D. C. Circuit Review – Reviewed: Trouble in the Dining Room?
When he was a member of the D. C. Circuit, then-Judge John Roberts commented on a unique feature of the court and a problem that presented: “[A]ll the D. C. Circuit judges are in the same building, along with all the district court judges. This allows the circuit judges the unique opportunity of sitting down to lunch right next to a judge who, moments before, they had announced was guilty of abuse of discretion or clear error. It can make for a very short lunch.” John G. Roberts, Jr., What Makes the D. C. Circuit Different? A Historical View, 92 Va. L. Rev. 375, 376 (2006). Hopefully good will prevails in the dining room this week despite the circuit court’s third reversal of the district court in Elsa Maldonado, et al. v. DC, No. 22-7060, which involves a long-running dispute between Medicaid recipients and the District of Columbia. When pharmacies deny Medicaid recipients coverage for prescription medication, they often do not explain why coverage was denied or how the recipient can appeal that denial. The plaintiffs here allege that the District of Columbia, through its policies, procedures, and practices, failed to provide individualized written notice of denial, violating plaintiffs’ due process rights. The district court had dismissed the case twice before, once for lack of standing and once for failure to state a claim. Both times, the D.C. Circuit reversed. Here, the district court dismissed the case as moot because the District of Columbia issued a memorandum to all pharmacies, requiring them to explain denial of coverage and appeal rights to Medicaid recipients. But, in an opinion by Senior Judge Tatel, joined by Judge Pan and Senior Judge Sentelle, the D.C. Circuit again reversed. The problem, according to the court, was that the plaintiffs challenge not only the District’s policies, but also its procedures and practices leading to actual failure to provide notice. And, here, the uncontested evidence showed that pharmacies are still failing to provide plaintiffs with the information they claim to be entitled to despite the memorandum. Thus, the courts could still grant relief and the case was not moot.
The next three cases pose no threat to lunchtime peace.
Ascension Borgess Hospital, et al. v. Xavier Becerra, No. 21-5246, addressed the reimbursements that hospitals which serve a disproportionate share of low-income patients receive under the Medicare Act, known as “DSH payments.” By statute, the Secretary of the Department of Health and Human Services determines a portion of these payments, known as the “uncompensated care” payment, using a three-factor analysis. HHS has, through notice-and-comment rulemaking, adopted methodology for calculating uncompensated care payments each year. HHS introduced additional data, a particular cost report that each hospital filed, for fiscal year 2020. But, importantly, the Secretary permitted the data from these reports to be updated by Medicare contractors via audits, while the terms of those audits would remain confidential. The hospital plaintiffs sued, arguing that, if the Secretary will rely on audited data, the protocol for those audits must be promulgated through notice-and-comment rulemaking. The district court granted summary judgment for the agency on the grounds that the Affordable Care Act, as amended, barred judicial review of “[a]ny estimate of the Secretary for purposes of determining the factors” used in calculating uncompensated care payments. In an opinion by Senior Judge Rogers, joined by Judge Pillard and Senior Judge Edwards, the D.C. Circuit affirmed, explaining that challenging the data supporting the Secretary’s estimates amounted to a challenge to the estimate itself. It also held, in the alternative, that even if the Secretary’s action was reviewable, the hospital plaintiffs had not established that audit instructions needed to be promulgated through formal rulemaking.
In Broidy Capital Management LLC v. Muzin, No. 22-7082, the D.C. Circuit addressed whether a foreign state that had filed a “Notice of Interest” in the District Court proceedings but never moved to intervene could appeal an order from the District Court. In a lawsuit filed against various political consultants and lobbyists based on actions they took on behalf of Qatar, the non-party State of Qatar filed a “Notice of Interest” in the District Court “for the limited purpose of enabling it to monitor the proceedings to ensure that its sovereignty and immunities [were] respected in any discovery that [was] conducted.” When a discovery order implicated documents that Qatar believed to be protected by international treaty and principles of international comity, Qatar filed an appeal in the D.C. Circuit.
In a published opinion authored by Judge Wilkins, joined by Chief Judge Srinivasan and Judge Rao, the Court of Appeals held that Qatar could not file an appeal under the “well settled” rule that only a “party” may appeal an adverse judgment. Though the label “party” is flexible in certain circumstances, the Court held that Qatar did not qualify because it was not bound by the District Court’s order and had not participated in the trial court under applicable procedural rules. Instead, Qatar had acted as an amicus curiae. The Court further held that Qatar could have filed a motion for a “limited” intervention, see Fed. R. Civ. P. 24, without sacrificing the sovereign immunity it enjoys under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1602-1611. The Court remanded with instructions to the District Court to provide Qatar the opportunity to timely intervene or file an appropriate motion.
Julie Beberman v. Antony Blinken, No. 21-5140, involved a straightforward mootness dismissal by Judge Walker, joined by Judge Rao and Senior Judge Randolph. The underlying dispute was between Beberman, a former Foreign Service employee, and the Foreign Service itself. By statute, the Foreign Service hires “career candidates” for a limited term. If they are not offered a permanent position, known as “tenure,” within five years, they must leave the Service. Decisionmakers within the Foreign Service denied Beberman’s tenure and recommended that she separate from the Service. Beberman appealed the decision to the Foreign Service Grievance Board and requested “interim relief” while her appeals were underway, which would prevent her “involuntary separation” from the Service. But the Grievance Board denied all of Beberman’s requests, so she left the Service while her appeals were pending. Without waiting for the Foreign Service appeal process to conclude, Beberman sued in federal district court, challenging how the Board handled her requests for interim relief. The district court dismissed her suit and Beberman appealed to the D.C. Circuit. But while that appeal was pending, the Grievance Board reached final decisions on her grievances, mooting the case. Because Beberman’s appeal was resolved, there was no longer any place for interim relief. That left her claim for back pay, but the court held that back pay is not an available remedy when seeking judicial review of Grievance Board orders. Thus, that claim could not keep her case alive.
Finally, the NLRB changing its view of a case midstream to align with signals from the D. C. Circuit? A welcome development (at least from the viewpoint of this biased observer.) International Brotherhood of Boilermakers v. National Labor Relations Board, No. 21-1209, raised the question whether the Hawaiian Dredging Company had committed an unfair labor practice under the National Labor Relations Act by discharging union welders after the “prehire agreement”—a type of collective bargaining agreement—between the company and the union expired. At first, the National Labor Relations Board (NLRB) agreed with the union that the discharge was motivated by anti-union discrimination, but after the D.C. Circuit granted Hawaiian Dredging’s petition for review and remanded for further consideration, the NLRB changed its view. The NLRB found that Hawaiian Dredging discharged the union welders based on a neutral policy of performing craft work only with a prehire agreement in place; that this policy was a legitimate business practice; and that Hawaiian Dredging did not act with an anti-union motive. The union sought review in the D.C. Circuit. In an opinion authored by Judge Walker, joined by Judges Millett and Katsas, the court held that the NLRB’s decision correctly applied the law and was supported by substantial evidence.