Justia Government & Administrative Law Opinion Summaries

The appellant, an experienced foreign currency exchange (FX) trader, claimed he uncovered manipulation in the FX market after noticing a sharp drop in the values of several currencies relative to the Swiss franc in 2011. He believed this was due to collusion among market makers and shared his suspicions with various regulators, including the Commodity Futures Trading Commission (CFTC). His allegations focused on conduct by a retail trading platform, Oanda, and mentioned possible involvement by banks but did not name any specific institutions. Two years later, media reports surfaced about large banks rigging FX benchmark rates, prompting the CFTC to investigate and eventually reach settlements with several banks for manipulating benchmark rates.The CFTC initially investigated the appellant’s allegations against Oanda but found no evidence of wrongdoing and closed the case without action. The CFTC’s later enforcement actions against major banks were initiated after media coverage revealed benchmark-rate manipulation schemes, not because of the appellant’s information. After the settlements were announced, the appellant applied for a whistleblower award, arguing his tips had led to these enforcement actions. The CFTC’s Whistleblower Office and Claims Review Staff recommended denial, finding his tips were not the original source of the information leading to the enforcement actions. The appellant sought reconsideration and, after a delay, petitioned for mandamus relief in the United States Court of Appeals for the District of Columbia Circuit, which was rendered moot when the Commission issued final orders denying his application.The United States Court of Appeals for the District of Columbia Circuit reviewed the CFTC’s denial for arbitrariness or capriciousness. The court found that the appellant’s tips did not lead to or significantly contribute to the enforcement actions against the banks, nor was he the original or derivative source of the information used. The court affirmed the CFTC’s orders denying the whistleblower award. View "Kitchen v. Commodity Futures Trading Commission" on Justia Law

This case involves a challenge to the approval by the U.S. Securities and Exchange Commission (“SEC”) of a new options trading exchange, IEX Options, proposed by Investors Exchange LLC (“IEX”). The dispute centers on IEX’s plan to introduce a 350-microsecond “speedbump” delay and a software mechanism called the Options Quote Indicator and Options Risk Parameter (“ORP”), designed to detect and mitigate “latency arbitrage.” Latency arbitrage occurs when high-frequency traders exploit tiny delays in the updating of quotes across exchanges, resulting in significant profits for these traders and increased costs for market makers and investors. IEX’s system aims to limit this practice by slowing the entry of incoming orders and repricing or canceling stale quotes when rapid price changes are detected, a model previously approved for equities trading.After IEX submitted its proposal, the SEC solicited public comment and received input from market makers, institutional investors, and competitors. The SEC approved the proposal, finding that it was consistent with the Securities Exchange Act and did not unfairly discriminate or impose undue burdens on competition. The SEC also determined that quotes subject to IEX’s ORP qualified as “protected” quotations under the Options Order Protection and Locked/Crossed Market Plan. Citadel Securities LLC (“Citadel”), a major market maker and high-frequency trader, petitioned the U.S. Court of Appeals for the Eleventh Circuit for review, arguing that the SEC’s approval was arbitrary and capricious and that the IEX system did not meet legal requirements.The United States Court of Appeals for the Eleventh Circuit reviewed the SEC’s approval under the Administrative Procedure Act’s arbitrary-and-capricious standard. The court held that substantial evidence supported the SEC’s findings about the existence and harm of latency arbitrage in the options market and the effectiveness of IEX’s ORP. The court also concluded that IEX’s quotes were legally “protected,” the SEC’s approval was neither unfairly discriminatory nor unduly burdensome on competition, and denied Citadel’s petition. View "Citadel Securities LLC v. Securities and Exchange Commission" on Justia Law

A nonprofit organization focused on reducing consumer exposure to chemical toxins alleged that two companies selling dietary supplements violated California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). The nonprofit, through its law firm, sent the required pre-suit notice to the companies, public prosecutors, and the Attorney General. The notice identified the nonprofit and its chief executive officer but did not expressly provide the address and telephone number of a responsible individual within the organization, instead listing only the law firm’s contact information. The nonprofit later filed suit seeking civil penalties and injunctive relief.The Superior Court of Alameda County granted the defendants’ motion for judgment on the pleadings, finding that the pre-suit notice did not strictly comply with the relevant regulation, which requires the name, address, and telephone number of the noticing individual or a responsible individual within the noticing entity. The trial court held that providing only an officer’s name and the law firm’s contact information was insufficient, and entered judgment for the defendants.The California Court of Appeal, First Appellate District, Division Two, reviewed the matter de novo. The appellate court concluded that the doctrine of substantial compliance applies to the statutory and regulatory pre-suit notice requirements under Proposition 65. The court held that, although the notice did not literally meet every technical requirement, it substantially complied by providing sufficient information for the defendants and public officials to assess and respond to the alleged violations. Accordingly, the appellate court reversed the judgment, directed the trial court to deny the motion for judgment on the pleadings, and ordered costs to the plaintiff. View "Chemical Toxin Working Group v. Best Naturals, Inc." on Justia Law

An individual disclosed information about significant misconduct at a large company to the news media. Following these disclosures, both Congress and staff from the Securities and Exchange Commission (SEC) contacted the individual for interviews and further information, which he provided. The SEC subsequently initiated an enforcement action against the company, relying on the information provided, resulting in substantial monetary sanctions. The individual then applied to the SEC for a whistleblower award under the Securities Exchange Act, which provides monetary awards to those who “voluntarily” provide “original information” leading to successful enforcement actions.The SEC denied the whistleblower award application, finding that the individual’s submission was not “voluntary” because it occurred only after the SEC and other authorities had contacted him. Additionally, the SEC found his submission was untimely and summarily denied his request for exemptions from these requirements. The individual challenged these determinations, arguing that the SEC’s interpretation of “voluntarily” conflicted with the statute's purpose and plain meaning, that his submission was timely, and that the denial of his request for exemptions was insufficiently explained and inconsistent with SEC precedent. He also raised First Amendment concerns, suggesting the SEC’s approach penalized whistleblowers for speaking to the press.The United States Court of Appeals for the District of Columbia Circuit reviewed the SEC’s order. The court held that the SEC’s interpretation of “voluntarily” was reasonable and consistent with statutory text and purpose, and rejected the First Amendment argument, finding it was based on a mistaken premise. However, the court found that the SEC abused its discretion by inadequately explaining its denial of the request for an exemption from the voluntariness requirement. The court thus denied the petition in part, granted it in part, vacated the denial of the exemption request, and remanded to the SEC for further consideration. View "Doe v. SEC" on Justia Law

Minority shareholders of an Argentine oil and gas company, previously privatized in 1993, became involved in litigation after the Argentine government expropriated a majority stake in the company in 2012. The government’s acquisition of shares was conducted without making a public tender offer to minority shareholders, a process that was explicitly required by the company’s bylaws to protect such shareholders in the event of a takeover. The plaintiffs, consisting of Spanish entities and a New York hedge fund, had acquired significant stakes in the company, and after the expropriation, they claimed that they suffered substantial financial losses due to the government’s failure to comply with the tender offer requirement.The plaintiffs sued in the United States District Court for the Southern District of New York, asserting breach of contract and promissory estoppel claims under Argentine law against both the Argentine Republic and the company. After extensive litigation, the district court found in favor of the plaintiffs on their breach of contract claims against the Argentine Republic, awarding over $16 billion in damages, but granted summary judgment to the company, finding it had no obligation to enforce the tender offer provision. The court also dismissed the promissory estoppel claims.On appeal, the United States Court of Appeals for the Second Circuit held that the plaintiffs' breach of contract damages claims against the Argentine Republic and the company were not cognizable under Argentine law, reasoning that the bylaws did not create enforceable bilateral obligations between shareholders and that Argentine public law governing expropriation precluded such claims. The court affirmed the dismissal of the promissory estoppel claims and judgment in favor of the company, but reversed the judgment against the Argentine Republic, remanding for further proceedings consistent with its opinion. View "Petersen Energía v. Argentine Republic" on Justia Law

Two development companies owned land in Johnson County, Texas, within the extraterritorial jurisdiction of the City of Mansfield but outside the city’s corporate boundaries. To develop this land, the companies needed access to retail water services, which, under state law, could be provided only by the Johnson County Special Utility District (“JCSUD”) because it held the exclusive certificate of convenience and necessity (CCN) for the area. However, a contract between JCSUD and the City of Mansfield required JCSUD to secure Mansfield’s written consent, which could be withheld at the City’s discretion, before providing water services within the city’s extraterritorial jurisdiction. The developers’ efforts to obtain water service were unsuccessful, as Mansfield demanded annexation and additional fees, ultimately refusing to formalize an agreement.After unsuccessful negotiations and attempts to compel service through the Texas Public Utility Commission, the developers sued the City of Mansfield in the United States District Court for the Northern District of Texas. They alleged violations of the Sherman Act and brought state-law claims. The district court, adopting a magistrate judge’s recommendation, dismissed the antitrust claims with prejudice, holding that Mansfield was entitled to state-action antitrust immunity under Texas law, and declined to exercise supplemental jurisdiction over the state-law claims.The United States Court of Appeals for the Fifth Circuit reviewed whether Mansfield was entitled to state-action immunity. The Fifth Circuit held that, although Texas law authorizes monopolies for water utilities through CCNs, it does not clearly articulate or authorize the City of Mansfield to act anticompetitively concerning the area in question, since the CCN belonged to JCSUD. Therefore, the court reversed the district court’s grant of state-action immunity and remanded the case for further proceedings. View "Megatel v. Mansfield" on Justia Law

Three nonprofit organizations filed a nationwide class action against the United States, alleging that the federal judiciary overcharged the public for access to court records through the PACER system. They claimed the government used PACER fees not only to fund the system itself but also for unrelated expenses, contrary to the statutory limits set by the E-Government Act. The plaintiffs sought refunds for allegedly excessive fees collected between 2010 and 2018.The United States District Court for the District of Columbia oversaw extensive litigation, including class certification and an interlocutory appeal. The United States Court of Appeals for the Federal Circuit previously affirmed that the district court had subject matter jurisdiction under the Little Tucker Act and that the government had used PACER fees for unauthorized expenses. After remand, the parties reached a settlement totaling $125 million. The district court approved the settlement, finding it fair, reasonable, and adequate under Rule 23 of the Federal Rules of Civil Procedure. The court also approved attorneys’ fees, administrative costs, and incentive awards to the class representatives. An objector, Eric Isaacson, challenged the district court’s jurisdiction, the fairness of the settlement, the attorneys’ fees, and the incentive awards.On appeal, the United States Court of Appeals for the Federal Circuit affirmed the district court’s judgment. The court held that the district court properly exercised jurisdiction under the Little Tucker Act because each PACER transaction constituted a separate claim, none exceeding the $10,000 jurisdictional limit. The appellate court found no abuse of discretion in approving the class settlement, the attorneys’ fees, or the incentive awards. The court also held that incentive awards are not categorically prohibited and are permissible if reasonable, joining the majority of federal circuits on this issue. The district court’s judgment was affirmed. View "NVLSP v. US " on Justia Law

After the Texas Legislature enacted a law banning certain medical treatments for minors for the purpose of gender transition, PFLAG, Inc., a nonprofit organization with Texas members, became involved in litigation challenging the law. During this litigation, PFLAG’s executive director submitted an affidavit describing, among other things, how families sought “alternative avenues to maintain care” for transgender youth in Texas. The Office of the Attorney General, suspecting that some medical providers might be concealing violations of the new law through deceptive billing practices, issued a civil investigative demand (CID) to PFLAG seeking documents underlying the affidavit and related information. PFLAG declined to produce the documents and instead petitioned the 261st Judicial District Court in Travis County to set aside or modify the CID. The Attorney General subsequently narrowed the scope of the CID to exclude identifying information of PFLAG’s members and focused the requests more closely on the affidavit’s content.The district court granted a temporary restraining order and, after a trial, issued a final declaratory judgment and injunction largely protecting PFLAG from producing the requested documents. The district court focused its analysis on the original, broader CID and found that the Attorney General lacked a valid basis to believe PFLAG possessed relevant information. The court also concluded that the CID infringed on constitutional rights and failed to comply with statutory requirements.On direct appeal, the Supreme Court of Texas held that the district court erred in analyzing only the original CID and not the revised version. The Supreme Court clarified that the Attorney General’s statutory authority to issue a CID requires only a reasonable belief, not proof, that the recipient may have relevant material. The Court found the Attorney General’s belief reasonable given the content of the affidavit and ruled that PFLAG must produce most responsive documents, subject to privilege and redaction of identifying information. The district court’s order was reversed and the case remanded for further proceedings consistent with this opinion. View "OFFICE OF THE ATTORNEY GENERAL v. PFLAG, INC." on Justia Law

A Mississippi retail pharmacy, Rx Solutions, Inc., sought to join the pharmacy benefit management (PBM) network operated by Caremark, LLC, which is associated with CVS Pharmacy, Inc. Caremark denied Rx Solutions’ application, citing inconsistencies in ownership information and affiliations with Quest Pharmacy, owned by Harold Ted Cain, who Caremark claimed was previously found guilty of violating the False Claims Act. Rx Solutions disputed these reasons, noting acceptance by other PBM networks and asserting that Harold Ted Cain lacked operational control over Rx Solutions and had not been convicted of any relevant criminal offense.Rx Solutions filed suit in the United States District Court for the Southern District of Mississippi, alleging two federal antitrust violations under the Sherman Act and three state law claims: violation of Mississippi’s “any willing provider” statute, violation of the state antitrust statute, and tortious interference with business relations. The district court dismissed the federal antitrust and state statutory claims, concluding that Rx Solutions failed to adequately define relevant product and geographic markets and did not allege antitrust injury. The court also determined there was no diversity jurisdiction to support the remaining state law claims and declined to exercise supplemental jurisdiction.The United States Court of Appeals for the Fifth Circuit affirmed the district court’s dismissal of the federal antitrust and Mississippi state antitrust claims, holding that Rx Solutions did not sufficiently plead a relevant market or antitrust injury. However, the Fifth Circuit reversed the district court’s finding regarding diversity jurisdiction, based on admissions by Caremark and CVS establishing complete diversity between the parties. The appellate court affirmed the dismissal of the state antitrust claim and remanded the claims under Mississippi’s “any willing provider” statute and for tortious interference with business relations for further proceedings. View "Rx Solutions v. Caremark" on Justia Law

A nonprofit organization that publishes content critical of United States immigration policy was issued a subpoena by the New York Attorney General’s office seeking documents related to its governance, finances, and relationships with vendors and contractors. The organization alleged that the subpoena was motivated by a desire to suppress its viewpoints and thus violated its rights under the First Amendment and the New York State Constitution. The Attorney General, however, maintained that the investigation was prompted by concerns about possible self-dealing and regulatory noncompliance.After the subpoena was issued, the nonprofit partially responded but maintained objections. It then filed a federal lawsuit seeking damages and an injunction against enforcement of the subpoena, claiming the subpoena was retaliatory and unconstitutional. Shortly thereafter, the Attorney General initiated a special proceeding in New York State Supreme Court to compel compliance. The organization moved to dismiss or stay the state proceeding, raising constitutional arguments. The state court ruled against the nonprofit, ordering compliance with the subpoena (with some redactions allowed), and the New York Appellate Division, First Department affirmed. The New York Court of Appeals dismissed a further appeal.The United States District Court for the Northern District of New York denied the nonprofit’s request for a preliminary injunction and dismissed the federal claims, holding that they were precluded by the earlier state court judgment under the doctrine of res judicata. The United States Court of Appeals for the Second Circuit affirmed the district court’s judgment, holding that the state court’s decision was final and on the merits, involved the same parties and subject matter, and therefore barred the federal claims. The court also dismissed as moot the appeal of the denial of preliminary injunctive relief. View "VDARE Foundation, Inc. v. James" on Justia Law