Notice & Comment

D.C. Circuit Review – Reviewed: Playing the Lottery

Apologies: This post was written quickly. My evening was spent at a D.C. Circuit-ish event.

The D.C. Circuit and “Net Neutrality” have a long history. Here is a short, very simplified version of it.*

In 2002, the FCC decided that internet access was an “information service” rather than a “common-carrier” service. The decision was challenged in three courts — specifically, the Third, Ninth, and D.C. Circuits. By lottery, it was assigned to the Ninth Circuit. The Ninth Circuit ruled against the FCC but was reversed by the Supreme Court.

The FCC’s designation carried with it a great deal of freedom for cable companies over their pricing and service models. In 2008, for instance, when the FCC fined Comcast for allegedly blocking internet traffic, the D.C. Circuit, per Judge Tatel, vacated the fine, concluding that the FCC had failed to establish its authority to issue such a fine.

A few years later, the FCC sought increased regulatory authority by promulgating the “Open Internet Order of 2011,” which decreed, among other things, that certain “broadband providers may not block lawful content” or “unreasonably discriminate in transmitting lawful network traffic.” That order was also challenged and the D.C. Circuit, again per Judge Tatel, vacated portions of it because the agency had essentially imposed common carrier requirements on broadband providers, even though they were not common carriers.

Faced with another defeat, the FCC revisited the “information service” designation in its Open Internet Order of 2015. Under the new order, broadband internet access was reclassified as a common-carrier telecommunications service, and both landline and mobile internet providers were subject to, among other things, three “bright-line rules”: (1) “no blocking”, (2) “no throttling” and (3) “no paid prioritization.” This order was also challenged in multiple courts, specifically the Fifth Circuit and the D.C. Circuit. Another lottery was held, and the D.C. Circuit’s number was drawn. This time, the D.C. Circuit ruled in favor of the FCC — also with Judge Tatel writing. Although that decision prompted two dissents and one concurrence, the en banc court denied review.

After the election of President Trump and the appointment of a new majority of commissioners, the FCC reversed course. It voted on December 14, 2017 to reinstate the information service classification. The new policy won’t take effect until it is published in the Federal Register. But that hasn’t stopped would-be-challengers from filing claims. Earlier this week, Matt Schettenhelm (an indispensable resource on all things FCC) tweeted:

Accordingly, there almost certainly will be another lottery to decide where the challenge will be heard.

***

Let’s pause for a second. To many readers, the preceding paragraphs should make sense. But I imagine some folks are scratching their heads. “A lottery? Did he say really ‘lottery’? Why would courts have a lottery?”

Yes, I said lottery. Here is the federal statute:

If an agency, board, commission, or officer receives two or more petitions for review of an order in accordance with the first sentence of paragraph (1) of this subsection, the agency, board, commission, or officer shall, promptly after the expiration of the ten-day period specified in that sentence, so notify the judicial panel on multidistrict litigation authorized by section 1407 of this title, in such form as that panel shall prescribe. The judicial panel on multidistrict litigation shall, by means of random selection, designate one court of appeals, from among the courts of appeals in which petitions for review have been filed and received within the ten-day period specified in the first sentence of paragraph (1), in which the record is to be filed, and shall issue an order consolidating the petitions for review in that court of appeals.

There is a good reason for this lottery — it reduces forum shopping and mad rushes to the courthouse. As helpfully explained here, the Judicial Panel on Multidistrict Litigation will “‘plug into a computer the circuits which are competing and it picks a random number and that’s where they then assign all of the cases,'” and “[e]ach circuit court is only entered into the lottery once, regardless of how many individual suits were filed there.”

Thus, it is possible that the D.C. Circuit — including Judge Tatel, who has already written three opinions on the subject — will not be the court to review the latest FCC order. To be sure, if the D.C. Circuit “loses” the lottery, a party in the “winning” circuit may file a motion to transfer. Because the D.C. Circuit has played such a major role to date, it is likely that someone would move to have the case transferred there. Whether a circuit would transfer the case, however, is hard to predict.

It is interesting to me that the petitions for review were filed before the FCC’s order was published in the Federal Register. It is strange, but it appears to have happened before. As the FCC explained in a motion to dismiss (available on Westlaw) filed regarding the Open Internet Order of 2015:

On March 23, 2015, the Commission was served with two petitions for review of the Order: one filed by Alamo Broadband in the United States Court of Appeals for the Fifth Circuit, the other filed by the United States Telecom Association (“USTelecom”) in this Court. Pursuant to the random selection procedure prescribed by 28 U.S.C. § 2112(a), the Commission referred the two petitions to the Judicial Panel on Multidistrict Litigation. In a letter accompanying its submission of the petitions to the Judicial Panel, the Commission noted that it believed both petitions had been filed prematurely, but that it expected to raise that issue in the court that the Judicial Panel selected. The Judicial Panel conducted a lottery and designated this Court as the venue where the cases would be consolidated.

In other words, parties want to make sure they have a ticket for the lottery:

Whatever may have happened in the past, however, it is strange that the lottery might be based on premature petitions. I imagine the FCC’s lawyers are thinking about the question, but my instinct is that the lottery should not happen until the order is published and new petitions for review are filed.

Anyway, stay tuned.

The D.C. Circuit issued two cases this week. And as far as I can tell, neither involved a lottery!

In Natural Resources Defense Council v. NRC, Judge Ginsburg (joined by Judges Kavanaugh and Williams) denied a petition seeking to halt the licensing of Strata Energy, Inc. to mine uranium in Crook County, Wyoming. This is a complicated case, but one part in particular stands out:

The Councils’ other procedural complaint focuses upon the supplementation of the [Final Environmental Impact Statement] after the staff had issued a license to Strata. …

In short, their argument is that the purpose of the NEPA is to “insure that environmental information is available to public officials and citizens before decisions are made and before actions are taken,” 40 C.F.R. § 1500.1(b), and the Board as much as admitted the FEIS failed in that regard. …

These are not idle concerns. We must consider, however, the exact nature of the initial decision to issue the license. The Commission seeks to portray the initial licensing decision as entirely provisional; that is not quite correct for, as the Councils charge (and the Commission does not deny), Strata was authorized to begin digging immediately upon receipt of the license. At the same time, the license was provisional in the most meaningful sense; no portion of it was irrevocable, and the Commission’s own regulations make clear that the Board can amend or rescind a license after it has been issued. 10 C.F.R. § 2.340(e)(2). Indeed, the Board did amend the license to increase the area in which Strata was required to attempt to locate and to fill previously dug boreholes.

Moreover, the Councils have not pointed to any harmful consequence of the supplementation; the Board came to the same decision after it had considered the supplemental information, and there is nothing to be gained by remanding the matter to the Commission for the staff or the Board to consider the same information again. …

We do not mean to imply the procedure the Board followed was ideal or even desirable. Certainly it would be preferable for the FEIS to contain all relevant information and the record of decision to be complete and adequate before the license is issued. [Precedent], however, makes clear that even if this procedure was not ideal it was permissible, and common sense counsels against prolonging this dispute by requiring an utterly pointless proceeding on remand.

In New England Power Generators Association v. FERC, Judge Randolph (joined by Judges Griffith and Sentelle) dismissed a petition to review because the Association did not seek a rehearing from the Commission. At the same time, the Court determined that it did have jurisdiction over a challenge to another order. That challenge, however, was rejected on the merits. The Court included this bit of interesting analysis:

So long as any change is reasonably explained, it is not arbitrary and capricious for an agency to change its mind in light of experience, or in the face of new or additional evidence, or further analysis or other factors indicating that the agency’s earlier decision should be altered or abandoned. Cf. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 514–16 (2009). The Supreme Court has itself overruled many of its decisions over the years in light of such considerations. See Congressional Research Service, The Constitution of the United States of America: Analysis and Interpretation, S. Doc. No. 112-9, at 2623–35 (2017). As a corollary, a change in an agency’s course in reaction to new information does not indicate that its initial course was necessarily arbitrary and capricious when charted. On the facts before us, the Commission’s reconsideration when presented with more data does not change our view of the propriety of the Complaint Orders.

And that’s the week.

* And I do mean simplified.

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