We have three opinions from the D.C. Circuit last week, including another dispatch from the Loper Bright frontier. Let’s begin there. May FERC require a power generator to upgrade its circuit breaker so that another generator can safely connect to the regional power grid? The generator’s duties with respect to facility upgrades are governed by a tariff and an agreement with the entity that operates the regional power grid. Neither of those documents, you may notice, is a statute such as would have been subject to Chevron before Loper Bright. However:

Though raised, the question went unanswered by the majority opinion in NextEra Energy Resources v. FERC. Judge Katsas, joined by Judge Millett, agreed with FERC’s interpretation of the tariff and contract: the generator had a duty to upgrade.

Judge Rao, however, did not agree with the agency’s interpretation, and she addressed the “Chevron-like” issue head-on. Because “contract interpretation is a question of law,” deference to the agency would be “incompatible with” Loper Bright, she wrote. Would the same follow for another well known “Chevron-like” deference, Auer deference? The Court reaffirmed Auer less than a decade ago, so its fate remains to be seen.

Judge Rao also protested what she saw as a sub-silentio application of Chevron deference in the majority opinion: adopting a merely “textually permissible” interpretation because that interpretation is consistent with regulatory goals. Quoting Loper Bright, she noted that “if an interpretation ‘is not the best, it is not permissible.’”

The majority responded that it was not selecting an interpretation in deference to the agency but rather applying a rule of statutory construction to resolve an ambiguity in the contract:

It is interesting to consider whether Loper Bright permits construction driven by regulatory goals announced by an agency. One possible distinction is that, in this context (as, presumably, in Auer), the agency rather than Congress is the source of the “purpose” that drives the construction.

The Court also resolved the emergency motion to stay the Brian Lipshutz profiled on this blog two weeks ago. The appeal concerns “Congressional Control Contracts,” which allow people to put money on the outcome of the upcoming congressional elections. The Commodity Futures Trading Commission prohibited Kalshi from listing them on its regulated exchange, but the district court vacated the Commission’s order. The Commission appealed and asked for a stay so that its prohibition could remain in place as the election approaches. I’ll leave a description of the merits of the dispute to Brian’s helpful post because the court’s decision did not turn on the merits.

Instead, the D.C. Circuit (Judge Millett, joined by Judges Pillard and Pan) held that the CFTC failed to make a sufficient showing of irreparable injury to warrant a stay. The CFTC identified several concerns, all tied to election integrity: event contracts based on elections introduce improper financial motivations for voters; they introduce incentives to spread misinformation, such as fake polling and inflated stock prices; and they provide a channel for bad actors, including foreign actors, to influence election results. The D.C. Circuit did not dismiss these concerns but instead observed that they are not new. Financial incentives, misleading polls, and external influence are problems that the government has been fighting from its earliest years, and the CFTC did not present specific, non-speculative data showing that election contracts heightened the danger enough to warrant the “extraordinary remedy” of a stay. The denial, however, is “without prejudice to renewal should substantiating evidence arise.”

The final opinion does not concern administrative law. Several alumni of Gallaudet’s Kappa Gamma fraternity appealed a dismissal of their defamation complaint against Gallaudet and the Washington Post. Their suit stemmed from a statement by the president of Gallaudet, and coverage by the Post, that accused the fraternity’s members of “systemic racism” and “anti-Semitic” behavior based on a 1989 photograph in which members of the fraternity are shown performing the “Bellamy salute.”  The Bellamy salute was at one time performed in the United States during the Pledge of Allegiance, but in 1942, Congress replaced it with the now familiar hand-over-the-heart gesture due to the salute’s resemblance to a Nazi salute.

The D.C. Circuit (Judge Katsas, joined by Judges Henderson and Edwards) affirmed the dismissal. The statements in question were “protected opinions” and thus not actionable under D.C. defamation law or the First Amendment. The Court explained:

Judge Henderson published a brief concurrence. The case does not implicate New York Times v. Sullivan, but her opinion gestures towards concerns expressed at greater length by critics of that decision’s press-friendly doctrine:

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