispositive, however, as she agreed with the majority that the Court had jurisdiction to resolve the petitions. From what part of the disposition of the petitions, as opposed to the supporting reasoning or the earlier supplementation order, does Judge Rogers dissent?
In Citizens for Responsibility and Ethics in Washington v. DOJ, party presentation had an important role to play in the release of an internal DOJ memorandum concerning the Meuller investigation. Special Counsel Robert Meuller’s report at the end of the investigation detailed, among other things, his investigation into whether President Trump had obstructed justice. Meuller reported that he was unable to determine conclusively that no criminal conduct had occurred. Before the Meuller Report became public, Attorney General Barr’s advisers prepared a memorandum addressing (1) whether the Attorney General should reach a judgment on whether the evidence in the report supported an obstruction of justice prosecution, and (2) what that conclusion should be. Attorney General Barr accepted the memorandum’s recommendation that he reach a judgment, and he reported his judgment that the evidence did not support prosecution in his letter transmitting the Report to Congress.
In response to a FOIA request by Citizens for Responsibility and Ethics in Washington (“CREW”), the Department withheld the memorandum prepared by Attorney General Barr’s advisers under the deliberative process privilege. The deliberative process privilege protects from disclosure records that reflect an agency’s deliberations in advance of a decision.
The Court (Judge Srinivasan, joined by Judges Rogers and Tatel) agreed with the district court that the Department had not carried its burden to invoke the deliberative process privilege. It therefore affirmed the district court’s grant of summary judgment to CREW on CREW’s FOIA claim.
“Assessing whether a record is pre-decisional or deliberative necessarily requires identifying the decision . . . to which the record pertains.” The Court concluded that the Department had argued below that the decision to which the memorandum related was the decision whether to charge President Trump with obstruction of justice. In fact, the memorandum reflected deliberations on a different decision: what Attorney General Barr should communicate to Congress and to the public about his reading of the evidence in the Meuller Report.
The Court acknowledged that the memorandum may well have been privileged. But the government’s failure to describe the decision accurately was fatal; the Court declined to give it a second chance.
One thing puzzles me: the district court also ruled against the Government on the ground (not reached by the panel) that the memorandum was not pre-decisional. Although Attorney General Barr reviewed an advanced draft of the memorandum before he sent the letter to Congress, the Department did not finalize the memorandum until a few hours later. Does this holding not reflect a shared understanding that the decision at issue was what to say in the letter to Congress?
All of my puzzling aside, the moral of this week’s administrative law decisions is clear: Whether the question is costs, standing, or the decision to which a deliberative record relates, one may come to regret things left unsaid.
The final two decisions I will summarize are not about administrative law, but they are about laws that apply to administrators.
In Guffey v. Mauskopf, the Court (Judge Walker, joined by Judge Edwards) held unconstitutional provisions of the code of conduct of the Administrative Office of the United States Courts that prohibit its employees from engaging in partisan political expression outside of the office. Although recognizing that the government’s unique interests in its employees’ conduct allows it to regulate their speech in ways that it could not regulate the general public, it concluded that the Administrative Office had not carried its heavy burden to prove a that the regulated political activity threatens its operations. Judge Henderson dissented, relying on the Supreme Court’s decision in Williams-Yulee v. Florida Bar to hold that the Administrative Office had carried its burden.
Two items of note: First, the majority revised the district court’s blanket injunction to prohibit enforcement of the code of conduct only against the plaintiffs. The Court explains its reasons for tailoring the remedy well. The opinion is worth a read for that reason alone.
Second, both majority and dissent employ the sort of interest balancing that the Supreme Court recently rejected for the Second Amendment in NYSRPA v. Bruen. What does the Supreme Court’s decision bode for interest-balancing under the First Amendment?
Finally, in Fraternal Order of Police v. District of Columbia, the Court rejected a police union’s challenge to a District of Columbia statute that eliminates the right of D.C. police officers to bargain over procedures for disciplining individual officers. Although the legal questions do not appear to have been close in this case, the opinion (Judge Katsas, joined by Judges Rogers and Millett) makes for interesting reading for students of constitutional law. It marches briskly through legal doctrine concerning the Equal Protection Clause and the Due Process Clause, as well as two less familiar clauses: the Bill of Attainder Clause and the Contract Clause.
* Then-Judge, now Justice, Jackson was a member of the panel at argument but did not participate in the opinion.
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