Justia Government & Administrative Law Opinion Summaries

A police officer employed by the Metropolitan Police Department experienced a data breach that exposed sensitive information of numerous employees. In response, the officer filed a putative class action in Superior Court for the District of Columbia, naming the District, certain government entities, and several private technology contractors as defendants. The complaint alleged that the defendants failed to safeguard employees’ data.During the proceedings, the plaintiff voluntarily dismissed certain contractor defendants without prejudice, leaving the government defendants and a few contractors. The Superior Court of the District of Columbia granted the District’s motion to dismiss, ruling that the Metropolitan Police Department and the Office of the Chief Technology Officer could not be sued as unincorporated government bodies, and that sovereign immunity barred the claims against the District. The plaintiff’s motion for reconsideration was denied. Subsequently, the plaintiff voluntarily dismissed without prejudice the remaining private contractor defendants and asked the Superior Court to close the case. The Superior Court closed the case, prompting the plaintiff to appeal both the dismissal of her claims against the District and the denial of reconsideration.The District of Columbia Court of Appeals reviewed the case. It held that because the plaintiff dismissed her claims against the final contractor defendants without prejudice, the trial court’s order was not final as to all parties and claims. The court explained that dismissals without prejudice do not resolve the merits and thus do not confer appellate jurisdiction, except in rare circumstances. The Court of Appeals dismissed the appeal for lack of jurisdiction, as the order below was not a final, appealable order. View "Moore v. District of Columbia" on Justia Law

Intuit, Inc., the seller of TurboTax tax-preparation software, advertised its “Free Edition” as available at no cost for “simple tax returns.” However, the majority of taxpayers did not qualify due to various exclusions, and those individuals were prompted during the tax preparation process to upgrade to paid products. The Federal Trade Commission (FTC) brought an administrative complaint in 2022, alleging that these advertisements were deceptive under Section 5 of the FTC Act. After an initial federal court suit for a preliminary injunction was denied, the FTC pursued the matter through its internal adjudicative process instead.An Administrative Law Judge (ALJ) concluded that Intuit’s advertisements were likely to mislead a significant minority of consumers. The FTC Commissioners affirmed this decision, issuing a broad cease-and-desist order that barred Intuit from advertising “any goods or services” as free unless it met stringent requirements. This order was not limited to tax-preparation products. Intuit petitioned the United States Court of Appeals for the Fifth Circuit for review, asserting, among other arguments, that the FTC’s adjudication of deceptive advertising claims through an ALJ, rather than an Article III court, was unconstitutional.The United States Court of Appeals for the Fifth Circuit held that deceptive advertising claims under Section 5 of the FTC Act are akin to traditional actions at law or equity, such as fraud and deceit, and thus involve private rights. According to recent Supreme Court precedent in SEC v. Jarkesy, such claims must be adjudicated in Article III courts, not by agency ALJs. The Fifth Circuit granted Intuit’s petition, vacated the FTC’s order, and remanded the case to the agency for further proceedings consistent with its holding. View "Intuit v. Federal Trade Commission" on Justia Law

A group of individuals who were victims of a Ponzi scheme obtained a default judgment for fraud against two corporations involved in the scheme. Unable to collect on this judgment, they each applied to the California Secretary of State for restitution from the Victims of Corporate Fraud Compensation Fund, which compensates victims when a corporation’s fraud leads to uncollectible judgments. The Secretary denied their claims, arguing primarily that the underlying fraud lawsuit had been filed after the statute of limitations had expired, making the judgment invalid for purposes of fund payment.The victims challenged the Secretary’s denial by filing a verified petition in the Superior Court of Orange County, seeking an order compelling payment from the fund. The Secretary maintained that the statute of limitations barred the underlying fraud claim, but the trial court disagreed. The court held that because the defendant corporations had defaulted and thus waived the statute of limitations defense in the original lawsuit, the Secretary could not raise that defense in the current proceeding. The trial court ordered payment from the fund to the victims in the amounts awarded in the underlying default judgment.On appeal, the California Court of Appeal, Fourth Appellate District, Division Three, affirmed in part and reversed in part. The appellate court clarified that under the statutory scheme, neither the Secretary nor the trial court may relitigate the merits of the underlying fraud claim, including whether it was time-barred. The court held that the trial court’s inquiry is limited to whether the claimant submitted a valid payment claim under the specific statutory requirements; it cannot revisit defenses such as the statute of limitations. However, the court found error in the trial court’s failure to cap payments at $50,000 per claimant as required by statute, and remanded the case for correction of this aspect of the order. View "Dion v. Weber" on Justia Law

A company was certified by the state regulator to operate as both a competitive retail electric and natural gas service provider. After receiving multiple consumer complaints, including allegations of unauthorized enrollments, deceptive sales practices, and improper telemarketing and door-to-door solicitation during a pandemic, the regulator initiated a formal investigation. The investigation uncovered evidence that the company and its vendors engaged in misleading marketing, falsified call recordings, forged consumer signatures, spoofed caller identification to appear as a utility or other trusted source, and failed to maintain required records. The company also solicited customers in violation of specific pandemic-related commission orders. The company argued that it lacked responsibility for vendors’ actions and had relied on the advice of counsel, and it challenged procedural aspects of the investigation.The Public Utilities Commission of Ohio conducted an evidentiary hearing and found the company had committed numerous violations of statutes and commission rules. It rescinded the company’s operating certificates, ordered it to cease operations in Ohio, imposed a $1.44 million forfeiture, and required the company to “rerate” affected consumers, providing restitution for the difference between the company’s rates and the utility’s default rates. The company’s application for rehearing was granted for further consideration but ultimately denied, and the company then appealed to the Supreme Court of Ohio.The Supreme Court of Ohio affirmed the rescission of the company’s operating certificates, holding that the commission provided adequate notice and opportunity for hearing and that the findings of statutory and rule violations were supported by the evidence. However, the court found the commission failed to sufficiently explain the basis for the forfeiture amount, violating statutory requirements for reasoned decision-making. The court also determined the rerating order was unclear as to which consumers were affected. The court reversed the forfeiture and rerating orders and remanded the matter for the commission to clarify and support its decisions. View "In re RPA Energy, Inc." on Justia Law

ARcare, Inc., a nonprofit community health center receiving federal funding, suffered a data breach in early 2022 when an unauthorized third party accessed confidential patient information, including names, social security numbers, and medical treatment details. After ARcare notified affected individuals, several patients filed lawsuits alleging that ARcare failed to adequately safeguard their information as required under federal law. Plaintiffs reported fraudulent invoices and that their information was found for sale on the dark web.The actions were removed to the United States District Court for the Eastern District of Arkansas, where six class actions were consolidated. ARcare sought to invoke absolute immunity under 42 U.S.C. § 233(a) of the Federally Supported Health Centers Assistance Act (FSHCAA), which provides immunity for damages resulting from the performance of “medical, surgical, dental, or related functions.” ARcare moved to substitute the United States as defendant under the Federal Tort Claims Act, arguing the data breach arose from a “related function.” The district court denied the motion, finding that protecting patient information from cyberattacks was not sufficiently linked to the provision of health care to qualify as a “related function” under the statute.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the statutory immunity issue de novo. The court affirmed the district court’s denial of immunity, holding that the FSHCAA’s language does not extend statutory immunity to claims arising from a health center’s data security practices. The court reasoned that “related functions” must be activities closely connected to the provision of health care, and data security is not such a function. Therefore, ARcare is not entitled to substitute the United States as defendant, and the denial of statutory immunity was affirmed. View "Hale v. ARcare, Inc" on Justia Law

A group of homeowners, all over the age of 65, entered into contracts for energy efficiency improvements to their homes under California's Property Assessed Clean Energy (PACE) program. This program allows local governments to offer financing for such improvements, with repayment made through voluntary special assessments added to the homeowners’ property tax bills. Most local governments contracted private companies to administer these PACE loans. The homeowners alleged that these private administrators failed to comply with consumer protection and lending laws applicable to consumer lenders, such as providing required warnings and avoiding prohibited security interests. They filed suit under the Unfair Competition Law, seeking injunctive relief and restitution, including the return of assessment monies paid and prohibitions on future collection of delinquent assessments unless the assessments were removed from their properties.The San Diego County Superior Court sustained the defendants’ demurrers, concluding that the plaintiffs were required to exhaust administrative tax remedies before pursuing their claims in court. The California Court of Appeal affirmed, reasoning that because PACE assessments are collected as part of property taxes and the relief sought would invalidate those assessments, plaintiffs first needed to pay the assessments and seek administrative relief through the established tax refund procedures.The Supreme Court of California reviewed the case to determine whether plaintiffs were required to follow statutory procedures for challenging taxes. The court held that when plaintiffs’ claims effectively seek to invalidate PACE assessments or prevent their future collection, they must first pay the assessments and pursue administrative tax remedies. However, the court also held that plaintiffs are not required to use tax challenge procedures for claims that do not directly or indirectly challenge a tax, such as those solely addressing the administration of the PACE program. The judgment was affirmed in part, reversed in part, and the case remanded to consider whether plaintiffs should be allowed to amend their complaints to state only non-tax-related claims. View "Morgan v. Ygrene Energy Fund, Inc." on Justia Law

A California nonprofit organization focused on preventing deceptive environmental claims filed a lawsuit against a manufacturer of feminine hygiene products. The organization alleged that the manufacturer labeled and advertised certain products, including period underwear, pads, and panty liners, as “organic” or “made with organic cotton” in violation of the California Organic Food and Farming Act (COFFA). The complaint stated that these products contained less than the minimum required percentage of certified organic materials and included nonagricultural and nonorganically produced components not permitted under state or federal organic standards.The case was first heard in the Alameda County Superior Court. The manufacturer moved for judgment on the pleadings, arguing that COFFA applies only to agricultural products, cosmetics, and pet food—not to personal care products such as feminine hygiene items. The Superior Court agreed with the manufacturer and granted judgment on the pleadings, concluding that COFFA did not govern the products in question. The nonprofit timely appealed that decision.The Court of Appeal of the State of California, First Appellate District, Division Two, reviewed the case de novo. The appellate court held that COFFA applies broadly to all products sold as “organic” or containing “organic” materials in California, unless specifically exempted, and that the statute’s plain language encompasses feminine hygiene products. The court found no basis for an implied exception for personal care products and determined that the trial court erred in its interpretation. Therefore, the appellate court reversed the trial court’s judgment, clarifying that COFFA’s standards and labeling requirements apply to the manufacturer’s products at issue. View "Environmental Democracy Project v. Rael" on Justia Law

The plaintiff resided at an apartment complex with his son, who was arrested for aggravated armed robbery by the local police department. After the arrest, the police informed the apartment management, which then evicted both the plaintiff and his son based on a lease provision prohibiting criminal conduct. The plaintiff sought information about his son’s arrest from the city and police department under the Texas Public Information Act, but his request was denied after the city consulted the Texas Attorney General and invoked a law-enforcement exception.In the United States District Court for the Southern District of Texas, the plaintiff filed suit against the city, the police department, the apartment complex, a debt collection agency, and the Texas Attorney General, alleging violations of the U.S. Constitution, the Fair Debt Collection Practices Act, and Texas law. All defendants either appeared, filed answers, or moved to dismiss. The plaintiff moved for default judgment against each defendant, but the district court denied those motions and granted the defendants’ motions to dismiss. On appeal, the plaintiff only challenged the denial of default judgment, as he did not brief arguments regarding the dismissals and thus forfeited them.The United States Court of Appeals for the Fifth Circuit reviewed only the denial of default judgment for abuse of discretion. The court held that default judgment was not warranted because the city, police department, and debt collector had all appeared or answered, and the Attorney General had not been properly served. The court also found that arguments regarding attorney conflict and judicial bias were either forfeited or unsupported. The Fifth Circuit affirmed the district court’s denial of default judgment. View "Clark v. City of Pasadena" on Justia Law

A group of grocery retailers and public interest organizations challenged federal regulations that established a national uniform disclosure standard for foods containing genetically modified ingredients. Congress had directed the Secretary of Agriculture to create this standard, which was delegated to the Agricultural Marketing Service (AMS). The AMS’s regulations, effective January 1, 2022, required certain foods to disclose if they were “bioengineered” or contained “bioengineered” ingredients, but generally excluded highly refined foods where genetically modified material was undetectable. Plaintiffs argued that this exclusion, the mandated use of the term “bioengineered” instead of more familiar terms like “GMO,” and the allowance of QR code and text-message disclosure options were unlawful or arbitrary under the Administrative Procedure Act (APA).The United States District Court for the Northern District of California granted summary judgment to the plaintiffs only on their challenge to the QR code and text-message disclosure options, remanding those provisions to the AMS without vacating them. The court denied summary judgment on all other claims, which the Ninth Circuit construed as a final judgment granting summary judgment to the AMS and intervenor-defendants on the remaining claims. Plaintiffs appealed.The United States Court of Appeals for the Ninth Circuit held that the plaintiffs had standing and that the AMS committed legal error by generally excluding highly refined foods from the definition of “bioengineered foods.” The court reversed the district court’s grant of summary judgment to the defendants on this issue, remanded with instructions to grant summary judgment to the plaintiffs, and directed the district court to determine whether any regulatory provisions should be vacated. The Ninth Circuit affirmed the district court’s rejection of the claim that the use of “bioengineered” was arbitrary and capricious, finding the agency’s choice reasonable. The court also held that the district court abused its discretion by not vacating the two disclosure-format regulations and directed prospective vacatur after further input from the parties. The judgment was otherwise affirmed. View "NATURAL GROCERS V. ROLLINS" on Justia Law

The case involved two related companies and three individuals who operated a business targeting immigrants detained by U.S. Immigration and Customs Enforcement (ICE) and eligible for release on immigration bonds. The companies marketed their services as an affordable way to secure release, but in reality, they charged high fees for services that were often misrepresented or not provided. The agreements were complex, mostly in English, and required significant upfront and recurring payments. Most consumers did not understand the terms and relied on the companies’ oral representations, which were deceptive. The business was not licensed as a bail bond agent or surety, and the defendants’ practices violated federal and state consumer protection laws.After the plaintiffs—the Consumer Financial Protection Bureau, Massachusetts, New York, and Virginia—filed suit in the United States District Court for the Western District of Virginia, the defendants repeatedly failed to comply with discovery obligations and court orders. They did not produce required documents, ignored deadlines, and failed to appear at hearings. The district court, after multiple warnings and opportunities to comply, imposed default judgment as a sanction for this misconduct. The court also excluded the defendants’ late-disclosed witnesses and exhibits from the remedies hearing, finding the nondisclosures unjustified and prejudicial.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s decisions. The Fourth Circuit held that the default judgment was an appropriate sanction for the defendants’ repeated and willful noncompliance. The exclusion of evidence and witnesses was also upheld, as was the issuance of a permanent injunction and the calculation of monetary relief, including restitution and civil penalties totaling approximately $366.5 million. The court found no abuse of discretion or legal error in the district court’s rulings and affirmed the final judgment in all respects. View "Consumer Financial Protection Bureau v. Nexus Services, Inc." on Justia Law