The D.C. Circuit issued ten opinions last week, nine of which involved administrative law. We have three FERC opinions, two NLRB opinions, and one each about FCC, FDA, FEC, and DHS. Buckle your seatbelts, it’s going to be a long post.

Beginning with the FERC cases: In Shell Energy North America v. FERC, the D.C. Circuit granted a petition to review FERC orders requiring petitioners to refund charges in excess of a soft cap on short-term electricity sales. The panel (Chief Judge Srinivasan and Judges Millett and Pillard) issued a per curiam opinion concluding that FERC had failed to apply requisite presumption of reasonableness of the market rates.

A group of electricity consumers also challenged FERC’s refund calculation methodology, but the panel dismissed their petition as moot in light of its decision to grant the other petition:

Duke Energy Progress v. FERC involves two “agreements” between Duke Energy and two solar-power generators to link the generators’ facilities into Duke Energy’s transmission grid. I use “agreements” loosely because they did not reflect a meeting of the minds between Duke Energy and the generators on the question whether Duke Energy must reimburse the providers for the cost of upgrading the transmission infrastructure. One party to each agreement protested the reimbursement provision (or lack thereof) when they submitted the agreements to FERC for approval. FERC concluded that Duke Energy should reimburse the generators, approved the agreement providing for reimbursement, and disapproved the other.

The Court denied Duke Energy’s petitions to review. Judge Childs (joined by Judges Wilkins and Edwards) explained that FERC’s reasoning for requiring reimbursement was not arbitrary and capricious. Among other things, Duke Energy argued that FERC acted arbitrarily because it had previously approved similar contracts without reimbursement provisions. FERC acknowledged that some of the prior approvals could not be distinguished but insisted that those decisions, and not this one, were erroneous. The panel accepted this explanation: “Once an agency has acknowledged that some of its prior cases were wrongly decided, this Court’s precedent does not require the agency to endlessly repeat its error for the sake of consistency.”

Finally, and briefly, Columbia Gulf Transmission v. FERC. Judge Wilkins (joined by Judges Pillard and Garcia) denied petitions for review of FERC orders concerning a dispute over natural gas transmission. Petitioners are a natural gas producer and Columbia Gulf Transmission, a pipeline company. They complained to FERC that a second pipeline company did not maintain adequate pressure in its pipeline to transport the producer’s natural gas to Columbia Gulf Transmission’s facilities.  Their complaint was light on details about the source of the obligation to maintain adequate pressure, and FERC dismissed their complaint on procedural and substantive grounds. After analyzing Columbia Gulf Transmission’s standing (a fact-intensive inquiry here), the panel approved FERC’s handling of procedural matters and largely declined to reach the substance.

On to the NLRB: In Troutbrook Company v. NLRB, a divided panel upheld and enforced NLRB’s order holding that petitioner Troutbrook engaged in an unfair labor practice and ordering it to bargain in good faith with the union representing employees at one of its hotels. Judge Garcia, joined by Judge Rogers, concluded that substantial evidence supported NLRB’s finding that Troutbrook had failed to negotiate a collective bargaining agreement in good faith because it had refused to discuss certain mandatory subjects (including wages and benefits).

Judge Rao dissented. She wrote that NLRB failed to consider the “totality of the circumstances,” as it is required to do when considering a party’s good faith at the bargaining table.  Her opinion exemplifies an interesting dynamic between substantial evidence review and totality-of-the-circumstances tests. An agency that fails adequately to consider relevant circumstances gives dispositive weight to the circumstances it fully considers. So when a reviewing court concludes that an agency has not given adequate weight to relevant circumstances, is it operating under the substantial evidence standard of review, or is it applying to a de novo review to a legal error—namely, inappropriately creating a per se rule where a totality-of-the-circumstances test governs? Judge Rao concluded that by omitting relevant considerations—e.g., the impact of the COVID-19 pandemic and the union’s negotiating conduct—the Board effectively applied a per se rule that an initial refusal to discuss certain mandatory bargaining subjects constitutes an unfair labor practice.  

Incidentally, the Board tried its charges before an administrative law judge who, like SEC’s ALJs, is shielded by two layers of for-cause removal and arguably has statutory authority to issue monetary remedies. Although parties have brought Jarkesy–like challenges to these features of the Board’s structure in other cases,  it does not appear that Troutbrook made these constitutional arguments. (In any event, the relief the ALJ ordered in this case likely did not implicate Seventh Amendment, though her removal protection may still violate Article II.)

The other NLRB case concerns another marijuana dispensary. In GHG Management v. NLRB, Chief Judge Srinivasan (joined by Judge Henderson and Rogers) granted a petition for review and remanded to the agency to clarify its decision to certify a union at a Curaleaf dispensary, despite a Board representative’s misleading communication about outstanding ballots.

And concluding with the alphabet soup: International Dark-Sky Association v. FCC involves two consolidated appeals from FCC’s decision to license 7,500 satellites SpaceX proposes to launch as part of its Starlink system. DirectTV, a competitor of SpaceX, complained that FCC disregarded the risk of signal interference posed by SpaceX’s proposed satellites.  And International Dark-Sky Association argued that FCC failed to conduct an environmental review under NEPA despite significant environmental impacts of light pollution. The D.C. Circuit affirmed FCC’s decision. In a remarkably wide-ranging opinion for its length, Judge Rao (joined by Judges Childs and Ginsburg) addressed numerous issues raised by the appellants. Those issues included, among others, (1) the question when an agency can rely on an applicant’s self-certification of compliance in the face of evidence casting doubt on the certification, (2) the boundaries of an agency’s ability to rely on outside-party inputs to its decision-making process, and (3) the public’s right to access the data on which the third party relies.

In order to determine whether a proposed satellite would cause unacceptable interference to other satellites, FCC has adopted “power flux-density” limits set by the International Telecommunications Union (ITU). It requires applicants to certify that their satellite will remain within those limits and then to submit their data to the ITU to validate on its proprietary software that predicts power flux-density. This means that, in the course of issuing a license, FCC never performs its own analysis of power flux-density and the data concerning power flux-density never become part of the administrative record. DirectTV objected to this process because it meant that FCC refused to consider DirectTV’s evidence of interference risks and DirectTV could not access SpaceX’s own interference data until after FCC issued the license (at which point SpaceX was required to share its data as a condition of the license). The panel held that this was fine: FCC was entitled to rely on self-certification in the absence of “smoking gun” evidence of fraud; it could refer non-discretionary “fact gathering” to an outside party like the ITU; and it was not necessary to incorporate SpaceX’s data in the administrative record when FCC’s decision was based only on SpaceX’s self-certification and ITU’s validation.

Campaign Legal Center v. FEC concerns the scope of the “internet exception” to the Federal Elections Campaign Act’s requirement that individuals disclose “anything of value” spent for the purpose of influencing an election and in coordination with a campaign. That exception provides that unpaid internet communications need not be treated as in-kind donations. Campaign Legal Center, a frequent flier on this blog, complained that Correct the Record (a PAC) and Hillary for America failed to disclose Correct the Record’s coordinated expenditures that fell outside the internet exception. FEC, which had only four members at the time, did not have enough votes to investigate and so dismissed the complaint. Campaign Legal Center sued. Its case has been up to the D.C. Circuit once before, resulting in a remand covered here. On remand, the district court granted summary judgment to Campaign Legal Center. Judge Pillard (joined by Judges Childs and Edwards) affirmed, concluding that FEC interpreted its internet exemption too broadly to include all expenditures that eventually result in an unpaid internet communication (including salaries, travel, and polling). The Court also concluded that FEC disregarded plausible factual allegations that expenditures were made in coordination with the Hillary Clinton campaign.

In addition to its clarification of campaign finance law, the decision should be of interest for what it reveals about the reviewability of prosecutorial decisions. We’ve covered that topic before—most recently here and here. FEC’s decision not to act on a complaint is reviewable if it is “contrary to law” but not if it involves an exercise of discretion. The panel’s decision here seems to have been based in part on a legal error—namely, FEC’s interpretation of the internet exception—but what of the judgment about the plausibility of the factual allegations?

There is also an interesting mootness issue: FECA affords FEC thirty days to comply with a “contrary to law” order or else lose its exclusive enforcement power. If thirty days elapse without action by FEC, then the complainant has a private right of action to sue the respondent(s) for the alleged violations. Campaign Legal Center and FEC both believed that the thirty-day window closed last year, and Campaign Legal Center has already commenced a private action against the campaign and the PAC. Campaign Legal Center further argued that this development mooted FEC’s appeal. The Court disagreed:

So, FEC still enjoys exclusive enforcement power, and Campaign Legal Center’s private suit is presumably premature.

In Delaware Valley Regional Center v. DHS, the Court affirmed the district court’s dismissal of visa applicants’ complaint against Department of Homeland Security. The plaintiffs have been found to be eligible for EB-5 visas, which are visas for foreign investors who create jobs in the United States. But because the EB-5 visa program is oversubscribed, they are still waiting to receive their visas. While they were “in line,” Congress created a “reserved” visa program that allocated a subset of EB-5 visas to those who invest in infrastructure projects. Plaintiffs believe they are eligible for those visas but, based on a DHS Q&A document and policy manual, are concerned DHS will not consider them for eligibility. Judge Pan (joined by Judges Pillard and Walker) agreed with the district court that there is no final agency action to challenge.

Finally, the Court issued an opinion under seal in Ipsen Pharmaceuticals v. Becerra, a case challenging FDA’s decision to regulate the plaintiff’s product as a drug rather than a biological product.

---

D.C. Circuit Review – Reviewed is designed to help you keep track of the nation’s “second most important court” in just five minutes a week.