Justia Government & Administrative Law Opinion Summaries

Alpine Securities Corporation, a securities broker-dealer and member of the Financial Industry Regulatory Authority (FINRA), faced sanctions from FINRA in 2022 for violating its rules. FINRA imposed a cease-and-desist order and sought to expel Alpine from membership. Alpine challenged the constitutionality of FINRA in federal court, arguing that FINRA's expedited expulsion process violated the private nondelegation doctrine and the Appointments Clause.The United States District Court for the District of Columbia denied Alpine's request for a preliminary injunction to halt FINRA's expedited proceeding. The court held that FINRA is a private entity, not subject to the Appointments Clause, and that the SEC's ability to review FINRA's decisions satisfied the private nondelegation doctrine.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court found that Alpine demonstrated a likelihood of success on its private nondelegation claim, as FINRA's expulsion orders take effect immediately without prior SEC review, effectively barring Alpine from the securities industry. The court held that this lack of governmental oversight likely violates the private nondelegation doctrine. The court also found that Alpine faced irreparable harm if expelled before SEC review, as it would be forced out of business.The court reversed the district court's denial of a preliminary injunction, instructing it to enjoin FINRA from expelling Alpine until the SEC reviews any expulsion order or the time for Alpine to seek SEC review lapses. However, the court did not grant a preliminary injunction on Alpine's Appointments Clause claims, as Alpine did not demonstrate irreparable harm from participating in FINRA's expedited proceeding itself. The case was remanded for further proceedings consistent with the appellate court's findings. View "Alpine Securities Corporation v. Financial Industry Regulatory Authority, Inc." on Justia Law

Grand Canyon University (GCU), a private university in Arizona, applied to the U.S. Department of Education to be recognized as a nonprofit institution under the Higher Education Act of 1965 (HEA). The Department denied GCU’s application, despite GCU having obtained 26 U.S.C. § 501(c)(3) recognition from the IRS as a tax-exempt organization. The Department concluded that GCU did not meet the operational test’s requirement that both the primary activities of the organization and its stream of revenue benefit the nonprofit itself.The U.S. District Court for the District of Arizona granted summary judgment in favor of the Department, upholding the denial of GCU’s application. The court found that the Department’s decision was not arbitrary and capricious or contrary to law. GCU appealed this decision.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court’s summary judgment. The Ninth Circuit held that the Department applied the wrong legal standards in evaluating GCU’s application. Specifically, the Department incorrectly relied on IRS regulations that impose requirements beyond those of the HEA. The correct HEA standards required the Department to determine whether GCU was owned and operated by a nonprofit corporation and whether GCU satisfied the no-inurement requirement. The Department’s failure to apply these correct legal standards necessitated that its decision be set aside.The Ninth Circuit reversed the judgment of the district court and remanded the case with instructions to set aside the Department’s denials and to remand to the Department for further proceedings consistent with the correct legal standards under the HEA. View "GRAND CANYON UNIVERSITY V. CARDONA" on Justia Law

The Tuscaloosa City Council passed an ordinance limiting the maximum occupancy of certain restaurants, affecting a sports bar owned by CMB Holdings Group. The ordinance required establishments with restaurant liquor licenses to maintain occupancy limits based on their configuration as restaurants, not as bars or entertainment venues. This change reduced the sports bar's maximum occupancy from 519 to 287, negatively impacting its revenue. CMB Holdings Group sued the City of Tuscaloosa, the mayor, city council members, and the fire marshal, alleging racial discrimination and other claims.The Tuscaloosa Circuit Court dismissed most of CMB's claims, including those for money damages against the City and personal-capacity claims against the mayor and councilors due to legislative immunity. The court also dismissed claims for procedural and substantive due process, equal protection, and others, leaving only claims for declaratory and injunctive relief under the Alabama Constitution's Contracts Clause. CMB requested the court to alter or amend its judgment or certify it as final for appeal purposes. The court denied the request to alter or amend but granted the Rule 54(b) certification, allowing CMB to appeal the dismissed claims.The Supreme Court of Alabama reviewed the case and determined that the Rule 54(b) certification was improper. The court found that the adjudicated and unadjudicated claims were closely intertwined, particularly regarding whether the ordinance affected vested rights or mere privileges and whether it served a legitimate public interest. The court concluded that separate adjudication could lead to inconsistent results and dismissed the appeal for lack of a final judgment. View "CMB Holdings Groupv. City of Tuscaloosa" on Justia Law

The United States Chamber of Commerce, Business Roundtable, and the Tennessee Chamber of Commerce and Industry sued the Securities and Exchange Commission (SEC) and its Chairman, alleging that the SEC’s partial rescission of a prior regulation did not comply with the Administrative Procedure Act (APA). The regulation in question involved proxy voting advice businesses (PVABs) and their role in the proxy voting process for public companies. The plaintiffs argued that the SEC’s actions were procedurally and substantively deficient under the APA.The United States District Court for the Middle District of Tennessee granted summary judgment in favor of the SEC. The court found that the SEC’s decision to rescind certain conditions of the 2020 Rule was not arbitrary and capricious. The court also held that the SEC had provided a reasonable explanation for its change in policy and had adequately considered the economic consequences of the rescission as required by the Exchange Act. Additionally, the court determined that the 31-day comment period provided by the SEC was legally permissible under the APA.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo and affirmed the district court’s decision. The Sixth Circuit held that the SEC’s 2022 Rescission was not arbitrary and capricious because the SEC had acknowledged its change in position, provided good reasons for the change, and explained why it believed the new rule struck a better policy balance. The court also found that the SEC had adequately assessed the economic implications of the rescission, relying on data from the 2020 Rule and providing a qualitative analysis of the costs and benefits. Finally, the court concluded that the 31-day comment period was sufficient to provide a meaningful opportunity for public comment, as required by the APA. View "Chamber of Commerce v. Securities and Exchange Commission" on Justia Law

James Donelson, CEO of Long Leaf Trading Group, oversaw a company that provided trade recommendations in the commodities market and earned commissions on executed trades. Despite collecting $1,235,413 in commissions from customers participating in the "Time Means Money" (TMM) program, customers incurred losses totaling $2,376,738. The Commodity Futures Trading Commission (CFTC) investigated and filed a civil enforcement action against Donelson and others, alleging options fraud and other violations of commodities laws.The United States District Court for the Northern District of Illinois granted summary judgment to the CFTC on all but one count against Donelson. The court found that Donelson and Long Leaf made several misrepresentations, including misleading trade history emails, false return rate projections, and omissions about Long Leaf's history of losses. The court also determined that Long Leaf acted as a Commodity Trading Advisor (CTA) and should have registered as such. Donelson was ordered to pay restitution and disgorgement totaling $3,612,151. Donelson appealed the summary judgment.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court affirmed the district court's findings on options fraud, fraud by a CTA, and fraudulent advertising by a CTA, agreeing that Donelson made misleading statements and omissions. The court also upheld the finding that Long Leaf was a CTA and that Donelson was a controlling person of the company. However, the court reversed the summary judgment on the claims related to the failure to register as a CTA and failure to make required disclosures, remanding these issues for further proceedings to determine if Long Leaf was exempt from registration under CFTC regulations. View "Commodity Futures Trading Commission v. Donelson" on Justia Law

United Parcel Service, Inc. (UPS) challenged the Postal Regulatory Commission's (Commission) handling of the United States Postal Service's (Postal Service) pricing of competitive products, arguing that the Postal Service underprices these products by not accounting for "peak-season" costs incurred during the holiday season. UPS claimed that these costs, driven by increased demand for package deliveries, should be attributed to competitive products rather than being treated as institutional costs.The Commission denied UPS's petition to initiate rulemaking proceedings and its subsequent motion for reconsideration. The Commission found that UPS's methodology for calculating peak-season costs was flawed and did not produce reliable estimates. It also concluded that the existing cost-attribution framework already accounted for the costs caused by competitive products during the peak season. The Commission explained that the Postal Service's costing models, which use an incremental-cost approach, appropriately attribute costs to competitive products and that the remaining costs are correctly treated as institutional costs.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court upheld the Commission's decision, finding that the Commission's rejection of UPS's methodology was reasonable and well-explained. The court noted that the Commission had addressed UPS's concerns about the Postal Service's costing models and had initiated further proceedings to explore potential updates to the models. The court also rejected UPS's argument that the Commission failed to consider whether peak-season costs are institutional costs uniquely associated with competitive products, noting that this issue was not properly presented in this case.The court denied UPS's petition for review, affirming the Commission's orders. View "United Parcel Service, Inc. v. PRC" on Justia Law

F.C. Bloxom Company, a Seattle-based distributor of fresh produce, entered into an agreement with Seven Seas Fruit to deliver three loads of onions to Honduras. The onions required phytosanitary certificates from the U.S. Department of Agriculture to clear Honduran customs, but the parties did not explicitly discuss who would procure these certificates. Bloxom believed Seven Seas would handle it, based on past practices and vague assurances. However, the onions were shipped without the necessary certificates, leading to their rejection in Honduras and eventual spoilage upon return to the U.S.Seven Seas initiated administrative proceedings under the Perishable Agricultural Commodities Act (PACA) when Bloxom refused to pay for the onions. The Secretary of Agriculture ruled in favor of Seven Seas, finding no evidence that Seven Seas had agreed to procure the certificates. Bloxom appealed to the U.S. District Court for the Central District of Illinois, which granted summary judgment for Seven Seas. The court found that Bloxom had accepted the onions at the Port of Long Beach and did not revoke that acceptance, thus obligating Bloxom to pay for the onions.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that Bloxom had accepted the onions by shipping them to Honduras and did not revoke this acceptance even after learning the certificates were missing. The court also found no abuse of discretion in the district court's denial of Bloxom's request for additional discovery time, as further discovery would not have changed the outcome. The court concluded that Bloxom was liable for the payment under PACA. View "F.C. Bloxom Company v. Tom Lange Company International, Inc." on Justia Law

WasteXperts, Inc. (WasteXperts) filed a complaint against Arakelian Enterprises, Inc. dba Athens Services (Athens) and the City of Los Angeles (City) in June 2022. WasteXperts alleged that Athens, which holds a waste collection franchise from the City, sent a cease and desist letter to WasteXperts, arguing that WasteXperts was not legally permitted to handle Athens’s bins. WasteXperts sought judicial declarations regarding the City’s authority and Athens’s franchise rights, and also asserted tort claims against Athens for interference with contract, interference with prospective economic advantage, unfair competition, and trade libel.The Superior Court of Los Angeles County granted Athens’s anti-SLAPP motion to strike the entire complaint, finding that the claims were based on Athens’s communications, which anticipated litigation and were therefore protected activity. The court also held that the commercial speech exemption did not apply and that WasteXperts had no probability of prevailing on the merits of its claims. WasteXperts’s request for limited discovery was denied.The California Court of Appeal, Second Appellate District, Division Four, reversed the trial court’s order. The appellate court concluded that the declaratory relief claim did not arise from protected activity, as it was based on an existing dispute over the right to move waste collection bins, not on the prelitigation communications. The court also found that the commercial speech exemption applied to Athens’s communications with WasteXperts’s clients, removing those communications from the protection of the anti-SLAPP statute. Consequently, the tort claims did not arise from protected activity. The appellate court did not address the probability of WasteXperts prevailing on the merits or the request for limited discovery. View "Wastexperts, Inc. v. Arakelian Enterprises, Inc." on Justia Law

The case involves two Georgia non-profit organizations, New Georgia Project and New Georgia Project Action Fund (collectively referred to as "New Georgia"), and the Georgia Government Transparency and Campaign Finance Commission. New Georgia was accused of violating the Georgia Government Transparency and Campaign Finance Act by failing to register with the Commission and disclose their campaign expenditures and sources. The Commission initiated an investigation and found "reasonable grounds" to conclude that New Georgia had violated the Act.New Georgia then filed a federal lawsuit claiming that the Act violated the First and Fourteenth Amendments. The district court granted a preliminary injunction preventing the state from enforcing the Act against New Georgia. The state appealed, arguing that the district court should have abstained from exercising its jurisdiction under the doctrine established in Younger v. Harris.The United States Court of Appeals for the Eleventh Circuit held that the district court should have abstained under the Younger doctrine. The court found that the state's enforcement action against New Georgia was ongoing and implicated important state interests, and that New Georgia had an adequate opportunity in the state proceeding to raise constitutional challenges. The court vacated the district court's decision and remanded with instructions to dismiss New Georgia's action. View "New Georgia Project, Inc. v. Attorney General" on Justia Law

In 2021, Florida and Texas enacted statutes regulating large social-media companies and other internet platforms. The laws curtailed the platforms' ability to engage in content moderation and required them to provide reasons to a user if they removed or altered her posts. NetChoice LLC, a trade association whose members include Facebook and YouTube, brought First Amendment challenges against the two laws. District courts in both states entered preliminary injunctions.The Eleventh Circuit upheld the injunction of Florida’s law, holding that the state's restrictions on content moderation trigger First Amendment scrutiny. The court concluded that the content-moderation provisions are unlikely to survive heightened scrutiny. The Fifth Circuit, however, disagreed and reversed the preliminary injunction of the Texas law. The court held that the platforms’ content-moderation activities are “not speech” at all, and so do not implicate the First Amendment.The Supreme Court of the United States vacated the judgments and remanded the cases, stating that neither the Eleventh Circuit nor the Fifth Circuit conducted a proper analysis of the facial First Amendment challenges to Florida and Texas laws regulating large internet platforms. The Court held that the laws interfere with protected speech, as they prevent the platforms from compiling the third-party speech they want in the way they want, thus producing their own distinctive compilations of expression. The Court also held that Texas's asserted interest in correcting the mix of viewpoints that major platforms present is not valid under the First Amendment. View "Moody v. NetChoice, LLC" on Justia Law