Welcome back to Ninth Circuit Review-Reviewed, your monthly recap of administrative law before arguably “the second most important court in the land.”

Every month, in preparation for these posts, I review the Ninth Circuit’s published opinions. But when I went over last month’s opinions for this post, I found slim pickings. Thus stymied, I turned to the Ninth Circuit’s unpublished memoranda. Based on the cases I saw, too much administrative law operates outside the Federal Reporter.  

Before we get to that, let’s start with the controversial history of unpublished decisions in U.S. Courts of Appeals.  

Before the Shadow Docket, there was Shadow Law

In the 1970s, circuit courts began issuing unpublished dispositions to better manage their burgeoning caseloads. Compared to published opinions, unpublished memoranda are significantly less resource intensive. Oral arguments are relatively infrequent, and analysis is usually barebone. Their defining characteristic, of course, is that they lack precedential value.

This simpler alternative quickly proliferated and became only more prevalent with time.  In 1987, unpublished opinions comprised 62% of decisions issued by circuit courts. By the mid-1990s, their share was about 75%. Today, it is about 86%.   

In theory, unpublished decisions reflect routine applications of existing precedent. In practice, however, they have engendered prominent pushback since their inception. For example, Justice Stevens pejoratively described unpublished memoranda as “secret law.” For this proposition, he cited criticisms brought by Judges Patricia Wald and Richard Posner. Other jurists have characterized unpublished orders as an “underground body of law,” or a “shadow body of law.”

Professor Stephen Wasby parsed the pushback into four categories:

1. Unpublished dispositions create inconsistency in case outcomes;
2. They create the potential for “stealth jurisprudence,” meaning circuit courts use unpublished dispositions to “bury” decisions that conflict with precedent;
3. They may contain sloppy analysis; and,
4. People are unsure about their validity.

Faced with these objections, proponents focus on the utility of unpublished dispositions in managing workloads at mandatory appeals courts. 

My sense is that there would be far less controversy if courts issued unpublished dispositions solely as intended—for the routine application of precedent. And they do, for the most part. At the margins, however, courts resolve nonroutine cases with unpublished dispositions, which galvanizes the critics.

Making Underground Law at CA9

At the Ninth Circuit, 92% of decisions come as unpublished memorandum, which was the highest percentage among circuit courts in 2023.

The Ninth Circuit’s house rules set forth criteria to a guide a panel’s decision whether to publish or not. Under Circuit Rule 36-2, a disposition “shall be designated” as a published opinion if it:

a) Establishes, alters, modifies or clarifies a rule of federal law, or
b) Calls attention to a rule of law that appears to have been generally overlooked, or
c) Criticizes existing law, or
d) Involves a legal or factual issue of unique interest or substantial public importance, or
e) Is a disposition of a case in which there is a published opinion by a lower court or administrative agency, unless the panel determines that publication is unnecessary for clarifying the panel’s disposition of the case, or
f) Is a disposition of a case following a reversal or remand by the United States Supreme Court, or
g) Is accompanied by a separate concurring or dissenting expression, and the author of such separate expression requests publication of the disposition of the Court and the separate expression.

For more on the inner workings of how Ninth Circuit panels decide whether to publish its dispositions, see Part III of this excellent article by Prof. Wasby.

Is CA9 too quick to designate dispositions as unpublished memoranda?

On reviewing a month’s worth of unpublished dispositions at CA9, I found more administrative law than I’d expected. I was further surprised by the novelty and importance of the legal disputes in some of these cases.

For example, in Marison v. Federal Aviation Administration, a three judge panel upheld the FAA’s reversal of an ALJ decision awarding attorney’s fees after the ALJ had dismissed an administrative enforcement action. Marison boiled down to the reasonableness of the FAA’s interpretation of its own regulation. Although the court conceded the controversy involved a “novel legal question,” the panel declined to hold oral argument, and its meager three-page memorandum upheld the agency in a series of conclusory statements. Regarding the petitioner’s claims on “estoppel, law-of-the-case doctrine, and Auer deference,” the panel simply said they’re “misplaced.” Under the criteria set forth in Circuit Rule 36-2(a), (d), and (e), the Marison disposition would seem to fit the bill for a published opinion.

In other instances, the court used unpublished memoranda to deny legal determinations by another governmental office, which would seem to be the sort of weighty outcome that merits publication. For example, in Mojave Desert Air Quality Management District v. Environmental Protection Agency, a three-judge panel held that the EPA arbitrarily and capriciously disapproved the petitioner’s state implementation plan under the Clean Air Act. And in Wild Fish Conservancy v. Quan, et al., a panel reversed a district court’s decision to vacate a determination by the National Marine Fisheries Service under the Endangered Species Act.

In sum, there is a lot of administrative law among the Ninth Circuit’s unpublished memoranda. And within this class of “underground” adlaw, some dispositions seem better suited for publication.

What Was CA9 Thinking by designating Kivett v. Flagstar Bank FSB as an unpublished memorandum?

This month’s featured case is Kivett v. Flagstar Bank, FSB (“Kivett II”), and its designation as an unpublished memorandum, despite its obvious importance, indicates that something is amiss with how the Ninth Circuit is choosing which dispositions to publish.   

To understand the importance of Kivett II, we must start with the case’s backstory. In the 2010 Dodd-Frank Act, Congress amended the National Bank Act’s (“NBA”) legal standard for federal preemption of state consumer financial laws with respect to national banks. Specifically, Dodd-Frank provided that the NBA preempts a state consumer financial law if the state law “significantly interferes with the exercise by the national bank of its powers.” (formatting added).  

In a 2018 case, Lusnak v. Bank of America, the Ninth Circuit became the first court to interpret the phrase “significantly interferes.” Lusnak upheld a California law requiring banks to pay a minimum of 2% interest on borrowers’ mortgage escrow accounts. In a published opinion, Lusnak construed “significantly interferes” to depend on the degree to which the state affects the bank’s operations. Because the statutorily fixed rate was not “punitively high,” it did not “significantly interfere” with the bank’s operations. Four years later, in Kivett v. Flagstar Bank (Kivett I), a CA9 panel applied the Lusnak precedent in an unpublished memorandum that sustained the same California statute.

Shortly after Kivett I was decided, the Second Circuit decided Cantero v. Bank of America, involving a New York law that was nearly identical to the California statute at issue in Lusnak and Kivett I. In Cantero, the Second Circuit expressly rejected the Ninth Circuit’s approach. Whereas the Ninth Circuit had looked to the “magnitude of the [state law’s] effects,” the Second Circuit looked to “the nature of an invasion into a national bank’s operations.” Ultimately, the Cantero panel determined that the New York statute was preempted because it would “exert control over” the power of national banks.

Thus, a circuit split developed. In both Cantero and Kivett I, the losing banks petitioned the Supreme Court for certiorari. Despite the cases’ similarity, the Court granted review only in Cantero. This past term, the Court vacated the Second Circuit’s gloss on NBA preemption. But the Court also rejected the respondent’s interpretation, which was modeled on the Ninth Circuit’s approach. Instead of either framework, the Court directed lower courts perform a case-by-case inquiry, involving a “nuanced comparative analysis” of prior preemption decisions on similar state statutes.  The Court remanded the case back to the Second Circuit to decide in accordance with its instructions.

Soon thereafter, the Court GVR’d the petition brought by the challengers in Kivett I. On remand, the CA9 panel seemingly had much to deliberate. After all, the Supreme Court appeared to dismiss the Ninth Circuit’s categorical interpretation of federal preemption. Instead, the Court directed courts to perform a case-by-case inquiry.

So, what did the Ninth Circuit do in Kivett II? Only weeks after receiving the case on remand, a three-judge panel simply affirmed its prior (unpublished) ruling in another skimpy unpublished memorandum.

It defies common sense to use an unpublished memorandum to resolve a case on remand from the Supreme Court. It also defies Rule 36-2(f), which calls for published opinions “following a reversal or remand by the United States Supreme Court.” It further defies the Ninth Circuit’s guidance in Rule 36-2(a) and (d), in that the case “clarifies a rule of federal law” and is of “substantial public importance,” respectively.

Evidently, the Kivett II panel believed that “the Supreme Court’s decision … suggests that [Kivett I] was correctly decided.” This is a strange inference to make, given not only the contrary language in the Supreme Court’s opinion, but also the fact that Kivett I was GVR’d. Given its conspicuous flaws, Kivett II is a case to keep an eye on. But it also signals that the Ninth Circuit is designating too many dispositions as unpublished memoranda.