Justia Government & Administrative Law Opinion Summaries

Dr. Fares Jeries Rabadi, a licensed physician in California, had his certificate of registration to dispense controlled substances revoked by the Drug Enforcement Administration (DEA). The DEA initiated an investigation into Rabadi in April 2018 due to his high-risk prescribing practices. In March 2020, the DEA issued an Order to Show Cause and Immediate Suspension of Registration, alleging that Rabadi issued numerous prescriptions for controlled substances outside the usual course of professional practice and not for a legitimate medical purpose to seven individuals. Rabadi requested a hearing before an administrative law judge (ALJ), which took place in September 2020. The ALJ found Rabadi's testimony not credible and recommended revoking his registration. The DEA Administrator adopted the ALJ's recommendations with minor modifications and revoked Rabadi's registration.Rabadi petitioned for review, arguing that the DEA's revocation was invalid because DEA ALJs are unconstitutionally insulated from removal by two layers of "for-cause" protections. The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that Rabadi's argument failed under Decker Coal Co. v. Pehringer, which found similar ALJ removal protections constitutional. The court noted that DEA ALJs perform purely adjudicatory functions, Congress does not mandate the use of ALJs for DEA hearings, and DEA ALJ decisions are reviewed de novo by the DEA Administrator, who is removable at will by the President.Rabadi also argued that the DEA Administrator's order was arbitrary and capricious. The court rejected this argument, finding that the Administrator properly ignored Rabadi's unsupported defense regarding high dosages of prescribed drugs and appropriately analyzed the public interest factors, including Rabadi's lack of a conviction record. The Ninth Circuit denied Rabadi's petition for review, upholding the DEA Administrator's order. View "RABADI V. USDEA" on Justia Law

The case involves six plaintiffs who are users of Tornado Cash, a cryptocurrency mixing service that uses immutable smart contracts to anonymize transactions. Tornado Cash was sanctioned by the Office of Foreign Assets Control (OFAC) under the International Emergency Economic Powers Act (IEEPA) for allegedly facilitating money laundering for malicious actors, including North Korea. The plaintiffs argued that OFAC exceeded its statutory authority by designating Tornado Cash as a Specially Designated National (SDN) and blocking its smart contracts.The United States District Court for the Western District of Texas granted summary judgment in favor of the Department of the Treasury, finding that Tornado Cash is an entity that can be sanctioned, that its smart contracts constitute property, and that the Tornado Cash DAO has an interest in these smart contracts. The plaintiffs appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and focused on whether the immutable smart contracts could be considered "property" under IEEPA. The court concluded that these smart contracts are not property because they are not capable of being owned, controlled, or altered by anyone, including their creators. The court emphasized that property, by definition, must be ownable, and the immutable smart contracts do not meet this criterion. Consequently, the court held that OFAC exceeded its statutory authority by sanctioning Tornado Cash's immutable smart contracts.The Fifth Circuit reversed the district court's decision and remanded the case with instructions to grant the plaintiffs' motion for partial summary judgment based on the Administrative Procedure Act. The court did not address whether Tornado Cash qualifies as an entity or whether it has an interest in the smart contracts, as the determination that the smart contracts are not property was dispositive. View "Van Loon v. Department of the Treasury" on Justia Law

In June 2019, the petitioner's 13-year-old daughter, T., disclosed to a friend, a teacher, a police officer, and a caseworker from the New York City Administration for Children's Services (ACS) that the petitioner had struck her with an extension cord. The caseworker took photographs of T.'s injuries, and a physician confirmed that the injuries were consistent with being struck by an extension cord. ACS initiated a Family Court article 10 neglect proceeding against the petitioner and her husband. The Family Court authorized an adjournment in contemplation of dismissal (ACD), and the case was dismissed in February 2020 after the petitioner complied with the court's conditions.The police officer reported the incident to the Statewide Central Register of Child Abuse and Maltreatment (SCR). In July 2019, ACS determined the report against the petitioner was indicated. The petitioner challenged this determination, but the New York State Office of Children and Family Services (OCFS) upheld it after an internal review. A fair hearing was held in August 2020, and OCFS concluded that the allegations were substantiated by a fair preponderance of the evidence.The petitioner then commenced a CPLR article 78 proceeding to challenge OCFS's determination. The Supreme Court transferred the proceeding to the Appellate Division, which confirmed OCFS's determination, denied the petition, and dismissed the proceeding. The Appellate Division held that the petitioner had no constitutional right to assigned counsel during the SCR hearing and that the statutory changes to Social Services Law § 422 did not apply retroactively.The New York Court of Appeals affirmed the Appellate Division's decision. The Court held that the petitioner had no constitutional right to assigned counsel during the SCR administrative hearing. It also concluded that the statutory amendments to Social Services Law § 422 (8) (b) (ii) did not apply retroactively to OCFS determinations rendered before the effective date of the amendments. The Court further held that OCFS's determination was supported by substantial evidence. View "Matter of Jeter v. Poole" on Justia Law

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

Mark Johnson sued the Clarksdale Public Utilities Authority (CPU) and its members in federal district court, alleging he was fired for reporting inefficiency and incompetence to the state auditor. His initial complaint asserted retaliation under the Mississippi Whistleblower Protection Act (MWPA), later amended to include First Amendment retaliation and breach of contract. The defendants moved for judgment on the pleadings, which the district court granted, holding that Johnson failed to comply with the Mississippi Tort Claims Act (MTCA) notice requirements and that the MWPA claim was barred by the MTCA’s one-year statute of limitations. The court also found Johnson’s First Amendment and breach-of-contract claims time-barred.The United States Court of Appeals for the Fifth Circuit reviewed the case, focusing on whether the MTCA’s procedural requirements apply to MWPA claims. The defendants argued that the MTCA’s broad application and limited immunity waiver necessitate compliance with its procedural requirements for MWPA claims. Johnson countered that the MWPA provides a separate right to monetary relief and should not be subject to the MTCA’s requirements.The Supreme Court of Mississippi reviewed the certified question from the Fifth Circuit. The court concluded that the MWPA is a remedial statute separate from the MTCA. The MWPA does not prescribe a statute of limitations or notice requirement, and the reference to the MTCA’s damages cap does not incorporate its procedural requirements. Therefore, the court held that MWPA claims are not subject to the MTCA’s statute of limitations and notice requirements. The certified question was answered accordingly. View "Johnson v. Miller" on Justia Law

Robert Mann, a taxpayer, filed a lawsuit against the State of California and the California Highway Patrol (CHP), challenging CHP’s vehicle impound policies. Mann argued that the impoundment of vehicles without a warrant and inadequate notice procedures constituted illegal expenditures of public funds. He sought declaratory and injunctive relief to prevent what he characterized as wasteful, unlawful, and unconstitutional law enforcement policies. The trial court granted a permanent injunction requiring CHP to consider vehicle owners’ ability to pay towing and storage fees during impound hearings and vehicle release procedures, and to revise its notice form to advise owners of procedures for retrieving impounded vehicles.The Superior Court of Los Angeles County initially reviewed the case. At the close of the plaintiffs’ case, the trial court granted a motion for judgment against Youth Justice Coalition and entered judgment in favor of defendant Warren A. Stanley, who had retired before the trial. The court found that Stanley, as a former public officer, was no longer a proper defendant. The trial court issued a permanent injunction requiring CHP to revise its vehicle impound procedures, including considering the ability to pay and revising notice forms.The Court of Appeal of the State of California, Second Appellate District, Division Two, reviewed the case. The court reversed the trial court’s judgment, holding that the injunction improperly required CHP to contravene valid statutes, relied on inapplicable case law, conflicted with the existing statutory scheme, and mandated unnecessary revisions to its notice procedures. The appellate court concluded that the trial court erred in requiring CHP to conduct ability-to-pay hearings and revise its notice forms, as these requirements were not mandated by due process and conflicted with statutory provisions. The judgment was reversed, and costs on appeal were awarded to the appellant. View "Mann v. State" on Justia Law

The case involves a group of appellants, including individual citizens, CeaseFirePA, and the City of Philadelphia, who challenged two Pennsylvania statutes that prevent local governments from enacting their own firearms regulations. The appellants argue that these statutes, Section 6120 of the Pennsylvania Uniform Firearms Act and Section 2962(g) of the Home Rule Charter and Optional Plans Law, hinder their ability to address gun violence effectively at the local level.The Commonwealth Court previously reviewed the case and dismissed the appellants' petition, sustaining preliminary objections for failure to state a claim. The court found that the appellants did not sufficiently allege violations of substantive due process under Article I, Section 1 of the Pennsylvania Constitution, the state-created danger doctrine, or improper interference with Philadelphia's delegated duties under the Local Health Administration Law and the Disease Prevention and Control Law of 1955.The Supreme Court of Pennsylvania reviewed the case and affirmed the Commonwealth Court's decision. The court held that the appellants failed to identify a constitutionally protected right that the statutes infringed upon, thus failing to establish a substantive due process claim. The court also concluded that the appellants did not meet the elements required to establish a state-created danger claim, particularly the requirement that the harm caused was foreseeable and fairly direct. Lastly, the court determined that the statutes did not interfere with Philadelphia's delegated public health responsibilities, as the relevant laws did not implicitly or explicitly authorize local firearm regulation.In summary, the Supreme Court of Pennsylvania affirmed the dismissal of the appellants' petition, upholding the statutes that preempt local firearm regulations. View "Crawford v. Commonwealth" on Justia Law

In this case, Appalachian Power Company and Wheeling Power Company sought to recover approximately $552.9 million in under-recovered costs for the period from March 1, 2021, through February 28, 2023. The Public Service Commission of West Virginia disallowed $231.8 million of the requested amount, concluding that the companies had made imprudent and unreasonable decisions regarding their coal stockpiling, which led to higher costs from purchasing energy rather than generating it themselves. The Commission allowed the recovery of the remaining $321.1 million over a ten-year period with a 4% carrying charge.The Commission's decision followed a series of proceedings, including the 2021 and 2022 ENEC cases, where it had expressed concerns about the companies' reliance on purchased power and their failure to maintain adequate coal supplies. The Commission had previously ordered the companies to increase self-generation and maintain a minimum 69% capacity factor for their coal-fired plants. Despite these directives, the companies continued to rely heavily on purchased power, leading to significant under-recoveries.The Supreme Court of Appeals of West Virginia reviewed the case and affirmed the Commission's finding that the companies acted imprudently and unreasonably. However, the Court reversed the Commission's disallowance of $231.8 million, finding that the Commission had relied on extra-record evidence (coal reports) without giving the companies notice or an opportunity to address this evidence, thus violating their due process rights. The Court remanded the case to the Commission to allow the companies to address the coal reports and the calculation of the disallowance. View "Appalachian Power Company and Wheeling Power Company v. Public Service Commission of West Virginia" on Justia Law

Laura Marie Obert, a former Broadwater County Commissioner, was investigated by the Montana Department of Justice Division of Criminal Investigation (DCI) in 2015 for allegedly receiving unlawful overtime pay and potential ethics violations. In 2016, Obert entered a deferred prosecution agreement with the Assistant Attorney General, agreeing to repay the excess wages and abstain from voting on matters where she had a conflict of interest. In 2019, based on new allegations of violating the agreement, Obert was charged with felony theft and misdemeanor official misconduct. The district court dismissed these charges in 2021, finding Obert had complied with the agreement and there was insufficient evidence for the misconduct charge.Obert then sued the State of Montana and Broadwater County Attorney Cory Swanson, alleging breach of contract, bad faith, due process violations, and malicious prosecution. The First Judicial District Court dismissed her claims, leading to this appeal.The Montana Supreme Court reviewed the case and made several determinations. It reversed the lower court's dismissal of Obert's breach of contract and good faith and fair dealing claims, holding that these claims were not time-barred and did not accrue until the criminal charges were dismissed. However, the court affirmed the dismissal of Obert's bad faith claim, finding no special relationship existed between Obert and the State that would support such a claim. The court also upheld the dismissal of the malicious prosecution claim, ruling that Swanson was protected by prosecutorial immunity as he acted within his statutory duties. Lastly, the court affirmed the dismissal of the due process claim, concluding that Obert's procedural due process rights were not violated as the State followed proper procedures in charging her and the district court provided an appropriate forum to address the alleged breach of the agreement. View "Obert v State" on Justia Law

the State of Missouri bears no legal liability for any judgment against MOHELA. The Act makes clear that MOHELA’s debts and obligations are not debts or obligations of the State. See MO. REV. STAT. § 173.410. This includes any judgments against MOHELA. The State’s lack of legal liability for MOHELA’s debts and judgments is a strong indicator that MOHELA’s finances are independent from the State’s. See Hess, 513 U.S. at 51; Duke, 127 F.3d at 978.In sum, the third Steadfast factor weighs against arm-of-the-state status. MOHELA receives no direct financial assistance from the State, has the ability to generate its own revenue, retains control over its own funds, and the State bears no legal liability for MOHELA’s debts or judgments.d. Factor Four: State or Local AffairsThe fourth Steadfast factor considers whether the entity is concerned primarily with state or local affairs. This factor examines the entity’s function, composition, and purpose. See Hennessey, 53 F.4th at 528; Steadfast, 507 F.3d at 1253. Here, the district court concluded that this factor weighed in favor of arm-of-the-state status, and we agree.MOHELA’s primary function is to help Missourians access student loans needed to pay for college. See MO. REV. STAT. § 173.360. This is a statewide concern, not a local one. MOHELA’s activities are not confined to any particular locality within Missouri; rather, they are intended to benefit residents across the entire state. See Biden, 143 S. Ct. at 2366 (noting that MOHELA was established to perform the “essential public function” of helping Missourians access student loans).Moreover, MOHELA’s board is composed of members appointed by the Governor and representatives from state agencies, further indicating that its focus is on statewide, rather than local, affairs. See MO. REV. STAT. § 173.360. The fact that MOHELA’s profits are used to fund education in Missouri, including providing grants and scholarships for Missouri students, also supports the conclusion that MOHELA is concerned with state affairs. See Biden, 143 S. Ct. at 2366.In conclusion, the fourth Steadfast factor weighs in favor of arm-of-the-state status.3. The Second Step of the Arm-of-the-State Test: The Twin Goals of the Eleventh AmendmentBecause the Steadfast factors point in different directions, we proceed to the second step of the Hennessey test and consider the twin goals underlying the Eleventh Amendment: avoiding an affront to the dignity of the state and the impact of a judgment on the state treasury. See Hennessey, 53 F.4th at 528.As discussed above, the State of Missouri bears no legal liability for any judgment against MOHELA. This means that a judgment against MOHELA would not impact the state treasury. See Hess, 513 U.S. at 51; Duke, 127 F.3d at 978. The lack of impact on the state treasury is a strong indicator that MOHELA is not an arm of the state. See Hennessey, 53 F.4th at 528.Regarding the dignity of the state, MOHELA operates with substantial autonomy and is financially independent from the State. The State has not clearly demarcated MOHELA as sharing its sovereignty. See Hennessey, 53 F.4th at 529. Therefore, treating MOHELA as an arm of the state would not accord with the dignity interests protected by the Eleventh Amendment.In conclusion, considering the twin goals of the Eleventh Amendment, we determine that MOHELA is not an arm of the state entitled to Eleventh Amendment immunity. Accordingly, we reverse the district court’s judgment and remand for further proceedings consistent with this opinion. View "Good v. United States Department of Education" on Justia Law