​D.C. Circuit Review – Reviewed: Why does the Supreme Court’s Term End in June?

by Aaron Nielson — Sunday, July 3, 2016@Aaron_L_Nielson

June has come to an end, the Justices have dispersed, and once more, in the words of a young John Roberts, “the Constitution is safe for the summer.” Every year, the Supreme Court rushes to finish up its work before the Fourth of July. And then the Justices are off to Austria, Malta, Arkansas, Italy, or the like until they reconvene in the fall. Indeed, when it comes to the Supreme Court, the schedule is simple: Everything ends in June.

And that’s a problem. Look, I’m all for tradition. Nor do I begrudge the Justices a holiday—even a very long holiday. (“Only Supreme Court justices and schoolchildren are expected to and do take the entire summer off.”) And deadlines serve a purpose; if nothing else, they focus the mind. The problem, however, is that sometimes in the Court’s dash to finish everything, the work may suffer. Although it may be apocryphal, for instance, I’ve heard that one of the first things that a certain Justice, now long deceased, would do when reading an opinion from his own court was look at the decision date. If it was from late in the term, he would give it a bit less stare decisis weight! After all, as June winds down, a lot of opinions are circulating. Sloppiness may slip through the cracks.*

The D.C. Circuit does it better. Like the Supreme Court, the D.C. Circuit stops hearing oral argument in the spring. And like the Supreme Court, the D.C. Circuit starts hearing cases again in the fall. But unlike the Supreme Court, the D.C. Circuit does not impose an artificial deadline to get all opinions out by the end of June. The D.C. Circuit takes its time. That is the better process.

This week the D.C. Circuit has ten opinions—and most of them are very complicated. And there will be more opinion next week. And then again, and then again, and then again (and sure enough, then again). That’s how the D.C. Circuit works.

With ten opinions to review, let’s jump in. A warning, however: This week, the more complicated the case, the less nuanced my explanation. To really understand all of these cases would take you much longer than the promised “five minutes a week.” Something has to give.

First, let’s start with a pair of FERC cases: Sierra Club v. FERC—the “Sabine Pass” case—and Sierra Club v. FERC—the “Freeport” case. Both were heard by the same panel of Judges Rogers, Griffith, and Millett. These cases concern liquefied natural gas terminals and NEPA. In both, the panel found standing but rejected the claims on the merits. The more interesting of the two is the Freeport case. (The Sabine Pass case, authored by Judge Rogers, explicitly tracks the analysis of the Freeport case in many respects; plus it finds a lack of administrative exhaustion.) In the Freeport case, Judge Millett covers a lot of natural gas law. If this is your field, give it a read. Frankly, I’m not quite sure how to begin summarizing this one. Here is a taste: “[T]he Commission was not obligated to consider those effects of the Freeport Projects that could only occur after intervening action by the Department of Energy or Congress and that only those actors—and not the Commission—had the authority to prevent. Based on the record before us and the Associations’ arguments, we cannot conclude that the Commission’s analysis of the Projects’ indirect effects, separate and apart from exporting, was arbitrary or capricious.” Got it?

After that summary, no doubt you’re longing for even more FERC law. The D.C. Circuit is happy to oblige. Here are another two FERC cases: United Airlines v. FERC and Oklahoma Gas v. FERC. In United Airlines, FERC lost in some respects and won in others—for reasons that take 25 pages of complex analysis to explain. Here’s a sample: “Under its so-called ‘trended original cost’ methodology, FERC splits the nominal return on equity into an inflation component and the so-called ‘real’ return on equity, defined as the difference between the nominal return on equity and inflation. While the pipeline can recover its real return on equity in its current annual rates, inflation ‘is written-off or amortized over the life of the property.’” The key takeaway from United Airlines is that “while there may be evidence to support the conclusion that the nominal return on equity for September 2008 was in line with historical trends, this evidence does not show that the real return on equity for that time period was representative of SFPP’s costs.” Plus this: “FERC has not provided sufficient justification for its conclusion that there is no double recovery of taxes for partnership pipelines receiving a tax allowance in addition to the discounted cash flow return on equity.”

In Oklahoma Gas, Judge Wilkins (joined by Judges Kavanaugh and Millett), sided with FERC, concluding that “nothing in the Mobile Sierra doctrine requires its extension to the anticompetitive rights of first refusal at issue here.” What is the Mobile-Sierra doctrine? “FERC must presume a contract rate for wholesale energy is just and reasonable and cannot set aside the rate unless it is contrary to the public interest.” Does that presumption mean that public utilities cannot include rights of first refusal in their agreements, i.e., rights that give them the option to construct new facilities in their service areas? FERC says these first-refusal rights are bad for consumers and so ordered utilities to remove them from existing agreements. Long story short, the panel concluded that the Mobile-Sierra doctrine does not apply to rights of first refusal—even if FERC could adopt the Mobile-Sierra doctrine for them as a matter of discretion. (In reality, there is yet another FERC case this week, but this one is an unpublished judgment that raises issues similar to those in Oklahoma Gas.)

That’s enough FERC for this week. (A side note: Students, if you have any interest at all in fields that require a real understanding of technology, there are worse ways to make a living. It’s called supply and demand. When demand is high and supply is low, the point where the two curves intersect is called “Maserati.”)

Next, turn to something a bit more accessible: airport kiosks. In National Federation of the Blind v. DOT, Judge Henderson (joined by Judges Griffith and Pillard) addressed a DOT rule requiring 25% of all kiosks in airports to be accessible to the blind. The National Federation of the Blind, however, thinks it should be 100%. Unfortunately for the Federation, it did not bring its claim in time. The district court concluded it lacked jurisdiction because the rule was an “order” for purposes of the review statute, which means the challenge had to be brought in the circuit court. The panel agreed that it alone had jurisdiction, but also concluded that the Federation’s challenge was late. The panel likewise determined that uncertainty over jurisdiction was not a reasonable ground to excuse the lateness. (That certain “rules” are deemed “orders” for jurisdictional purposes can create unnecessary confusion. Congress really ought to fix this ….)

There is a FOIA case this week too: Bayala v. DHS. Here, Florent Bayala filed a FOIA request for documents associated with his asylum application—specifically notes from his interview and the written assessment. DHS responded, but withheld the notes and assessment with a loosey-goosey explanation. That isn’t the technical term, but it should be. Bayala claimed the vague response prevented a meaningful administrative appeal and filed suit. Before responding to the complaint, the agency released the notes—but not the assessment—along with a more detailed explanation. Judge Millet, joined by Judges Griffith and Srinivasan, concluded that the case was moot as to the documents the DHS turned over, but was not moot as to the assessment. (There is also an interesting discussion of administrative exhaustion: “Once the government abandoned its original FOIA decision, the dispute between the parties centered on the correctness of the Department’s materially novel and different in-court disclosure decision. There is no required administrative exhaustion process for that in-court litigation decision.”)

Next, consider Akiachak Native Community v. DOI. At last, finally, an easy case. Just kidding—this one is hard too. In fact, this one has a dissent. Can the Interior Department take lands into trust for Indian tribes in Alaska? We don’t know yet. Here’s why. Initially the agency said it would not take such lands into trust. But “several Alaska Native tribes sued the Department, challenging the regulation implementing that prohibition. After the district court held that Interior’s interpretation was contrary to law, the Department, following notice and comment, revised its regulations and dismissed its appeal.” Is that okay? Judge Tatel (joined by Judge Millett) said it was, even though the State of Alaska “seeks to prevent any new efforts by the United States to take tribal land in trust within the State’s borders.” Unfortunately for Alaska, the challenged regulation has been replaced, and so the State’s arguments are moot as an Article III matter. Judge Brown, in dissent, said that the majority misses an important point: “While I acknowledge the power of this court to declare when a case is dead, the court today euthanizes a live dispute.” Alaska, according to the dissent, “affirmatively sought relief of its own by requesting” a declaratory judgment that the Interior Department was precluded by statute from taking land into trust: “It is odd to think (as the court must) that the Department could moot Alaska’s claim by doing precisely what Alaska has sought to prevent from the moment it intervened in this suit. Alaska has tried all along to prevent the repeal of the Alaska exception; it hardly moots Alaska’s case to have the Department formalistically (if meaninglessly) do exactly what Alaska feared.” Importantly, however, both the majority and the dissent recognize that Alaska can bring a challenge to the new regulation, so we probably have not heard the last of this fight.

Next up is Al-Saffy v. Vilsack—a 26-page discrimination case authored by Judge Millett and joined by Judges Tatel and Edwards. If you have interest in diving into a “quagmire of procedural rules,” this is your case. I’ll let the Court’s summary speak for itself:

Al-Saffy properly filed EEO complaints against the Agriculture and State Departments alleging discrimination on the basis of national origin, religion, and retaliation. Because no final agency action ever issued as to his 2011 Complaint, he timely filed this civil action on October 10, 2013, and properly preserved the claims in that complaint. Because any final agency action on his 2012 Complaint failed to notify him of his right to appeal and the process for doing so, his lawsuit also timely raised those claims. Finally, because Al-Saffy created genuine issues of material fact as to whether he was an “employee” of the State Department within the meaning of Title VII, and whether he timely initiated contact with an EEO counselor at the State Department, his claims against that Department also should have survived summary judgment.

At this point, if you have managed to persevere through all these opinions, you’re probably wondering if any cases this week in the D.C. Circuit are straightforward. Yes, there are two straightforward cases, both involving the Affordable Care Act. In West Virginia v. HHS, Judge Silberman (joined by Judges Kavanaugh and Wilkins) made quick work of West Virginia’s challenge to the “the President’s determination not to enforce certain controversial provisions of the Affordable Care Act for a transitional period.” The Court concluded that West Virginia lacked standing to challenge the President’s non-enforcement of the law. West Virginia, to be sure, could itself enforce the law if it wanted to, but it was not required to do so. “Although Appellant dresses up its argument as a breach of State sovereignty in violation of the Tenth Amendment, its injury is nothing more than the political discomfort in having the responsibility to determine whether to enforce or not – and thereby annoying some West Virginia citizens whatever way it decides. And no court has ever recognized political discomfort as an injury-in-fact.” The Court, moreover, distinguished Texas v. United States: “Unlike the States in the Texas case, however, the State of West Virginia has not argued (presumably because it cannot argue) that the federal government’s decision not to enforce the statute has itself imposed monetary costs on West Virginia.” (By the way, who doesn’t love reading a Judge Silberman opinion?)

Finally, in Central United Life Insurance v. Burwell, the panel (per Judge Brown, joined by Judges Millett and Ginsburg) rejected an effort by HHS to effectively eliminate “fixed indemnity” insurance policies, which Congress has authorized: “As their label suggests, these policies pay out a fixed amount of cash upon the occurrence of a particular medical event. For instance, if a policyholder visits a hospital or purchases prescription drugs, the provider pays out a predetermined amount, which the policyholder is then free to use however she chooses.” The ACA, of course, “mandated that all applicable individuals maintain ‘minimum essential coverage.’” Yet many would prefer a fixed indemnity plan “despite the penalty.” HHS, it seems, does not like that, and so promulgated a rule requiring fixed indemnity policies to provide “minimum essential coverage,” even though “the very nature of fixed indemnity insurance … renders such plans incapable of satisfying those requirements.” The panel rejected the agency’s rule: “Disagreeing with Congress’s expressly codified policy choices isn’t a luxury administrative agencies enjoy.”

So that is the week’s cases. All of them are hard (hopefully I haven’t botched any of this week’s nuance … too much), important, or both. And because the D.C. Circuit is not the Supreme Court, we’ll have more opinions next week. Thank goodness. I’ve looked at my copy of Article III and sure enough, nothing says that courts have to close up shop at the end of June.

* One of my favorite quotes about the Supreme Court comes from Justice Robert Jackson: “We are not final because we are infallible, we are infallible because we are final.” And that is certainly true. The Supreme Court makes mistakes. For instance, whatever one thinks of the Supreme Court’s decision in Encino Motorcars, LLC v. Navarro, does anyone disagree that it is confusing? Why didn’t the Court explain itself better? Perhaps because the Court was too busy with other cases.

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About Aaron Nielson

Professor Nielson is an associate professor at Brigham Young University Law School. Before joining the academy, Professor Nielson was a partner in the Washington, D.C. office of Kirkland & Ellis LLP (where he remains of counsel). He also has served as a law clerk to Justice Samuel A. Alito, Jr. of the U.S. Supreme Court, Judge Janice Rogers Brown of the U.S. Court of Appeals for the D.C. Circuit, and Judge Jerry E. Smith of the U.S. Court of Appeals for the Fifth Circuit. All views expressed are the author's alone. Follow him on Twitter @Aaron_L_Nielson.

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