Justia Government & Administrative Law Opinion Summaries

Former Virginia Governor McDonnell, and his wife were indicted on honest services fraud and Hobbs Act extortion charges related to their acceptance of $175,000 in loans, gifts, and other benefits from Williams, the CEO of Star Scientific, which developed Anatabloc, a nutritional supplement made from a compound found in tobacco. Williams wanted McDonnell’s assistance in getting public universities to perform research studies on the product. The government asserted that McDonnell committed (or agreed to commit) an “official act” in exchange for the loans and gifts. An “official act” is “any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit,” 18 U.S.C. 201(a)(3). The claimed “official acts,” included “arranging meetings” for Williams with other Virginia officials, “hosting” events at the Governor’s Mansion, and “contacting other government officials” concerning the studies. The district court instructed the jury that “official act” encompasses “acts that a public official customarily performs,” including acts “in furtherance of longer-term goals” or “in a series of steps to exercise influence or achieve an end.” The court declined to give McDonnell’s requested instruction that “merely arranging a meeting, attending an event, hosting a reception, or making a speech are not, standing alone, ‘official acts.’” The Fourth Circuit affirmed the convictions. A unanimous Supreme Court vacated. An “official act” involves a decision or action (or an agreement to act or decide) on “question, matter, cause, suit, proceeding or controversy,” by a formal exercise of governmental power. The pertinent matter must be more focused and concrete than “Virginia business and economic development,” and a decision or action is more than merely setting up a meeting, hosting an event, or calling another official. The government’s expansive interpretation of “official act” would raise significant constitutional concerns. Conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. The jury instructions, therefore, were significantly overinclusive. View "McDonnell v. United States" on Justia Law

An equally divided Court affirmed, by per curiam opinion, the judgment of the appeals court below. That court had temporarily halted implementation of the federal government's Deferred Action for Parents of Americans and Lawful Permanent Residents program ("DAPA") on the grounds that the policy likely violated the Administrative Procedure Act. The case will go back to the federal district court to determine whether DAPA should be permanently enjoined. View "United States v. Texas" on Justia Law

A third party may ask the Patent and Trademark Office (PTO) for inter partes review to reexamine claims in an issued patent and to cancel any claim found to be unpatentable in light of prior art; the decision “whether to institute an inter partes review . . . shall be final and non-appealable,” 35 U.S.C. 314(d). PTO is authorized to issue regulations governing inter partes review. One such regulation provides that, during inter partes review, a patent claim “shall be given its broadest reasonable construction in light of the specification of the patent in which it appears.” Garmin sought inter partes review of Cuozzo’s patent, asserting that claim 17 was obvious in light of prior patents. PTO reexamined claims 17, 10 and 14, finding those claims to be logically linked to the challenge; concluded that the claims were obvious in light of prior art; and canceled the claims. The Federal Circuit and Supreme Court affirmed. Section 314(d) bars a challenge to the decision to institute review. The “strong presumption” favoring judicial review is overcome by clear and convincing indications that Congress intended to bar review of the determination “to initiate an inter partes review under this section,” or where the challenge consists of questions closely tied to statutes related to that determination. Cuozzo’s claim does not implicate a constitutional question, nor present other questions beyond “this section.” The regulation requiring the broadest reasonable construction standard is a reasonable exercise of PTO's rulemaking authority, which is not limited to procedural regulations. The purpose of inter partes review is not only to resolve disputes among parties, but also to protect the public’s “paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.” Congress did not dictate what standard should apply in inter partes review. The broadest reasonable construction standard helps ensure precision in drafting claims and prevents a patent from tying up too much knowledge; PTO has used the standard for more than 100 years. View "Cuozzo Speed Techs., LLC v. Lee" on Justia Law

The Fair Labor Standards Act (FLSA) requires employers to pay overtime compensation to covered employees who work more than 40 hours in a week; a 1966 exemption covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership, 29 U.S.C. 213(b)(10)(A). In 1970, the Department of Labor defined “salesman” to mean “an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles . . . which the establishment is primarily engaged in selling.” The regulation excluded service advisors, who sell repair and maintenance services but not vehicles, from the exemption. Several courts rejected that exclusion. In 1978, the Department changed its position, stating that service advisors could be exempt. In 1987, the Department confirmed its new interpretation, amending its Field Operations Handbook. In 2011, the Department issued a final rule that followed the original 1970 regulation and interpreted the statutory term “salesman” to mean only an employee who sells vehicles. The Ninth Circuit reversed dismissal of a suit by service advisors, alleging violation of the FLSA by failing to pay overtime compensation. The Supreme Court vacated. Section 213(b)(10)(A) must be construed without placing controlling weight on the 2011 regulation. Chevron deference is not warranted where the regulation is “procedurally defective.” An agency must give adequate reasons for its decisions. An “[u]nexplained inconsistency” in agency policy is “a reason for holding an interpretation to be an arbitrary and capricious change from agency practice,” not entitled to deference. The 2011 regulation was issued without the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests. View "Encino Motorcars, LLC v. Navarro" on Justia Law

The Veterans Benefits, Health Care, and Information Technology Act requires the Secretary of Veterans Affairs to set annual goals for contracting with service-disabled and other veteran-owned small businesses, 38 U.S.C. 8127(a). The “Rule of Two” provides that a contracting officer “shall award contracts” by restricting competition to veteran-owned small businesses if the officer reasonably expects that at least two such businesses will submit offers and that “the award can be made at a fair and reasonable price.” A contracting officer “may” use noncompetitive and sole-source contracts for contracts below specific dollar amounts. In 2012, the Department used the Federal Supply Schedule (FSS), a streamlined method for acquisition of goods and services under prenegotiated terms, to procure medical center Emergency Notification Services from a non-veteran-owned business. The agreement ended in 2013. A service-disabled-veteran-owned small business filed a Government Accountability Office (GAO) bid protest, alleging that the Department procured multiple contracts through the FSS without employing the Rule of Two. The GAO determined that the Department’s actions were unlawful. The Department declined to follow the GAO’s nonbinding recommendation. The Federal Circuit held that the Department was only required to apply the Rule when necessary to satisfy its annual goals. The Supreme Court reversed, first holding that it had jurisdiction because the controversy is “capable of repetition, yet evading review.” Section 8127(d)’s contracting procedures are mandatory and apply to all of the Department’s contracting determinations. An FSS order is a “contract” within the ordinary meaning of that term and does not fall outside Section 8127(d). The Court rejected an argument that the Rule of Two will hamper mundane Government purchases as misapprehending current FSS practices, which have expanded beyond simple procurement to contracts concerning complex services over a multiyear period. View "Kingdomware Techs., Inc. v. United States" on Justia Law

Parts of the Puerto Rico Public Corporation Debt Enforcement and Recovery Act. mirrored Chapters 9 and 11 of the Federal Bankruptcy Code and enabled Puerto Rico’s public utility corporations to restructure their debt. The First Circuit affirmed an injunction, concluding that the Act is preempted by 11 U.S.C. 903(1). The Supreme Court affirmed, analyzing three federal municipal bankruptcy provisions. The “gateway” provision, section 109(c), requires a Chapter 9 debtor to be an insolvent municipality that is “specifically authorized” by a state “to be a debtor.” The pre-emption provision, 903(1), expressly bars states from enacting municipal bankruptcy laws. The definition of “State,” 101(52), “includes . . . Puerto Rico, except for the purpose of defining who may be a debtor under chapter 9.” The definition excludes Puerto Rico for the single purpose of defining who may be a Chapter 9 debtor, an unmistakable reference to the gateway provision. The definition of “State” does not exclude Puerto Rico from all of Chapter 9’s provisions. Puerto Rico is bound by the pre-emption provision, even though Congress removed its gateway provision authority to authorize its municipalities to seek Chapter 9 relief. An argument that the Recovery Act is not a “State law” that can be pre-empted is based on technical amendments to the terms “creditor” and “debtor” that are too “subtle” to support such a “[f]undamental chang[e] in the scope” of Chapter 9’s pre-emption provision. View "Puerto Rico v. Franklin Cal. Tax-Free Trust" on Justia Law

Defendants each sold a gun to an undercover police officer. Each was indicted for violation of the Puerto Rico Arms Act of 2000. While those charges were pending, federal grand juries indicted them, based on the same transactions, for violations of analogous U.S. gun-trafficking statutes. Both pleaded guilty to the federal charges and successfully moved to dismiss the Commonwealth charges on double jeopardy grounds. The Supreme Court of Puerto Rico and U.S. Supreme Court upheld the dismissals. The Double Jeopardy Clause bars Puerto Rico and the United States from successively prosecuting a person for the same conduct under equivalent criminal laws. While the Double Jeopardy Clause does not bar successive prosecutions brought by separate sovereigns, “sovereignty” in this context does not bear its ordinary meaning. The issue is the “ultimate source” of the power authorizing the prosecutions. The states are separate sovereigns from the federal government and from one another, but U. S. territories, including an earlier incarnation of Puerto Rico, are not sovereigns distinct from the United States. Federal and territorial prosecutors do not derive their powers from independent sources of authority. Although constitutional developments made Puerto Rico “sovereign” in one commonly understood sense of that term, the dual-sovereignty test focuses not on the fact of self-rule, but on where it originated. Congress conferred the authority to create the Puerto Rico Constitution, which confers the authority to bring criminal charges. That makes Congress the original source of power for Puerto Rico’s prosecutors, as it is for the federal government’s. The island’s Constitution does not break the chain. View "Puerto Rico v. Valle" on Justia Law

Himmelreich, a federal prisoner, sued the United States, alleging that he was severely beaten by a fellow inmate as the result of negligence by prison officials. The government treated the suit as a claim under the Federal Tort Claims Act (FTCA), 28 U.S.C. 1346(b). The court granted the defendants summary judgment on the ground that the claim fell into the exception for “[a]ny claim based upon . . . the exercise or performance . . . [of] a discretionary function,” namely, deciding where to house inmates. While the motion was pending, Himmelreich filed a second suit: a constitutional tort suit against individual Bureau of Prison employees, again alleging that his beating was the result of officials’ negligence. After the dismissal of Himmelreich’s first suit, the court dismissed the second suit as foreclosed by the FTCA’s judgment bar provision. The Sixth Circuit reversed. The Supreme Court affirmed. The FTCA “Exceptions” section’s plain text dictates that the judgment bar does “not apply” to cases that, like Himmelreich’s first suit, are based on the performance of a discretionary function. Had the court dismissed Himmelreich’s first suit because, e.g., the employees were not negligent, it would make sense that the judgment bar provision would prevent a second suit against the employees. Where an FTCA claim is dismissed because it falls within one of the “Exceptions,” the dismissal signals merely that the United States cannot be held liable for the claim; it has no logical bearing on whether an employee can be liable instead. View "Simmons v. Himmelreich" on Justia Law

Peat mining companies sought a Clean Water Act, 33 U.S.C. 1311(a), 1362, permit from the Army Corps of Engineers, to discharge material onto wetlands on property that they own and hope to mine. The Corps issued a jurisdictional designation (JD) stating that the property contained “waters of the United States” because its wetlands had a “significant nexus” to the Red River of the North, located 120 miles away. The district court dismissed their appeal for want of jurisdiction, holding that the JD was not a “final agency action for which there is no other adequate remedy,” 5 U.S.C. 704. The Eighth Circuit reversed. The Supreme Court affirmed. The Corps’ approved JD is a final agency action judicially reviewable under the Administrative Procedures Act. An approved JD clearly “mark[s] the consummation” of the Corps’ decision-making on whether particular property contains “waters of the United States.” It is issued after extensive fact-finding regarding the property’s physical and hydrological characteristics and typically remains valid for five years. The Corps describes approved JDs as “final agency action.” The definitive nature of approved JDs gives rise to “direct and appreciable legal consequences.” A “negative” creates a five-year safe harbor from governmental civil enforcement proceedings and limits the potential liability for violating the Act. An “affirmative” JD, like issued here, deprives property owners of the five-year safe harbor. Parties need not await enforcement proceedings before challenging final agency action where such proceedings carry the risk of “serious criminal and civil penalties.” The permitting process is costly and lengthy, and irrelevant to the finality of the approved JD and its suitability for judicial review. View "Army Corps of Eng'rs v. Hawkes Co." on Justia Law

CRST trucking company requires its drivers to graduate from its training program before becoming certified drivers. In 2005, new driver Starke filed an EEOC charge, alleging that she was sexually harassed by male trainers during her training (42 U.S.C. 2000e–5(b)).The Commission ultimately informed CRST that it had found reasonable cause to believe that CRST subjected Starke and “a class of employees and prospective employees to sexual harassment.” In 2007, having determined that conciliation had failed, the Commission filed suit. During discovery, the Commission identified over 250 allegedly aggrieved women. The district court dismissed, held that CRST was a prevailing party, and awarded the company over $4 million in fees. The Eighth Circuit reversed the dismissal of two claims and vacated the award. On remand, the Commission settled Starke’s claim and withdrew the other. The district court again awarded more than $4 million, finding that CRST had prevailed on more than 150 claims because of the Commission’s failure to satisfy pre-suit requirements. The Eighth Circuit reversed, stating that dismissal was not a ruling on the merits. A unanimous Supreme Court vacated. A favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party. A plaintiff seeks a material alteration in the legal relationship between the parties; a defendant seeks to prevent that alteration, and that objective is fulfilled whenever the plaintiff ’s challenge is rebuffed, irrespective of the precise reason for the decision. Title VII’s fee-shifting statute allows prevailing defendants to recover whenever the plaintiff ’s “claim was frivolous, unreasonable, or groundless.” Congress must have intended that a defendant could recover fees expended in such litigation when the case is resolved in the defendant’s favor, whether on the merits or not. View "CRST Van Expedited, Inc. v. Equal Employment Opportunity Comm'n" on Justia Law