Justia Business Law Opinion Summaries

Articles Posted in US Court of Appeals for the District of Columbia Circuit
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A small business, Concert Investor LLC, applied for a Shuttered Venue Operators Grant from the Small Business Administration (SBA) after its revenue fell 94% due to the Covid-19 pandemic. The company, which helps mount concert tours for performing artists, applied for a grant of nearly $5 million, or 44.6% of its 2019 revenue. Concert Investor asserted eligibility for a Grant as a “live performing arts organization operator,” claiming that it “produces” live music concerts. However, the SBA denied the application, stating that Concert Investor did not meet the principal business activity standard for the entity type under which it had applied.Concert Investor appealed the SBA's decision in the United States District Court for the District of Columbia under the Administrative Procedure Act. The SBA rescinded its denial during the lawsuit, but later issued a final denial, stating that Concert Investor did not create, perform, or present live performances, nor did it organize or host live concerts. The district court denied Concert Investor’s motion for summary judgment and granted the SBA’s, agreeing with the SBA that substantial evidence showed that Concert Investor was not a producer.The United States Court of Appeals for the District of Columbia Circuit reviewed the district court’s summary judgment order de novo and vacated the district court’s order granting summary judgment to the SBA. The court found that the SBA's definition of a "producer" was too narrow and inconsistent with the statutory language. The court also found that the SBA failed to consider relevant record evidence supporting Concert Investor’s eligibility for a Grant. The case was remanded for further proceedings. View "Concert Investor, LLC v. Small Business Administration" on Justia Law

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In 2016, Jesse Benton, a political operative, received funds from Roman Vasilenko, a foreign national, and contributed those funds to a fundraiser supporting then-Presidential candidate Donald Trump. Benton was subsequently convicted of six felonies related to the unlawful contribution and related campaign finance filings. Benton appealed his conviction on several grounds, including challenges to the government’s decision to prosecute campaign finance crimes under the Sarbanes-Oxley Act, the admissibility of an earlier pardoned conviction, the sufficiency of the evidence, and the jury charge.The District Court denied Benton's motion to dismiss the charges, ruling that the Sarbanes-Oxley Act could be applied to false campaign finance filings. The court also allowed the admission of Benton's earlier pardoned conviction under Federal Rule of Evidence 404(b) and its use at sentencing. After a three-day jury trial, Benton was found guilty on all counts. He was sentenced to eighteen months' incarceration and twenty-four months' supervised release.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court's decision. The court held that the government had discretion to prosecute under either the Sarbanes-Oxley Act or the Federal Election Campaign Act (FECA). The court also found no error in the district court's admission of Benton's pardoned conviction under Rule 404(b) and declined to review Benton's challenge to the use of the pardoned conviction at sentencing. Finally, the court rejected Benton's challenges to the jury instructions, finding that any error was invited by Benton himself. View "United States v. Benton" on Justia Law

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The United States Department of Justice (DOJ) initiated an investigation into potentially anti-competitive practices in the real estate industry by the National Association of Realtors (NAR). In November 2020, the DOJ and NAR reached a settlement, and the DOJ sent a letter to NAR stating that it had closed its investigation and that NAR was not required to respond to two outstanding investigative subpoenas. However, in July 2021, the DOJ withdrew the proposed consent judgment, reopened its investigation, and issued a new investigative subpoena. NAR petitioned the district court to set aside the subpoena, arguing that its issuance violated a promise made by the DOJ in the 2020 closing letter. The district court granted NAR’s petition, concluding that the new subpoena was barred by a validly executed settlement agreement.The United States Court of Appeals for the District of Columbia Circuit disagreed with the district court's decision. The court held that the plain language of the disputed 2020 letter permits the DOJ to reopen its investigation. The court noted that the closing of an investigation does not guarantee that the investigation would stay closed forever. The court also pointed out that NAR gained several benefits from the closing of the DOJ’s pending investigation in 2020, including relief from its obligation to respond to the two outstanding subpoenas. Therefore, the court reversed the judgment of the district court. View "National Association of Realtors v. United States" on Justia Law

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The United States Court of Appeals for the District of Columbia Circuit was tasked with evaluating a previous decision by the Postal Regulatory Commission (PRC) regarding cost allocation between the United States Postal Service's (USPS) market-dominant and competitive products. United Parcel Service (UPS), a competitor of the USPS, challenged the PRC's formula for allocating institutional costs.The USPS offers both market-dominant products, like standard mail (where it holds a near-monopoly), and competitive products, like package delivery (where it competes with private companies like UPS). The PRC's task is to ensure that the USPS's competitive products cover an "appropriate share" of institutional costs. In 2020, the court had remanded the PRC's Order that adopted a formula for this "appropriate share", and asked the PRC to better explain its reasoning.On remand, the PRC revised its analysis but maintained the same formula. The court of appeals concluded that the PRC had adequately addressed the previous issues identified and reasonably exercised its statutory discretion in adopting the formula. Consequently, UPS's petition for review was denied.The court found that the PRC's interpretation of the distinction between costs attributable to competitive products and costs uniquely or disproportionately associated with competitive products was reasonable. It also found the PRC's decision to not include attributable costs directly in the appropriate share to be reasonable, to avoid double-counting. The court rejected UPS's claim that the PRC was required to allocate all of the USPS's institutional costs between market-dominant and competitive products, and it also found that the PRC had adequately considered competitive products' market conditions. Lastly, the court upheld the PRC's proposed formula for setting the appropriate share. View "United Parcel Service, Inc. v. Postal Regulatory Commission" on Justia Law

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In a case involving cobalt mining in the Democratic Republic of Congo (DRC), the U.S. Court of Appeals for the District of Columbia Circuit held that the plaintiffs, former cobalt miners injured in mining accidents and their representatives, have standing to pursue damages claims, but not injunctive relief, against five American technology companies under the Trafficking Victims Protection Reauthorization Act of 2008 (TVPRA).Plaintiffs argued that the technology companies participated in a venture with their cobalt suppliers by purchasing the metal through the global supply chain, which allegedly involves forced labor. The court ruled that merely purchasing an unspecified amount of cobalt through the global supply chain does not amount to "participation in a venture" within the meaning of the TVPRA, and hence, the plaintiffs failed to state a claim for relief.The court also dismissed the plaintiffs' common law claims for unjust enrichment, negligent supervision, and intentional infliction of emotional distress, as they failed to demonstrate that the technology companies participated in a venture with anyone engaged in forced labor. Therefore, the court affirmed the district court's dismissal of the complaint. View "Doe v. Apple Inc." on Justia Law

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In this case, employers M&K Employee Solutions, LLC and Ohio Magnetics, Inc. withdrew from the IAM National Pension Fund during the 2018 plan year. The Fund assessed withdrawal liability for each entity based on actuarial assumptions. Both employers challenged their respective assessments and won in arbitration, with the arbitrator ruling that the Fund's actuary erred in setting actuarial assumptions for a given measurement date after the measurement date based on information available at that date. The Fund appealed and the district court vacated the arbitration awards, ruling that an actuary may indeed set actuarial assumptions for a given measurement date after the measurement date based on information available "as of" the measurement date.The Court of Appeals for the District of Columbia Circuit affirmed the district court's decision. The court held that it would be contrary to the legislative intent of the Multiemployer Pension Plan Amendments Act to require an actuary to determine what assumptions to use before the close of business on the measurement date. The court also ruled that M&K was entitled to a “free-look” exception because it partially withdrew from the Fund within a period of less than five years, meaning it could withdraw without incurring liability. View "Trustees of the IAM National Pension Fund v. M & K Employee Solutions, LLC" on Justia Law

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Ascendium Education Solutions (“Ascendium”) is a Program guarantor that previously charged debt-collection costs to defaulting Program borrowers who entered loan rehabilitation agreements. Ascendium challenged the Department of Education’s Rule, 34 C.F.R. Section 682.410(b)(2)(i), under the Administrative Procedure Act (“APA”), arguing that the Department of Education and its Secretary (collectively, the “Department”) did not have statutory authority to promulgate the Rule because the Rule conflicts with the Act. The district court ruled that Ascendium lacked standing to challenge the Rule as it applies to borrowers who enter repayment agreements. But the district court held that the Rule exceeded the Department’s authority under the Act with respect to borrowers who enter rehabilitation agreements. Both Ascendium and the Department appealed.   The DC Circuit reversed in part and affirmed in part. The court concluded that Ascendium has standing to challenge the entirety of the Rule, that the Rule is consistent with the Act and therefore is lawful, and that the Rule is not arbitrary or capricious. The court explained that the Rule prohibits a guarantor from charging collection costs to a borrower who enters a repayment plan or a rehabilitation agreement during the initial default period: It implicitly deems such costs “unreasonable” under the circumstances. The court concluded that the Rule is consistent with the Act’s requirement that “reasonable” collection costs must be passed on to borrowers. Further, the court explained that the Department’s response to Ascendium’s comment adequately refuted Ascendium’s assumption that the purpose of the Rule should be to incentivize guarantors to enter rehabilitation agreements by allowing them to charge collection costs. View "Ascendium Education Solutions, Inc. v. Miguel Cardona" on Justia Law

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Metropolitan Washington Chapter, Associated Builders and Contractors, Inc. (“Metro Washington”), a corporate trade organization representing construction companies, brought this pre-enforcement challenge to the constitutionality of the District of Columbia First Source Employment Agreement Act of 1984. The statute requires contractors on D.C. government-assisted projects to grant hiring preferences to D.C. residents. Metro Washington appealed the district court’s Rule 12 dismissals of the claims under the dormant Commerce Clause, U.S. Const. and the Privileges and Immunities Clause, and the grant of summary judgment to the District of Columbia on the substantive due process claim.   The DC Circuit affirmed the district court’s Rule 12(b)(6) dismissal of Metro Washington’s dormant Commerce Clause claim and Rule 12(c) dismissal of the Privileges and Immunities Clause claim. The court also affirmed the district court’s grant of summary judgment to the District of Columbia on the inapplicability of the Privileges and Immunities Clause to a corporation. Further, although Metro Washington has Article III standing as an association, it lacks third-party standing to raise its alternative Privileges and Immunities claim based on incorporation through the Fifth Amendment, and therefore the court dismissed this alternative contention. View "Metropolitan Washington Chapter, Associated Builders and Contractors, Inc. v. DC" on Justia Law

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Petitioner petitioned for review of the Securities and Exchange Commission order granting him a whistleblower award for providing original information leading to successful enforcement action against Citigroup, Inc. Although the SEC agreed the original information Petitioner and his team provided to the Commission warranted an award equal to 15 percent of the fine levied against Citigroup, Petitioner objected to the Commission’s determination that he and his former co-worker were to divide the award equally as joint whistleblowers.   The DC Circuit dismissed Petitioner’s petition for want of jurisdiction insofar as he challenges the amount of the award granted to his co-worker. The court denied the petition insofar as it challenges the co-worker’s eligibility for an award because the Commission’s decision was not arbitrary and capricious, or otherwise contrary to law, nor was its finding of fact unsupported by substantial evidence.   The court explained that the SEC whistleblower statute does not ask who developed the original information that led to a successful resolution of a covered action; instead, it asks who provided that information to the Commission. The SEC did not err as to the law, nor did it lack substantial evidence as to the facts, in determining that both parties acted as joint whistleblowers when they provided information to the Commission, making the co-worker eligible for an award. View "Michael Johnston v. SEC" on Justia Law

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These consolidated cases, on appeal from a judgment of the district court, present competing claims to a blocked electronic funds transfer. The parties are the United States, which blocked the transaction because terrorists initiated it. On the other side are victims of Iran-sponsored terrorism who have obtained multimillion-dollar judgments against the Iranian government.   After learning of the government’s forfeiture action, attorneys for two groups of victims of Iranian terrorism and their relatives, holding judgments against Iran, filed separate writs of attachment. Plaintiffs sought to attach the funds at Wells Fargo pursuant to two federal statutes. The first, 28 U.S.C. Section 1610(g) of the Foreign Sovereign Immunities Act (“FSIA”). The second is Section 201(a) of the Terrorism Risk Insurance Act of 2002 (“TRIA”).   The district court ruled that Iran lacked any property interest in the blocked funds held by Wells Fargo. The court, therefore, quashed Plaintiffs’ writs of attachment. The DC Circuit court reversed and remanded. The court explained that tracing resolves this case in Plaintiffs’ favor. The government admits that the $9.98 million blocked funds at Wells Fargo “are traceable to Taif” and thus to Iran. The premise of the government’s forfeiture action is that the funds are traceable to Iran. The district court, therefore, erred in concluding that Plaintiffs had failed to show that the blocked funds were, under Section 201(a) of the TRIA, the blocked assets of [a] terrorist party. View "Estate of Jeremy I. Levin v. Wells Fargo Bank, N.A." on Justia Law