Justia Government & Administrative Law Opinion Summaries

The Securities and Exchange Commission (SEC) initiated a civil enforcement action against several individuals, alleging they orchestrated profitable “pump-and-dump” schemes to artificially inflate stock prices and then sell shares at a profit, harming investors. The SEC ultimately obtained final judgments and recovered over $11 million in sanctions. Under the Dodd-Frank Act, the SEC is required to pay whistleblower awards to individuals who voluntarily provide original information leading to successful enforcement actions. After posting a Notice of Covered Action, five claimants submitted applications for whistleblower awards related to this enforcement action.The SEC’s Claims Review Staff awarded 30 percent of the monetary sanctions to Daniel Fisher, a former executive at a company central to the investigation, finding that Fisher provided new, helpful information that substantially advanced the investigation. The staff denied the other applications, including those from Lee Michael Pederson, John Amster, and Robert Heath, concluding that their information was either duplicative, based on publicly available sources, or not used by enforcement staff. Pederson and Fisher were found not to have acted jointly as whistleblowers, and Amster and Heath’s information was not relied upon in the investigation. The SEC affirmed these determinations in its final order.The United States Court of Appeals for the Eighth Circuit reviewed the SEC’s final order, applying a deferential standard to the agency’s factual findings and reviewing legal conclusions de novo. The court held that substantial evidence supported the SEC’s determinations: Pederson and Fisher did not act jointly, Pederson’s individual tips were not original or helpful, and Amster and Heath’s information did not lead to the enforcement action. The court also rejected Pederson’s due process and procedural arguments and denied his motion to compel. The petitions for review were denied, and the SEC’s order was affirmed. View "Pederson v. U.S. Securities Exch. Comm." on Justia Law

Mayo Clinic, a Minnesota nonprofit corporation and tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, sought a refund of unrelated business income tax (UBIT) imposed by the IRS for tax years 2003, 2005-2007, and 2010-2012. The IRS assessed Mayo $11,501,621 in unpaid UBIT, concluding that Mayo was not a qualified educational organization under IRC § 170(b)(1)(A)(ii) because its primary function was not the presentation of formal instruction, and its noneducational activities were not merely incidental to its educational activities. Mayo paid the assessed amount and filed a refund action.The United States District Court for the District of Minnesota granted Mayo summary judgment, holding that Mayo is an educational organization as defined in § 170(b)(1)(A)(ii) and invalidating Treasury Regulation § 1.170A-9(c)(1) for adding requirements not present in the statute. The United States appealed, and the Eighth Circuit reversed the invalidation of the regulation and remanded for further proceedings. On remand, the district court concluded that Mayo had a substantial educational purpose and no substantial noneducational purpose, granting Mayo judgment for the full refund amount plus interest.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court held that "primary" in this context means "substantial" and that Mayo's substantial patient care activities are not noneducational due to the integration of education and clinical practice. The court concluded that Mayo qualifies as an educational organization under § 170(b)(1)(A)(ii) and that its patient care function does not disqualify it from this status. The judgment of the district court was affirmed. View "Mayo Clinic v. United States" on Justia Law

A group of television and radio broadcasters challenged the Federal Communications Commission's (FCC) 2023 Order, which retained all existing media ownership rules and tightened one of them following the 2018 Quadrennial Review. The broadcasters argued that the FCC erred by defining the relevant video and audio markets too narrowly, retaining all parts of the radio and television ownership rules, and tightening Note 11 of the television ownership rule.The FCC's 2023 Order was issued after the 2018 Quadrennial Review, which included a notice of proposed rulemaking and a public comment period. The FCC retained the Local Radio Ownership Rule and the Local Television Ownership Rule, defining the markets narrowly to exclude non-broadcast sources. The FCC justified its decision by emphasizing the unique aspects of broadcast sources and the need to prevent excessive consolidation. The FCC also modified Note 11 to prevent circumvention of the Top-Four Prohibition by including low-power TV stations and multicast streams.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court found that the FCC acted arbitrarily and capriciously in retaining the Top-Four Prohibition part of the television ownership rule and improperly tightened Note 11. The court vacated and remanded the Top-Four Prohibition and the amendment to Note 11 but withheld the issuance of the mandate for 90 days to allow the FCC an opportunity to provide adequate justification. The court denied the remainder of the petition, upholding the FCC's market definitions and retention of the Local Radio Ownership Rule and the Two-Station Limit. View "Zimmer Radio of Mid-Missouri, Inc. v. Federal Communications Commission" on Justia Law

Matthew Mungai, a Black man of Kenyan origin, sued the University of Minnesota, alleging racial discrimination and harassment while he was a student. He claimed violations under Title VI, Title IX, 42 U.S.C. §§ 1981 and 1983, the Minnesota Human Rights Act (MHRA), the Fourteenth Amendment, and negligence. Mungai detailed several incidents of racial harassment by students and staff over three years, including derogatory comments and threats. He reported some incidents to university staff and the Student Conflict Resolution Center (SCRC).The United States District Court for the District of Minnesota dismissed Mungai's claims, finding that his amended complaint failed to state a claim. Mungai appealed, focusing on his Title VI claim and challenging the dismissal with prejudice of his Title VI, MHRA, Fourteenth Amendment, and § 1983 claims.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court adopted the deliberate indifference standard for third-party harassment claims under Title VI, similar to Title IX. To establish liability, Mungai needed to show that the University was deliberately indifferent to known acts of harassment by individuals under its control. The court found that Mungai's allegations did not plausibly show that he reported the incidents to an appropriate person with authority to take corrective action. Additionally, the court found that Mungai did not provide sufficient facts to establish that the University acted with deliberate indifference.The court also upheld the district court's dismissal with prejudice of Mungai's MHRA, Fourteenth Amendment, and § 1983 claims. The MHRA claim was barred by Eleventh Amendment immunity, the Fourteenth Amendment claim could not be brought directly, and the University was not a "person" under § 1983.The Eighth Circuit affirmed the district court's judgment. View "Mungai v. University of Minnesota" on Justia Law

Arkansas Act 629 criminalized many previously legal hemp products. A coalition of affected businesses sued state officers, alleging that Act 629 is unconstitutional. The district court granted the plaintiffs' motion for a preliminary injunction and denied the state's motion to dismiss the Governor and Attorney General.The United States District Court for the Eastern District of Arkansas found that the plaintiffs were likely to succeed on the merits of their Supremacy Clause and due process claims. The court concluded that the 2018 Farm Bill likely preempted Act 629 and that the Act was likely void for vagueness. The court also found that the Governor and Attorney General were not entitled to sovereign immunity because they were sufficiently connected to the enforcement of Act 629.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the 2018 Farm Bill did not expressly preempt Act 629 because the Act's savings clause allowed for the continuous transportation of hemp through Arkansas. The court also found that Act 629 did not conflict with the 2018 Farm Bill's purpose of legalizing hemp production, as the federal law allows states to regulate hemp production more stringently. Additionally, the court concluded that Act 629 was not unconstitutionally vague, as the terms "continuous transportation," "synthetic substance," and "psychoactive substances" were sufficiently clear.The court further held that the Governor and Attorney General were entitled to sovereign immunity because they did not have a sufficient connection to the enforcement of Act 629. The court vacated the preliminary injunction, reversed the order denying the motion to dismiss the Governor and Attorney General, and remanded the case for further proceedings. View "Bio Gen LLC v. Sanders" on Justia Law

SWT Global Supply, Inc. (SWT Global), a Missouri-based manufacturer of electronic nicotine delivery system (ENDS) vaping products, sought review of the U.S. Food and Drug Administration's (FDA) denial of market authorization for its menthol-flavored ENDS products. The FDA denied the premarket tobacco product applications (PMTAs) submitted by SWT Global, citing insufficient evidence that the products would benefit adult users enough to outweigh the risks to youth.The FDA's decision was based on the Family Smoking Prevention and Tobacco Control Act of 2009, which requires new tobacco products to receive FDA authorization before being sold. The FDA determined that SWT Global's PMTAs lacked product-specific evidence demonstrating that the menthol-flavored ENDS products would attract adults away from combustible cigarettes and reduce overall harm. The FDA also found SWT Global's marketing plan insufficient to prevent youth access to the products.The United States Court of Appeals for the Eighth Circuit reviewed the case. SWT Global argued that the FDA's denial was arbitrary and capricious, claiming the FDA changed its position on the required scientific evidence and failed to justify its finding that the marketing plan was insufficient. The court referenced the Supreme Court's decision in Food & Drug Administration v. Wages & White Lion Investments, L.L.C., which held that the FDA's denial of PMTAs for flavored ENDS products was consistent with its guidance and did not violate the change-in-position doctrine.The Eighth Circuit found that the FDA did not change its position regarding the scientific evidence required for PMTAs and provided a satisfactory explanation for its decision. The court also determined that the FDA's treatment of menthol-flavored ENDS products was reasonable and consistent with its approach to other non-tobacco-flavored ENDS products. Consequently, the court denied SWT Global's petition for review. View "SWT Global Supply, Inc. v. U.S. Food & Drug Administration" on Justia Law

Summit Carbon Solutions, LLC plans to build an interstate pipeline through Iowa, passing through Shelby and Story Counties. Both counties enacted ordinances imposing various requirements on pipelines, including setback, emergency response plan, and local permit requirements. Summit challenged these ordinances, arguing they were preempted by the federal Pipeline Safety Act (PSA) and Iowa law. The district court granted summary judgment in favor of Summit, permanently enjoining the enforcement of the ordinances.The United States District Court for the Southern District of Iowa reviewed the case and ruled in favor of Summit, finding that the PSA and Iowa law preempted the counties' ordinances. The court issued a permanent injunction against the enforcement of the ordinances. The counties appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court held that the PSA preempts the Shelby and Story County ordinances' setback, emergency response, and abandonment provisions. The court found that the ordinances were safety standards, which are preempted by the PSA. Additionally, the court held that the ordinances were inconsistent with Iowa law, as they imposed additional requirements that could prohibit pipeline construction even if the Iowa Utilities Commission (IUC) had granted a permit. The court affirmed the district court's judgment in both cases but vacated and remanded the judgment in the Story County case to the extent it addressed a repealed ordinance. View "Couser v. Shelby County" on Justia Law

Karla Smith and Holly Bladel sued Iowa state officials and the State of Iowa after Iowa opted out of federal unemployment programs established during the Covid-19 pandemic. These programs, created under the CARES Act, provided various unemployment benefits. Iowa initially participated in these programs but decided to end its participation in June 2021. Smith and Bladel claimed that this decision violated the U.S. Constitution, the Iowa Constitution, and Iowa state law.The United States District Court for the Southern District of Iowa dismissed the case, ruling that the defendants were immune from suit under the Eleventh Amendment and that the plaintiffs lacked a constitutionally protected property interest in the CARES Act benefits. Smith and Bladel appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's decision. The court held that the Eleventh Amendment barred Smith's official-capacity claims against Iowa and its officials, as the claims did not fall under the Ex parte Young exception for ongoing violations of federal law. The court also found that Smith lacked a protected property interest in the CARES Act benefits because Iowa had the discretion to opt out of the programs. Consequently, Smith's due process claim against the Governor and Director in their individual capacities failed. Additionally, the court ruled that Smith's state law claim was barred by the Eleventh Amendment, and her request for declaratory relief was inappropriate as it sought to address past actions rather than future conduct. The court concluded that the district court correctly dismissed all of Smith's claims. View "Smith v. Reynolds" on Justia Law

The case involves Billings County and its commissioners, who appealed a district court's decision to grant a preliminary injunction preventing them from entering the property of Sandra Short, David Short, Donald Short, and Sarah Sarbacker. The dispute centers on the County's attempt to use eminent domain to construct a bridge over the Little Missouri River, known as the Little Missouri River Crossing (LMRC). The Shorts had previously settled a lawsuit with the County in 2021, where the County agreed not to pursue eminent domain for the LMRC project. Despite this, a newly elected Board of Commissioners decided to proceed with the project in 2023, leading the Shorts to file a new lawsuit.The United States District Court for the District of North Dakota granted a preliminary injunction in favor of the Shorts, finding that they were likely to succeed on their breach-of-contract claim based on the Settlement Agreement. The court refrained from deciding on the validity of the Settlement Agreement, leaving that issue for the state court to address. The district court also stayed its proceedings, pending the outcome of the state court case, and denied the County's motion to dismiss without prejudice.The United States Court of Appeals for the Eighth Circuit reviewed the case and vacated the preliminary injunction. The appellate court held that the County could not lawfully contract away its power of eminent domain, as it is an essential attribute of sovereignty. The court concluded that the Settlement Agreement was contrary to law and that the Shorts were not likely to succeed on their breach-of-contract claim. The case was remanded for further proceedings consistent with this opinion. View "Short v. Billings County" on Justia Law

Zackaria Dahir Mohamed, a native of Somalia, entered the United States as a child refugee in 1998. He was later convicted of several offenses, including theft and assault with a dangerous weapon. In 2013, the Department of Homeland Security initiated removal proceedings against him due to these convictions. An Immigration Judge (IJ) ordered his removal in 2018, and the Board of Immigration Appeals (BIA) dismissed his appeal. Mohamed then petitioned for review.The IJ initially found Mohamed removable for aggravated felony theft and crimes of violence. In 2020, the IJ ordered his removal to Somalia. Mohamed appealed to the BIA, which remanded the case to the IJ to assess Mohamed’s competency. On remand, Mohamed presented evidence of his mental health history, including a psychological evaluation by Dr. Jerry Kroll. The IJ ruled in 2021 that Mohamed was competent during the 2020 merits hearing, based on Dr. Kroll’s testimony and the IJ’s observations. The BIA dismissed Mohamed’s appeal on de novo review, leading to the current petition.The United States Court of Appeals for the Eighth Circuit reviewed the case. Mohamed argued that the BIA’s affirmation of the IJ’s competency finding was unsupported by the record. The court noted that it has jurisdiction to review final agency removal orders but not factual findings related to criminal offenses. The court found that Mohamed’s competency determination was a factual finding, which is generally affirmed unless clearly erroneous. Mohamed’s claims were barred by 8 U.S.C. § 1252(a)(2)(C).Even if Mohamed presented a legal or constitutional claim, the court found no fundamental procedural error or resulting prejudice. The IJ had considered all appropriate evidence, including Dr. Kroll’s testimony and Mohamed’s behavior during proceedings. The court concluded that there was no procedural error in holding a retroactive competency hearing. The petition for review was denied. View "Mohamed v. Bondi" on Justia Law