May 31, 2017 Standing. Carpenters Industrial Council v. Zinke, 854 F.3d 1 (D.C. Cir. 2017) (Kavanaugh, J.). Standing; Direct Review of Actions Under More Than One Statute, But Only One Statute Provides for Direct Review; Chevron; De Minimis Doctrine. Waterkeeper Alliance v. Environmental Protection Agency, 853 F.3d 527 (D.C. Cir. 2017) (Williams, J.) (Brown, J., concurring). Federal Power Act; Just and Reasonable Rates; Arbitrary and Capricious. Maine v. Federal Energy Regulatory Commission, 854 F.3d 9 (D.C. Cir. 2017) (Sentelle, J.). National Labor Relations Act; Railway Labor Act; Ratification of Decision by a Previously Unlawful Board; Substantial Evidence. Allied Aviation Service Company of New Jersey v. National Labor Relations Board, 854 F.3d 55 (D.C. Cir. 2017) (Pillard, J.). Federal Power Act; Mobile-Sierra Presumption; Abuse of Discretion. Emera Maine v. Federal Energy Regulatory Commission, 854 F.3d 662 (D.C. Cir. 2017) (Wilkins, J.). Freedom of Information Act; Waiver by Government of Exemption; Exemptions 6 and 7(c). Citizens for Responsibility and Ethics in Washington v. United States Department of Justice, 854 F.3d 675 (D.C. Cir. 2017) (Wilkins, J.). Standing. Carpenters Industrial Council v. Zinke, 854 F.3d 1 (D.C. Cir. 2017) (Kavanaugh, J.). In 2012, the U.S. Fish and Wildlife Service issued a Final Rule designating 9.5 million acres of federal forest lands in California, Oregon, and Washington as critical habitat for the northern spotted owl, an area roughly twice the size of the State of New Jersey. Various lumber companies that obtain timber from those forest lands are members of a trade association known as the American Forest Resource Council. The Council sued the U.S. Fish and Wildlife Service to challenge the legality of the critical habitat designation. The District Court held the Council did not have standing, based upon the D.C. Circuit s recent decision in Swanson Group Manufacturing LLC v. Jewell, 790 F.3d 235 (D.C. Cir. 2015). The D.C. Circuit reversed and remanded. Where, as here, a plaintiff alleges that it will suffer future economic harm as the result of a government action, the complaint and declarations must together demonstrate a substantial probability of injury-in-fact, causation, and redressability. The Council contends that the critical habitat designation will decrease the timber supply from designated lands and thus cause its member lumber companies to suffer economic harm. Causation is the more difficult question when considering allegations of future economic harm arising from government action that decreases a business's ability to obtain a necessary raw material. When performing that inherently imprecise task of predicting or speculating about causal effects, common sense can be a useful tool. Common sense and basic economics tell us that a business will be harmed by a government action when (i) the government action decreases the supply of a raw material from a source that the business relies on and (ii) the business cannot find a replacement without
incurring additional cost. That principle was established in Mountain States Legal Foundation v. Glickman, 92 F.3d 1228 (D.C. Cir. 1996). The standing inquiry, therefore, boils down to whether the plaintiff has adequately demonstrated: (1) a substantial probability that the challenged government action will cause a decrease in the supply of raw material from a particular source; (2) a substantial probability that the plaintiff manufacturer obtains raw material from that source; and (3) a substantial probability that the plaintiff will suffer some economic harm as a result of the decrease in the supply of raw material from that source. The Council made those showings in this case. Swanson was distinguished on the particular facts in that case that the affidavits and assertions in the complaint were in fact inadequate, not that they could not have been adequate. Standing; Direct Review of Actions Under More Than One Statute, But Only One Statute Provides for Direct Review; Chevron; De Minimis Doctrine. Waterkeeper Alliance v. Environmental Protection Agency, 853 F.3d 527 (D.C. Cir. 2017) (Williams, J.) (Brown, J., concurring). Two provisions of federal law sections of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA) require parties to notify authorities when large quantities of hazardous materials (such as ammonia or hydrogen sulfide) are released into the environment. In addition, EPCRA requires that the information be made public. In 2008 the EPA issued a final rule that generally exempts farms from CERCLA and EPCRA reporting requirements for air releases from animal waste, except it requires Concentrated Animal Feeding Operations (CAFOs) to report under EPCRA, but not under CERCLA. The rule was challenged by several environmental groups on the ground that there was no basis in either statute for exempting such reporting. Their asserted basis for standing was informational injury. Because a plaintiff suffers an "injury in fact" when agency action cuts him off from "information which must be publicly disclosed pursuant to a statute," an initial question was whether the environmental groups had standing to challenge the CERCLA exemption, because CERCLA s reporting requirements are to the government, not to the public. The court noted that EPCRA s reporting requirements are expressly tied to CERCLA reporting requirements, so that an exemption from CERCLA likewise effected an exemption from EPCRA, denying the plaintiffs information required to be disclosed to the public. Consequently, the plaintiffs were injured by the CERCLA exemption and had standing to challenge it. While CERCLA contains a provision that provides for direct review of CERCLA rules in the D.C. Circuit, EPCRA does not contain any specific judicial review provision. Consequently, the general rule applies, that an action challenging a rule must be filed in district court. The court relied on precedent to find jurisdiction to hear the challenge to the EPCRA rule as well, because it would be a wasteful exaltation of form over substance to require piecemeal challenges in various courts. On the merits, the court began with a Chevron analysis. However, the court found no ambiguity in the statutory language requiring reporting of "any release... of a hazardous substance... in quantities equal to or greater than" reportable quantities, and the EPAdid not suggest the amounts here were less than reportable quantities. As a final argument, the EPAinvoked the de minimis doctrine. The de minimis doctrine is an expression of courts' reluctance "to apply the literal terms of a statute to mandate pointless expenditures of effort" and is thus a "cousin" of the doctrine permitting courts to avoid absurd results in the face of a
statute's seemingly plain meaning. The EPA purported to find an absence of regulatory benefit. It asserted that the animal-waste "reports are unnecessary because, in most cases, a federal response is impractical and unlikely." The court, however, noted that commenters had provided, and EPA had not refuted, practical examples of situations in which a federal response would be practical and called for. Moreover, the statutes requirements for informing local governments could provide certain recognized benefits. As a result, it could not be said that the benefits of the reporting would be de minimis. Interestingly, the court acknowledged that the costs of the rule might outweigh the benefits, but it said that would not be enough to support application of the de minimis doctrine. Accordingly, the court vacated EPA s rule. Judge Brown concurred but wished to clarify how she believes Chevron should be applied. She read the majority s opinion as combining the Chevron two-step into a one-step reasonableness inquiry. In this case, EPA set forth no statutory ambiguity authorizing its Final Rule. Under Step One, this ends the matter. Quoting from Justice Breyer s casebook, she wrote, The weight of scholarly opinion endorses an equation of step two with arbitrary and capricious review. Such review is not an inquiry into congressional instructions, but an assessment of whether the agency's decision is reasonable on the merits and not, in the [Supreme] Court's words, arbitrary or capricious in substance. Federal Power Act; Just and Reasonable Rates; Arbitrary and Capricious. Maine v. Federal Energy Regulatory Commission, 854 F.3d 9 (D.C. Cir. 2017) (Sentelle, J.). A group of privately owned utilities that provide transmission services and customers filed petitions for review of orders of the Federal Energy Regulatory Commission (FERC) setting the group's new base return on equity (ROE) that was recoverable under rates charged for the transmission of electric energy. The D.C. Circuit held that FERC did not demonstrate the unlawfulness of group's base ROE before establishing the new base ROE, and thus, FERC acted arbitrarily in setting the new base ROE. Moreover, FERC failed to establish a rational connection between the record evidence and its decision to pick the midpoint of the upper half of the zone of reasonableness as group's new base ROE. Accordingly, the court granted the petitions and vacated the orders and remanded. National Labor Relations Act; Railway Labor Act; Ratification of Decision by a Previously Unlawful Board; Substantial Evidence. Allied Aviation Service Company of New Jersey v. National Labor Relations Board, 854 F.3d 55 (D.C. Cir. 2017) (Pillard, J.). A commercial airline fuel service provider petitioned for review of and National Labor Relations Board (NLRB) cross-applied for enforcement of NLRB's order determining that provider violated the National Labor Relations Act (NLRA) by failing to recognize and bargain with union that represented provider's employees. The D.C. Circuit held that substantial evidence supported the NLRB's decision that the provider did not establish the requisite carrier control for it to be subject to Railway Labor Act (RLA) jurisdiction and exempt from NLRA. The duly-constituted NLRB panel's certification of union as representative of provider's employees ratified the prior panel's earlier order directing representation election for union, thereby remedying Appointments Clause defect in prior panel's order. Substantial evidence also supported the NLRB's decision that provider's employees with
job titles of fueling supervisors, tank farm supervisors, and maintenance supervisors were not supervisors under the NLRA and that provider's employees with the job title of training supervisors were supervisors under the NLRA ineligible to participate in the representation election for the union. Federal Power Act; Mobile-Sierra Presumption; Abuse of Discretion. Emera Maine v. Federal Energy Regulatory Commission, 854 F.3d 662 (D.C. Cir. 2017) (Wilkins, J.). In 2011, the Commission issued Order No. 1000, ordering utilities to remove certain "right of first refusal" provisions from their existing tariffs and agreements. These provisions granted incumbent utilities "the option to construct any new transmission facilities in their particular service areas, even if the proposal for new construction came from a third party." Order No. 1000's prohibition of such provisions was premised on the rationale that rights of first refusal deterred new entrants "from proposing much-needed infrastructure reforms, discouraging competition within the industry, and potentially driving up the cost of rates charged for wholesale electricity service." Order No. 1000 was upheld by this Court in S.C. Pub. Serv. Auth. v. FERC (South Carolina), 762 F.3d 41 (D.C. Cir. 2014) (per curiam). The petitioners in that case raised a litany of challenges to the Order, including that FERC was prevented from eliminating rights of first refusal because those provisions were entitled to the Mobile-Sierra presumption. The Mobile-Sierra presumption requires the Commission to "presume a contract rate for wholesale energy is just and reasonable" and prohibits the Commission from setting aside that rate unless the Commission finds that the rate "seriously harm[s] the public interest." In Order No. 1000, the Commission had reserved judgment on whether to apply this presumption to the rights of first refusal until evaluating the individual utilities' compliance filings, and so the court in South Carolina likewise reserved judgment as to how the presumption would apply. A later case presented the situation South Carolina anticipated in a petition for review of a FERC compliance filing determination in which FERC refused to apply the Mobile-Sierra presumption to a right of first refusal provision. The D.C. Circuit held that the Mobile-Sierra presumption was inapplicable because the presumption does not extend to "terms arrived at by horizontal competitors with a common interest to exclude any future competition." In the current case FERC applied the Mobile-Sierra presumption, albeit in its discretion, but rebutted the presumption, so the question is whether FERC satisfied the standard for rebutting the presumption. In addition, other petitioners claim that FERC went beyond Order No. 1000 and impermissibly altered the balance of responsibility and power as between state governments and Independent Service Operator New England (ISO-NE). The D.C. Circuit held that FERC's determination that the right of first refusal provisions harmed the public interest was not inconsistent with FERC's prior order finding that record was not sufficient to determine applicability of the Mobile-Sierra presumption to the provisions. In addition, FERC's determination that the right of first refusal provisions harmed the public interest was not inconsistent with the prior determination approving an agreement in which FERC found that right of first refusal provision would have no adverse impact on third parties or the New England market. Moreover, FERC's analysis of the deleterious effects of the right of first refusal provisions was sufficiently particularized, and it was not required to identify empirical evidence to support its conclusion that right of first refusal provisions harmed public interest. FERC did not abuse its discretion in rejecting the transmission owners' evidence in determining that first refusal requirements harmed public interests, and FERC's rejection of
regional transmission organization's proposed procedure for complying with rule did not impermissibly conflict with or expand on Order No. 1000. Freedom of Information Act; Waiver by Government of Exemption; Exemptions 6 and 7(c). Citizens for Responsibility and Ethics in Washington v. United States Department of Justice, 854 F.3d 675 (D.C. Cir. 2017) (Wilkins, J.). This is the second time this case has been before the D.C. Circuit. Citizens for Responsibility and Ethics in Washington (CREW) sought information related to the Department of Justice s (DOJ) investigation of former Majority Leader Tom DeLay arising out of its investigation of corruption involving lobbyist Jack Abramoff. Initially, its FOIA request was denied, relying on exemptions 3 and 7(A), (C), (D), & (E). The district court upheld the denial, but the D.C. Circuit reversed, finding that DOJ had "not met its burden to justify categorical withholding under Exemption 7(A) or 7(C)" and had not "provided sufficient detail at this stage for a court to determine whether a portion of the requested records may be withheld under Exemption 3, 7(D) or 7(E)." On remand, the DOJ released 124 pages of material but withheld 204 pages, invoking exemptions 3, 5, 6, 7(C), 7(D) and 7(E). CREW again filed suit, challenging the withholding under exemptions 5, 6, and 7(C), but again the district court upheld the withholding. Again the D.C. Circuit reversed. First, it held that DOJ had waived the exemption 5 justification, because it had not raised it in the initial case, and under D.C. Circuit precedent, the failure initially to raise an exemption precludes, except in extraordinary cases, the ability to raise it later. FOIA's Exemption 6 encompasses "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy," while Exemption 7(C) protects "records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information... could reasonably be expected to constitute an unwarranted invasion of personal privacy." Because exemption 7(C) is broader than exemption 6, courts focus on 7(C) when both are invoked. Here the issue was the privacy of individuals, other than Delay, identified in the investigative files that had to be weighed against the public interest in disclosure of information that sheds light on the FBI s investigation. CREW did not contest the redaction of names of FBI or other federal government personnel. The court then held that identification of named or otherwise identified individuals who had not previously been publicly implicated in the corruption investigation were "categorically... exempt from disclosure, because there was no "compelling evidence that the agency [was] engaged in illegal activity." That left the individuals who had already been publicly identified either through agency press releases or testimony in open court as having been charged, convicted or otherwise implicated in connection with the public corruption investigation. Because these individuals had a diminished privacy interest, the court said, the categorical rule of non-disclosure did not apply to them. The court went on: These initial observations do not resolve the question of whether the Government redactions of [these] names were proper in this case. On the one hand, the substantial public interest present here may outweigh privacy interests that have been diminished by prior disclosures, including through guilty pleas and convictions. On the other hand, a responsive document could reveal new information about a person's conduct, going beyond the facts in the public record related to that person's conviction and sentencing. Under such circumstances, that
individual would retain a privacy interest in the non-disclosure of the new information. Because this weighing had not been done in the district court, the D.C. Circuit reversed and remanded the case to the district court to undertake that particularized balancing.