Justia Government & Administrative Law Opinion Summaries

A company operating as a mortgage lender applied for and received a Paycheck Protection Program (PPP) loan during the COVID-19 pandemic. The company’s PPP loan was later forgiven. A private party, acting as a qui tam relator under the False Claims Act (FCA), alleged that the company and its chief executive officer made several false statements in their loan application and forgiveness process. The key allegations were that the company was ineligible for PPP funds as a financial business primarily engaged in lending, that it misrepresented its use and need for the loan, and that it falsified the number of employees to increase the loan amount. The relator argued that these misrepresentations led the government to approve and forgive the loan improperly.Previously, the United States District Court for the Southern District of California dismissed the relator’s amended complaint. The district court found that the FCA’s public disclosure bar applied, reasoning that the necessary information supporting the ineligibility allegation was already publicly available on a government website, specifically concerning the company’s business classification. The district court also concluded that the relator’s allegations regarding the inflated employee count were speculative. The relator was denied leave to further amend the complaint, on the basis that amendment would be futile.The United States Court of Appeals for the Ninth Circuit reviewed the case and held that the public disclosure bar did not apply because the information on the government website was not “substantially the same” as the relator’s allegations, and the company’s own website did not qualify as “news media” under the statute. The appellate court agreed that the relator’s claim regarding the number of employees was not sufficiently pleaded but found the district court abused its discretion by denying leave to amend. The Ninth Circuit reversed the dismissal and remanded for further proceedings. View "RELATOR, LLC V. ERSKINE" on Justia Law

Two South Carolina corporations, owned and operated by Stephen P. Mantell, assist individuals with probate matters by serving as personal representatives, conservators, guardians, and attorneys in fact under powers of attorney. They occasionally acted as trustees of trusts but have since discontinued such services. Complaints were filed with the South Carolina Board of Financial Institutions alleging these corporations were conducting a “trust business” without Board authorization, as required by S.C. Code Ann. § 34-21-10.The Board sought a declaratory judgment and an injunction to stop the companies from operating as trustees or in other fiduciary roles without approval. The Master-in-Equity for Georgetown County granted a declaratory judgment that the corporations could not act as trustees without Board authorization and permanently enjoined them from doing so. However, the court declined to extend the injunction to their roles as guardian, conservator, or attorney in fact, finding these did not constitute a “trust business” under the statute.The South Carolina Court of Appeals reversed, holding that “trust business” under § 34-21-10 included all fiduciary services, not just acting as trustee, and thus required Board approval for the corporations’ roles as guardian, conservator, personal representative, and attorney in fact. Upon review, the South Carolina Supreme Court granted certiorari and reversed the Court of Appeals’ decision. The Supreme Court held that the statutory term “trust business” does not encompass serving as a guardian, conservator, personal representative, or attorney in fact. The Court found that these activities are not defined as “trust business” under South Carolina law and are adequately regulated by the Probate Code and probate courts. The main holding is that the corporations’ non-trustee fiduciary roles do not require Board authorization under § 34-21-10. View "SC Board of Financial Instituions v. CDM Corp, Inc." on Justia Law

A group of nursing homes under common ownership sought loan forgiveness under the Paycheck Protection Program (PPP), enacted as part of the CARES Act, after receiving loans during the COVID-19 pandemic. The Small Business Administration (SBA) had created the Corporate Group Rule, limiting the total amount of PPP loans eligible for forgiveness to $20 million for all businesses majority-owned, directly or indirectly, by a common parent. Although one of the nursing homes received a loan after the group had surpassed the cap, the SBA refused to forgive amounts exceeding $20 million collectively, leaving the remaining debt with the lenders.After administrative judges upheld the SBA’s application of the Corporate Group Rule, the nursing homes filed suit in the United States District Court for the Northern District of Illinois. The district court granted summary judgment to the SBA, finding the agency’s rule consistent with the statutory grant of discretion and not arbitrary or capricious.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the CARES Act and its incorporation of 15 U.S.C. § 636(a), together with emergency rulemaking authority granted to the SBA, allowed the agency to set aggregate lending limits for corporate groups. The court found that the SBA’s definition of a “corporate group” and its application to the nursing homes was supported by substantial evidence and was not arbitrary or irrational. The court further held that applying the Corporate Group Rule to the nursing homes’ loan forgiveness requests did not constitute impermissible retroactive rulemaking. Accordingly, the Seventh Circuit affirmed the district court’s judgment in favor of the SBA. View "Oak Lawn Respiratory and Rehabilitation Center v Small Business Administration" on Justia Law

The plaintiff, a resident of Salem, South Carolina, frequently visited her local post office. During one visit, after experiencing poor service, she was confronted and physically attacked by a postal employee, resulting in significant injuries. The Postmaster, rather than assisting her or calling for help, allegedly exacerbated the situation by physically handling her and preventing her from seeking help. The plaintiff claimed the employee had a history of aggressive behavior known to postal management.The plaintiff initially filed suit in South Carolina state court against the individual employees and the United States. The case was removed to the United States District Court for the District of South Carolina, which, after the government substituted itself for the individual defendants under the Westfall Act and moved to dismiss, dismissed all claims. The district court determined the Federal Tort Claims Act (FTCA) did not waive sovereign immunity for most claims, including those arising from assault and battery, and that the claims for negligent hiring, supervision, and retention were barred by the discretionary function exception. The court also dismissed the Bivens constitutional claims and the FOIA claim for failure to exhaust administrative remedies.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s dismissal of most claims, holding that the FTCA’s intentional tort exception precludes claims against the government for injuries arising from assault and battery by a postal employee, even if pleaded as negligence. However, the Fourth Circuit reversed and remanded as to a narrow aspect of the negligence claim against the Postmaster, holding that under the Supreme Court’s decision in Sheridan v. United States, a claim may proceed if the government employee negligently created the risk of harm, independent of the tortfeasor’s employment status. The Fourth Circuit otherwise affirmed the district court’s judgment. View "Lusk v. Merchant" on Justia Law

A nonprofit organization seeking to preserve the Sugarloaf Mountain area submitted two requests under the Maryland Public Information Act (MPIA) to Frederick County, seeking records relating to changes in a local land management plan. The County acknowledged receipt but did not produce any documents or respond further for eight months. After the nonprofit filed suit in the Circuit Court for Frederick County, the County provided some documents and withheld others, citing various privileges. Following a bench trial, the Circuit Court ordered most withheld documents to be produced and later conducted an in camera review for a subset of documents, ultimately finding some were properly withheld.After prevailing in obtaining key documents, the nonprofit sought attorneys’ fees. The Circuit Court found the requested fees reasonable under the applicable “lodestar” method but reduced the award from over $48,000 to $25,000, considering factors such as the absence of an “evil motive” by County officials and the burden on County taxpayers. The Circuit Court denied a supplemental fee petition for procedural reasons. On appeal, the Appellate Court of Maryland affirmed the reduced fee award, finding no abuse of discretion, but vacated the denial of the supplemental petition and remanded that issue.On further appeal, the Supreme Court of Maryland held that the Circuit Court abused its discretion in calculating the attorneys’ fees award. The Supreme Court found that the Circuit Court improperly relied on factors not relevant under the lodestar approach set forth in Maryland Rule 2-703(f)(3), such as the officials’ motives and the effect on taxpayers, and failed to explain the basis for the reduction. The Supreme Court of Maryland reversed the Appellate Court’s affirmance of the fee award, remanded with instructions to vacate the award, and directed the Circuit Court to reconsider the petition using the proper legal standards. View "Sugarloaf Alliance v. Frederick Cnty." on Justia Law

Two German nationals, Axel Diegelmann and his son Fritz, operated businesses trading in precious metals. In 2024, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) blocked the property of the Diegelmanns and three companies owned by Axel, finding that Axel, Fritz, and one company operated in the metals and mining sector of the Russian economy, and that the other two companies were controlled by or acted on behalf of Axel. OFAC determined that the Diegelmanns had helped Russia-based metals companies buy and sell precious metals, circumventing international sanctions.The Diegelmanns challenged the sanctions in the United States District Court for the District of Columbia, arguing that their activities did not amount to operating in the metals and mining sector as defined by the relevant regulations. The district court granted summary judgment to the government, agreeing with OFAC’s application of the sanctions and denying the Diegelmanns’ motion for summary judgment.The United States Court of Appeals for the District of Columbia Circuit reviewed the district court’s decision de novo under the Administrative Procedure Act’s arbitrary-or-capricious standard, which is highly deferential, especially for national security matters. The appellate court held that purchasing finished precious metals, including gold bars, constituted “procuring geological materials” as used in the governing regulations. The court rejected the Diegelmanns’ argument that their conduct did not amount to procurement and found their alternative argument—that refined metals are not “geological materials”—was not preserved for appeal. The court also concluded that substantial evidence supported OFAC’s finding that the Diegelmanns’ activities were sufficiently connected to Russia. The appellate court affirmed the district court’s judgment. View "Diegelmann v. Bessent" on Justia Law

Alignment Healthcare, a private health insurer offering Medicare Advantage plans, challenged the accuracy of its star ratings issued by the Centers for Medicare & Medicaid Services (CMS) for two of its contracts. The ratings are partly determined by an annual survey of enrollees, and Alignment claimed that a significant drop in Spanish-language responses resulted from errors in survey administration—specifically, that some Spanish-speaking enrollees received the survey in English despite indicating a preference for Spanish. Alignment argued that this error negatively affected its ratings, as its internal data showed higher satisfaction among Spanish-speaking enrollees.After receiving preliminary survey results in September 2024, Alignment raised these concerns with CMS, requesting a review of the sampling methodology and suppression of the disputed survey data. CMS reviewed the sampling and response data, consulted with the survey vendor, and ultimately found no evidence of a survey administration error. CMS noted that Spanish-speaking enrollees had access to Spanish-language surveys and that the rates of Spanish responses were higher than average. CMS denied Alignment’s requests for data suppression or further validation, stating it had no authority to remove the results absent evidence of protocol violations.Alignment then filed suit under the Administrative Procedure Act in the United States District Court for the District of Columbia, which granted summary judgment for CMS. On appeal, the United States Court of Appeals for the District of Columbia Circuit reviewed the district court’s decision de novo. The appellate court held that Alignment failed to demonstrate that CMS’s actions were arbitrary or capricious or that survey protocols had been violated. The court found CMS’s investigation and explanation adequate, rejected Alignment’s contentions regarding unequal treatment and nondelegation, and affirmed the district court’s grant of summary judgment to CMS. View "Alignment Healthcare Inc. v. HHS" on Justia Law

In 2020, the United States Postal Service implemented operational changes, including reducing high-speed mail sorting machines, decreasing employee overtime, eliminating late or extra mail delivery trips, and altering the sequence by which some mail carriers sort and deliver the mail. Several states and municipalities challenged these changes, alleging they would impede public services and hinder residents’ ability to vote by mail in the upcoming November election. Among their claims was that the Postal Service failed to seek an advisory opinion from the Postal Regulatory Commission before implementing the changes, as required by federal law.The United States District Court for the District of Columbia initially granted a preliminary injunction against the Postal Policy Changes, finding the plaintiffs likely to succeed on their claim regarding the lack of an advisory opinion. The court rejected the government’s argument that the Postal Regulatory Commission’s review scheme precluded district court jurisdiction. Later, the district court granted summary judgment for the plaintiffs on the advisory opinion claim, permanently enjoining the Postal Service from eliminating late or extra mail delivery trips without first seeking an advisory opinion from the Commission. The court maintained that its jurisdiction was not displaced by the statutory review scheme, reasoning that the scheme was merely supplemental and insufficient for immediate relief.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and held that Congress had established a statutory review scheme, channeling complaints about Postal Service policy changes first to the Postal Regulatory Commission, with subsequent review in the Court of Appeals. This scheme implicitly displaced the district court’s jurisdiction over the advisory opinion claim. Therefore, the Court of Appeals vacated the district court’s grant of summary judgment for the plaintiffs and remanded with instructions to dismiss the advisory opinion claim. View "State of New York v. Trump" on Justia Law

Two individuals, who were part-time police officers, submitted claims against a police protection district and associated personnel, alleging retaliation and harassment following their whistleblowing activities related to fiscal mismanagement and conflicts of interest involving a former police commissioner and chief of police. Their claim forms described various acts of misconduct but, instead of specifying when these actions occurred, stated that the “loss is ongoing” and provided no date or date range for the alleged conduct.The Superior Court of San Mateo County reviewed the claims and found them deficient for failing to comply with California Government Code section 910, which requires that a claim state the “date, place and other circumstances of the occurrence or transaction which gave rise to the claim asserted.” Despite being notified of the deficiency and given an opportunity to provide date information, the petitioners did not amend their claims. The trial court sustained demurrers filed by the district and other defendants, concluding the forms neither complied nor substantially complied with the statutory requirements, and denied leave to amend for several causes of action.The Court of Appeal of the State of California, First Appellate District, Division Five, reviewed the trial court’s orders after the petitioners sought writ relief. The appellate court held that claim forms stating only “Numerous—Loss is ongoing” without any specific dates or date ranges do not satisfy section 910’s requirements, nor do they substantially comply. The court emphasized that even in cases of continuing or ongoing misconduct, claimants must provide at least some date or date range to allow the public entity to investigate the claim. The petition for writ of mandate was denied, and the appellate court affirmed that the trial court correctly sustained the demurrers without leave to amend. View "Khedr v. Superior Court" on Justia Law

Several nonprofit organizations that rescue stray puppies from Caribbean islands and arrange for their adoption in the United States challenged a 2024 regulation issued by the Centers for Disease Control and Prevention (CDC). This regulation requires all dogs imported into the United States to be at least six months old, denying entry to younger dogs regardless of their country of origin. The CDC implemented this rule to prevent the reintroduction of rabies, citing both the difficulty of accurately assessing rabies risk and age in younger puppies and concerns about fraudulent documentation regarding the dogs’ origins and vaccination status.After the regulation was enacted, the plaintiffs argued that it exceeded the CDC’s statutory authority under 42 U.S.C. § 264(a) and was arbitrary and capricious under the Administrative Procedure Act. The United States District Court for the District of Massachusetts granted summary judgment to the CDC, finding the age requirement within the agency’s statutory authority as an inspection measure directly related to preventing the introduction of communicable diseases. The district court also concluded that the CDC had reasonably explained its rationale for the rule and had not acted arbitrarily.On appeal, the United States Court of Appeals for the First Circuit reviewed the district court’s judgment de novo, applying the standards articulated in recent Supreme Court decisions. The First Circuit held that the CDC’s age requirement is a permissible inspection measure under its statutory authority and is rationally connected to the goal of preventing rabies reintroduction. The court further held that the CDC’s decision was not arbitrary or capricious, as it considered relevant concerns and provided an adequate explanation, including addressing the plaintiffs’ reliance interests. Accordingly, the First Circuit affirmed the district court’s judgment. View "Bruno Project Rescue, Inc. v. Centers for Disease Control and Prevention" on Justia Law