Justia Government & Administrative Law Opinion Summaries

The Public Utilities Commission (the Commission or PUC) oversees the California High-Cost Fund A program (CHCF-A), which provides subsidies to small, rural, independent telephone companies that provide local telephone service in rural and remote areas of California. The subsidies defray the high cost of providing service in such areas. Ten small rural telephone companies that participate in CHCF-A subsidies filed this writ proceeding to nullify the Commission’s broadband imputation order. They contend broadband imputation (1) is not authorized by section 275.6, (2) exceeds the authority granted to the Commission by other statutes and the California Constitution, (3) is preempted by federal law, and (4) is an unconstitutional taking of private property.   The Fifth Appellate District denied the telephone companies’ petition for a writ. The court reasoned that to implement broadband imputation in a general rate case, the Commission will be required to conduct several reasonableness inquiries before reaching a decision about a telephone company’s rates. At this point, the “total effect” of broadband imputation on the telephone companies’ rates cannot be determined because the Commission has not made the foregoing reasonableness determinations and established a telephone company’s rate design and CHCF-A subsidy. Consequently, the court wrote it cannot determine that the rates will be so unreasonably low as to be confiscatory in violation of the telephone companies’ constitutional rights. View "Calaveras Telephone Co. v. Public Utilities Commission" on Justia Law

Under the Hatch-Waxman Act, a drug may receive “new chemical entity exclusivity” if no active ingredient in the drug was previously “approved.” The drug Aubagio was awarded this exclusivity because the Food & Drug Administration (“FDA”) determined that Aubagio’s only active ingredient, teriflunomide, had never previously been approved. This case concerns a challenge to Aubagio’s exclusivity period, which Sandoz Inc. raises to secure a solo period of marketing exclusivity for its generic equivalent. Sandoz maintains that teriflunomide was previously “approved” as an impurity in the drug Arava. In the alternative, Sandoz argued that teriflunomide was in fact approved as an active ingredient in Arava. The district court granted summary judgment for the FDA, agreeing with the agency that Aubagio was entitled to exclusivity because teriflunomide had never previously been approved.   The DC Circuit affirmed the district court’s judgment. The court held that while Sandoz did not exhaust its statutory argument before the FDA, in the absence of a statutory or regulatory exhaustion requirement, the court found it appropriate to decide Sandoz’s challenge. When the FDA approves a new drug, it does not also “approve” known impurities in that drug for the purpose of new chemical entity exclusivity. And the record is clear the FDA did not approve teriflunomide as an active ingredient when it approved Arava. Aubagio was therefore entitled to new chemical entity exclusivity, and Sandoz cannot benefit from a solo exclusivity period for its generic equivalent. View "Sandoz Inc. v. Xavier Becerra" on Justia Law

Plaintiff appealed the district court’s dismissal of her putative class action against the West Virginia Parkways Authority, in which she alleges that the Parkways Authority improperly collected fees. And the Parkways Authority appeals the district court’s holding that it was not entitled to sovereign immunity under the United States or West Virginia Constitutions.   Plaintiff relied on the Class Action Fairness Act for jurisdiction. The Fourth Circuit vacated the district court’s judgment and remanded the case remanded to the district court with directions to dismiss without prejudice. The court concluded that here, Section 1332(d)(5)(A) bars jurisdiction under Section 1332(d)(2) of the Class Action Fairness Act. The court explained that the Parkways Authority is the only, and thus “primary,” defendant. And it is a “governmental entity.” The Parkways Authority’s sovereign-immunity claim is strong enough to conclude that the district court “may be foreclosed from ordering relief” against it. So Section 1332(d)(2)’s jurisdictional grant “shall not apply.” Since that is the only provision that Plaintiff relies on to establish jurisdiction over her putative class action, the district court lacked jurisdiction to hear it. View "Blazine Monaco v. WV Parkways Authority" on Justia Law

The Consumer Financial Protection Act (CFPA) prohibits providers of “financial advisory services” from engaging in deceptive conduct. 12 U.S.C. Sections 5481(15)(A)(viii), 5536(a)(1)(B). Defendant mailed millions of solicitations to current and prospective college students, advertising a targeted program for assisting those students in applying for scholarships. The Consumer Financial Protection Bureau (CFPB) filed an enforcement action in the district court alleging the solicitations were deceptive. The district court agreed and granted summary judgment to the CFPB.   The Ninth Circuit affirmed the district court’s summary judgment ruling. The panel rejected Defendant’s argument that he did not provide financial scholarships are not financial in nature merely because they do not have to be repaid. Second, the record establishes that Defendant’s advice extended beyond the topic of scholarships, covering the entire field of student financial aid. Third, Defendant did, in fact, hold himself out as an expert in finance. The panel held that Defendant provided “financial advisory services,” and the district court did not err in concluding that Defendant was a “covered person” under the CFPA.   The panel held that Defendant was incorrect that the district court failed to consider the net impression of the entirety of his solicitation materials. In addition, the district court did not err by concluding that no issue of material fact existed as to the deceptive nature of Defendant’s conduct based upon the net impression created by his entire solicitation packet. Finally, the panel held that Defendant forfeited his challenge to the district court’s calculation of the restitution and civil penalties. View "CONSUMER FINANCIAL PROTECTION V. ARMOND ARIA, ET AL" on Justia Law

The Family Smoking Prevention and Tobacco Control Act requires manufacturers of new tobacco products to obtain authorization from the United States Food & Drug Administration (FDA) prior to marketing their products. In reviewing a manufacturer’s Premarket Tobacco Product Application, FDA must determine that the marketing of the product is “appropriate for the protection of the public health.” Section  910(c)(4), 123 Stat. at 1810. The agency denied Avail Vapor LLC’s application for its flavored electronic cigarettes, chiefly on the grounds that its products posed a serious risk to youth without enough offsetting benefits to adults.   The Fourth Circuit upheld the FDA’s decision denying Avail’s application. The court explained that under the Tobacco Control Act (TCA) the FDA has the daunting task of ensuring that another generation of Americans does not become addicted to nicotine and tobacco products. The TCA gives FDA the flexibility to determine whether marketing of a new tobacco product is appropriate for the protection of public health, taking into account evolving science and an everchanging market. FDA made the determination that Avail’s flavored ENDS products, seeking in all respects to mimic those sweet treats to which youth are particularly attracted, pose a substantial risk of youth addiction without enough offsetting benefits to adult smokers. FDA could not allow young adults to perceive e-cigarettes as another Baby Ruth or Milky Way, only to find themselves in the grip of a surreptitious nicotine addiction. Substantial evidence supports the assertion that “[t]here is an epidemic of youth use of e-cigarette products, and flavored products like petitioners’ are at the center of that problem.” View "Avail Vapor, LLC v. FDA" on Justia Law

The Horseracing Integrity and Safety Act (HISA) is a federal law that nationalizes governance of the thoroughbred horseracing industry. To formulate detailed rules on an array of topics, HISA empowers a private entity called the Horseracing Integrity and Safety Authority (the “Authority”), which operates under Federal Trade Commission oversight. Soon after its passage, HISA was challenged by various horsemen’s associations, which were later joined by Texas and the state’s racing commission. Plaintiffs argued HISA is facially unconstitutional because it delegates government power to a private entity without sufficient agency supervision. The district court acknowledged that the plaintiffs’ “concerns are legitimate,” that HISA has “unique features,” and that its structure “pushes the boundaries of public-private collaboration.” Nonetheless, the court rejected the private non-delegation challenge.   The Fifth Circuit declared that the HISA is unconstitutional because it violates the private non-delegation doctrine. Accordingly, the court reversed the district court’s decision and remanded. The court explained that while acknowledging the Authority’s “sweeping” power, the district court thought it was balanced by the FTC’s “equally” sweeping oversight. Not so. HISA restricts FTC review of the Authority’s proposed rules. If those rules are “consistent” with HISA’s broad principles, the FTC must approve them. And even if it finds an inconsistency, the FTC can only suggest changes. What’s more, the FTC concedes it cannot review the Authority’s policy choices. The Authority’s power outstrips any private delegation the Supreme Court or the Fifth Circuit has allowed. Thus the court declared HISA facially unconstitutional. View "National Horsemen's Benevolent v. Black" on Justia Law

Plaintiff States’ requested to preliminarily enjoin the United States Secretary of Education (“Secretary”) from implementing a plan to discharge student loan debt under the Higher Education Relief Opportunities for Students Act of 2003(“HEROES Act”). The States contend the student loan debt relief plan contravenes the separation of powers and violates the Administrative Procedure Act because it exceeds the Secretary’s authority and is arbitrary and capricious. The district court denied the States’ motion for a preliminary injunction and dismissed the case for lack of jurisdiction after determining none of the States had standing to bring the lawsuit.   The Eighth Circuit granted the Emergency Motion for Injunction Pending Appeal. The court concluded that at this stage of the litigation, an injunction limited to the plaintiff States, or even more broadly to student loans affecting the States, would be impractical and would fail to provide complete relief to the plaintiffs. MOHELA is purportedly one of the largest nonprofit student loan secondary markets in America. It services accounts nationwide and had $168.1 billion in student loan assets serviced as of June 30, 2022. Here the Secretary’s universal suspension of both loan payments and interest on student loans weighs against delving into such uncertainty at this stage. View "State of Nebraska v. Joseph Biden, Jr." on Justia Law

The Arkansas Video Service Act of 2013 (VSA) establishes a statewide franchising scheme for authorizing video service providers to provide services in political subdivisions within the state. Netflix and Hulu were already providing online video streaming services prior to the passage of the VSA; they have not applied for certificates of franchise authority. The City of Ashdown, Arkansas, filed a putative class action against Netflix and Hulu in 2020, seeking both a declaration that they must comply with the VSA and damages for their failure to pay the required fee. The district court granted Netflix and Hulu’s motions to dismiss, concluding, among other things, that the VSA does not give Ashdown a right of action to bring this suit. Ashdown appealed, arguing that the district court misinterpreted the VSA.   The Eighth Circuit affirmed. The court held that the fact that the VSA does not “prevent” a party from exercising a right does not, itself, confer a right. This provision is more logically read to preserve existing rights of action. The reference to “other laws” in the section title supports this conclusion. Further, the court wrote that the VSA does not establish such a “high duty of care” for video service providers, nor does it signal a strong public policy of protecting municipalities. Thus, the court concluded that recognizing a right of action would circumvent the intent of the VSA. View "City of Ashdown, Arkansas v. Netflix, Inc." on Justia Law

In 2008, California enacted a Property Assessed Clean Energy program (PACE) as a method for homeowners to finance energy and water conservation improvements. A PACE debt was created by contract and secured by the improved property. But like a tax, the installment payments were billed and paid as a special assessment on the improved property, resulting in a first-priority tax lien in the event of default. The named plaintiffs in these putative class actions were over 65 years old and entered into PACE contracts. The defendants were private companies who either made PACE loans to plaintiffs, were assigned rights to payment, and/or administered PACE programs for municipalities. The gravamen of the complaint in each case was that PACE financing was actually, and should have been treated as, a secured home improvement loan. Plaintiffs alleged that defendants engaged in unfair and deceptive business practices by violating consumer protection laws, including Civil Code section 1804.1(j), which prohibited taking a security interest in a senior citizen’s residence to secure a home improvement loan. Generally, a taxpayer could not pursue a court action for a refund of property taxes without first applying to the local board of equalization for a reduction and then filing an administrative claim for a refund. Here, defendants demurred to the complaints on the sole ground that plaintiffs failed to allege they first exhausted administrative remedies. The trial court agreed, sustained the demurrers without leave to amend, and entered a judgment of dismissal in each case. On appeal, plaintiffs primarily contend they were not required to pursue administrative remedies because they have sued only private companies and do not challenge “any aspect of the municipal tax process involved.” The Court of Appeal found that despite their assertions to the contrary, plaintiffs did challenge their property tax assessments. And although they did not sue any government entity, the “consumer protection statutes under which plaintiffs brought their action cannot be employed to avoid the limitations and procedures set out by the Revenue and Taxation Code.” Thus, the Court concluded plaintiffs were required to submit their claims through the administrative appeals process in the first instance. "Their failure to do so requires the judgments to be affirmed." View "Morgan v. Ygrene Energy Fund, Inc." on Justia Law

City of Reno’s complaint and declaratory relief under Nevada’s Video Service Law (“VSL”) and the federal Declaratory Judgment Act, respectively. The Ninth Circuit affirmed the district court’s dismissal for failure to state a claim of Reno’s complaint alleging that Netflix, Inc. and Hulu, LLC failed to pay franchise fees for the video streaming services they provide.   Specifically, the panel first addressed the VSL. The VSL does not expressly create a private right of action for cities to sue for unpaid franchise fees. The test under Nevada law for whether a statute creates an implied right of action is set forth in Baldonado v. Wynn Las Vegas, LLC, 194 P.3d 96 (Nev. 2008). The panel held that all three Baldonado factors weigh against recognition of an implied right of action here. Concerning the federal Declaratory Judgment Act, the panel held that it does not provide a cause of action when a party, such as Reno, lacks a cause of action under a separate statute and seeks to use the Act to obtain affirmative relief. Here, Reno’s suit was offensive, not defensive, and Reno lacked an independent cause of action, so the Declaratory Judgment Act provided no basis for relief. View "CITY OF RENO V. NETFLIX, INC., ET AL" on Justia Law