A collection of significant and strange cases decided by the federal courts of appeals this week. Each summary delivered in a minute or less: ten cases, ten minutes. On the docket this week was the Fifth Circuit, taxes, immigration, the Fifth Circuit, vaccines, the Fifth Circuit, and sinking boats—and did we mention the Fifth Circuit?
1. Tenth Circuit dismisses challenge to Colorado Taxpayer’s Bill of Rights.
In 1992 Colorado voters amended their state constitution to give themselves greater oversight of their taxes. The “Taxpayer’s Bill of Rights,” as the amendment is called, requires all government entities in Colorado—school boards, city councils, and even the state capitol—to get voters’ approval before enacting a new tax, raising a current tax, or extending an expiring tax. In short, voters have to approve any “tax policy change [that] directly caus[es] a net tax revenue gain to any district” (quoting the amendment directly). This “Bill of Rights” smacks of irony. Just consider the name. If its purpose was to give Coloradans the ability to veto tax laws they disliked, they apparently ignored their right to vote out of office the representatives who supported the laws in the first place. Anyway, a host of local government outfits went to court in 2011. They argued that the amendment deprives, well, someone in Colorado of a “republican form of government” under Article IV of the U.S. Constitution. Identifying that someone has proved tricky, however. After a decade of litigation, a district court dismissed the case without prejudice for lack of subject-matter jurisdiction. Plaintiffs appealed. En banc Tenth Circuit (voting 7:2): Dismissal without prejudice affirmed—not for lack of jurisdiction, but because plaintiffs fail to state a claim. Chief Judge Tymkovich, concurring: There are some nonjusticiable political issues here. Also, the dismissal is really a dismissal with prejudice because the majority reaches the merits. Judge Bacharach, concurring: No, the dismissal is properly one without prejudice. Judge Briscoe, concurring/dissenting in part: No no no, the disposition is all wrong. The district court dismissed for lack of jurisdiction. We all agree that was an error, so just reverse and remand!
2. Fifth Circuit creates circuit split on constitutional challenges to the Securities and Exchange Commission.
The Securities and Exchange Commission (SEC), a federal agency, is governed by the 1934 Securities Exchange Act. At issue here is one of the act’s provisions (§78y(a)(1)), which states that one may challenge an SEC order in one of the federal circuit courts of appeals. Does this mean the litigant cannot file the challenge in a federal district court? No, says the en banc Fifth Circuit (voting 9:7). §78y does not deprive district courts of subject-matter jurisdiction over certain constitutional challenges to the SEC. (NB: This creates a circuit split with five other circuits.) This case also features a concurrence from Judge Oldham that explores Hegel, German historicism, and Woodrow Wilson.
3. Fifth Circuit upholds federal bump stock ban.
Two weeks ago the en banc Sixth Circuit split 50-50 on whether to uphold the federal government’s ban on bump stocks. This week a Fifth Circuit panel considered the same question. Panel: We are not split. Ban is valid.
4. Fifth Circuit invalidates Biden administration’s rescission of “remain in Mexico” policy.
Part of President Trump’s immigration agenda was the Migrant Protection Protocols, better known as the “remain in Mexico” policy. If an immigrant enters the U.S. illegally and the federal government starts deportation proceedings—which can last months or years—the policy provides that the immigrant is to be taken to Mexico until the proceedings conclude. President Biden sought to rescind the policy. In February his administration sent a letter to Texas purporting to end the policy “effective immediately.” Texas, wanting to keep the policy in place, went to court. It contended that the Biden administration’s rescission violated the Administrative Procedure Act (APA). It also said the move contravened federal immigration law and the U.S. Constitution. Fifth Circuit panel: We agree with Texas on two points. The rescission violated the APA and this immigration law, and so is invalid.
5. Fifth Circuit scales back injunction against federal vaccine requirement for Medicare, Medicaid providers.
Last week a panel of the Eleventh Circuit voted not to block the federal government’s requirement that Medicare and Medicaid providers get vaccinated against COVID-19. Meanwhile, over in Louisiana, 14 states had also challenged the requirement, and a district court had issued a nationwide injunction. Fifth Circuit panel: We’re aware of similar cases in other circuits, like the Eleventh. We’re also aware of concerns raised by certain members of the Supreme Court (here’s looking at you, Justices Gorsuch and Thomas) about nationwide injunctions. So, this injunction will apply only in the 14 states named as plaintiffs, which are Arizona, Alabama, Georgia, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Montana, Ohio, Oklahoma, South Carolina, Utah, and West Virginia.
6. Fourth Circuit dismisses challenge to now-expired Virginia social distancing measures.
Virginia imposed limits on public gatherings and, eventually, a stay-at-home order during the height of COVID-19’s spread. While some businesses were exempt, religious organizations were not. A local chapter of the Lighthouse Fellowship Church went ahead with its regular, in-person worship services, which exceeded the gathering limits. The pastor received a citation. The church sued Virginia, arguing that the state’s gathering restrictions violate the First Amendment (among other things). Litigation continued as Virginia started its phased reopening plan. The court battle was still unresolved when Governor Ralph Northam decided it was time to reopen fully and repealed the gathering restrictions and stay-at-home order. This, one would think, would moot the church’s case. After all, the regulations the church challenged are no longer on the books, and therefore a court can no longer provide the exact relief the church sought. But the church claimed its case is still live. Fourth Circuit panel: This case is moot.
7. Boat mysteriously sinks in Louisiana, and the Fifth Circuit sinks subsequent lawsuit.
SCF Marine, a shipping company, agrees to send a barge to Terral River Service, a river transportation company. The boat is inspected for leaks and cracks. The inspector finds none. SCF then docks the boat at Terral’s facility. A second inspection takes place, this time by a Terral employee. He also finds no damage. Terral begins loading the boat with cargo. A third inspection occurs, again performed by Terral employees. They see no issues. Twenty minutes after the third inspection, the boat sinks. When the boat is fished out of the river, inspectors find a crack twelve inches long and nearly an inch wide in the boat’s hull. Terral sues SCF for negligence and breach of contract, among other things. SCF moves for summary judgment. District court: We grant summary judgment and dismiss Terral’s claims. Fifth Circuit panel: Affirmed.
8. Ninth Circuit adopts bright-line rule for certain immigration cases.
Gary Tomczyk, a Canadian citizen, was deported from the U.S. in 1990. A year later a U.S. border guard waved Tomczyk and a friend, who were in a van, into the States without checking whether they had the proper documents. Fast forward twenty-five years. Tomczyk, who has been in U.S. ever since, was arrested for drunk driving. Federal officials discovered Tomczyk’s immigration status, and they moved to deport him for illegal reentry. Tomczyk, on appeal: Because the border guard waved me through (even if mistakenly), my reentry was legal. Ninth Circuit panel: We agree (over a dissent). En banc Ninth Circuit (voting unanimously): Reversed. If a noncitizen is inadmissible, has been deported, and reenters the U.S., such reentry is illegal no matter how the noncitizen reenters. That includes a border official’s mistake.
9. D.C. Circuit straddles fence in dispute between United, TSA.
Federal law requires airplane passengers to pay the Transportation Security Administration (TSA) a security fee. The TSA doesn’t collect the fee from passengers directly. Instead, air carriers include the fee in the passenger’s ticket and then remit the fee to the TSA. If the TSA collects too large a fee or charges a fee by mistake, carriers can request a refund. Here, United Airlines requested two refunds. First, United claimed TSA collected over $1 million in connection with passengers who booked flights with other airlines but were forced to switch to a United flight due to circumstances beyond United’s control. Second, United sought a $500,000 refund for foreign fees with fluctuating exchange rates. Specifically, United had collected the fee in a foreign currency. But when United later remitted the fee, intervening changes in the currency’s exchange rate caused United to pay the TSA slightly more than what was required. The TSA denied both of United’s requests. D.C. Circuit panel: TSA’s decision is vacated and remanded. Federal law says the “air carrier . . . that sells [the] ticket” must collect and pay the fee. With respect to the first set of fees, United did not sell the passengers their tickets. The TSA should take another look at refunding the $1 million. But United did sell the tickets relating to the second set of fees, so no refund there.
10. Eleventh Circuit discusses removal procedure errors in insurance case.
Darryl Vachon, a resident of Florida, got into a car accident. The other driver’s insurance did not cover all of Vachon’s damages. So Vachon tried to recover the remaining balance from his insurer, Travelers. Travelers refused, and Vachon filed suit. A jury awarded him over $1 million in damages. After the verdict Vachon brought a bad faith claim against Travelers in state court. Travelers removed to federal court. Vachon countered that the removal was untimely. A district court agreed and remanded to state court. Travelers appealed. Eleventh Circuit panel: Appeal dismissed. Under this federal law we lack jurisdiction over a district court order remanding a case to state court because of a defect in removal procedure, such as untimeliness. Judge Pryor (joined by Judge Lagoa), concurring: Even if the appeal was timely, Travelers would still lose on the merits.
Image credits: Jones Day