Justia Government & Administrative Law Opinion Summaries

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

Plaintiffs were injured in unspecified accidents and treated by South Carolina health care providers. Seeking to pursue personal injury lawsuits, Plaintiffs requested their medical records from the relevant providers. Those records—and accompanying invoices—were supplied by defendants Ciox Health, LLC and ScanSTAT Technologies LLC, “information management companies” that retrieve medical records from health care providers and transmit them to requesting patients or patient representatives. Claiming the invoiced fees were too high or otherwise illegal, Plaintiffs filed a putative class action against Ciox and ScanSTAT in federal district court.   The district court dismissed the complaint and the Fourth Circuit affirmed. The court explained that South Carolina law gives patients a right to obtain copies of their medical records, while capping the fees “a physician, or other owner” may bill for providing them. However, the statutory obligations at issue apply only to physicians and other owners of medical records, not medical records companies. View "Tammie Thompson v. Ciox Health, LLC" on Justia Law

The Council for Education and Research on Toxics (CERT) brought these actions under Proposition 65 (Prop. 65) against Respondents, dozens of companies that roast, distribute, or sell coffee. CERT claimed that Respondents had failed to provide required Prop. 65 warnings for their coffee products based on the presence of acrylamide. While the litigation was pending, the Office of Environmental Health Hazard Assessment (the Agency) adopted a new regulation providing that “exposures to chemicals in coffee, listed on or before March 15, 2019, as known to the state to cause cancer, that are created by and inherent in the processes of roasting coffee beans or brewing coffee do not pose a significant risk of cancer.”   CERT moved for summary adjudication, challenging the regulation’s validity on various grounds. In opposing summary judgment, CERT also contended that regardless of the regulation, triable issues remained regarding the presence of acrylamide resulting from additives. CERT challenged the trial court’s grant of summary judgment for Respondents, its denial of its motion for fees, and its award of section 998.   The Second Appellate Court affirmed the trial court’s orders granting summary judgment and denying attorney fees. The court reversed the order denying CERT’s motion to tax costs. The court explained that Respondents’ assertion ignores claims beyond the scope of CERT’s actions that were to be released under the offers. Given that the proposed releases in section 998 offers covered this and other potential claims, the trial court could not have determined that the offers were more favorable than the judgment. Thus, the offers were invalid for purposes of section 998. View "Council for Education and Research etc. v. Starbucks Corp." on Justia Law

Gripum manufactures and distributes flavored liquids for use in e-cigarette devices. Gripum submitted a “premarket tobacco product application” to the federal Food and Drug Administration (FDA) in 2021. The agency denied the application, reasoning that Gripum had failed to demonstrate public-health benefits as required by the Family Smoking Prevention and Tobacco Control Act, 21 U.S.C. 387j. The 2016 “Deeming Rule,” promulgated under the Act requires denial of an application to market a new tobacco product if the manufacturer fails to show that the product would be “appropriate for the protection of public health,” considering the risks and benefits to the population as a whole, including users and non-users, the “increased or decreased likelihood that existing users of tobacco products will stop using such products and those who do not use tobacco products will start using such products.The Seventh Circuit upheld the denial. The FDA required Gripum to show that its flavored e-cigarette products were relatively better at reducing rates of tobacco use than products already on the market. It properly applied the comparative standard mandated by the statute. Gripum failed to provide evidence specific to its products; its studies of other products did not even compare tobacco-flavored e-cigarette products to flavored products resembling Gripum’s products. View "Gripum, LLC v. United States Food and Drug Administration" on Justia Law

Kirtz obtained loans from the Pennsylvania Higher Education Assistance Agency (AES), a “public corporation” that makes, guarantees, and services student loans, and the USDA through the Rural Housing Service, which issues loans to promote the development of affordable housing in rural communities. Kirtz alleges that, as of June 2018, both of his loan accounts were closed with a balance of zero. AES and the USDA continued to report the status of Kirtz’s accounts as “120 Days Past Due Date” on his Trans Union credit file, resulting in damage to his credit score. Kirtz sent Trans Union a letter disputing the inaccurate statements. Trans Union gave AES and USDA notice of the dispute, as required by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681. According to Kirtz, neither AES nor the USDA took any action to investigate or correct the disputed information.The district court dismissed Kirtz’s lawsuit, concluding that FCRA did not clearly waive the United States’ sovereign immunity. Courts of Appeals that have considered this issue are split. The Third Circuit reversed. FCRA’s plain text clearly and unambiguously authorizes suits for civil damages against the federal government. In reaching a contrary conclusion, the district court relied on its determination that applying the FCRA’s literal text would produce results that seem implausible. Implausibility is not ambiguity, and where Congress has clearly expressed its intent, courts may neither second-guess its choices nor decline to apply the law as written. View "Kirtz v. Trans Union LLC" on Justia Law

The Consumer Product Safety Commission (CPSC or Commission) promulgated a mandatory safety standard governing all previously unregulated infant sleep products, including ones for which there was no voluntary safety standard in effect. Finnbin, LLC sold baby boxes, an infant flat sleep product covered by the final rule. Finnbin’s boxes lack a firm stand and elevation, so Finnbin may no longer sell them as designed. Finnbin sought judicial review of the final rule.   The DC Circuit denied in part and dismissed in part Petitioner’s motion seeking judicial review of the final review. Finnbin made two arguments why, in its view, the final rule exceeds the CPSC’s statutory authority under section 104. The court held that because the extant voluntary standard here covers only inclined sleep products, the Commission could not impose a broader standard extending to previously unregulated flat sleep products.   Finnbin further contended that section 104 permits the CPSC to impose safety standards but not product bans, which it says must be done under 15 U.S.C. Section 2057. Moreover, Finnbin continues, the final rule bans products like baby boxes. The court explained that by its terms, the final rule creates performance requirements for infant sleep products not already covered by a section 104 standard. Finnbin provides no reason to think that the rule effectively bans any discrete product.   Finally, the court explained in contending the CPSC failed to provide an adequate explanation, Finnbin highlights cases faulting the Commission for relying on imprecise injury reports. But these cases involved rules promulgated under the Consumer Product Safety Act—which, unlike section 104, requires a rigorous cost-benefit analysis. View "Finnbin, LLC v. CPSC" on Justia Law