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05/19/2017

D.C. Circuit Rules Department of Energy May Not Use “Voluntary” Remand to Evade Judicial Review

In a victory for Cause of Action Institute’s client Limnia, Inc., the Court of Appeals for the District of Columbia Circuit ruled today that a district court erred in allowing the Department of Energy (“DOE”) to use a so-called “voluntary” remand to evade judicial review of its denial of Limnia applications for a renewable energy loan and loan guarantee.

The agency attempted to escape review of its actions after Limnia had prevailed on a motion to dismiss its Administrative Procedure Act (“APA”) claim that DOE arbitrarily and capriciously rejected its applications because of political favoritism.  DOE sought a “voluntary” remand to send the case back to the agency, but instead of seeking remand to reconsider its initial decision to deny Limnia’s applications, DOE required (and the district court agreed) that Limnia must submit brand new applications and pay significantly higher application fees.  This was the agency’s downfall.

The Court of Appeals made clear that “a voluntary remand request made in response to a party’s APA challenge may be granted only when the agency intends to take further action with respect to the original agency decision on review.  Otherwise, a remand may instead function, as it did in this case, as a dismissal of a party’s claims.”

Because DOE refused to reconsider the original decision, the district court’s decision to “close the judicial action left Limnia stuck between a remand and a hard place: Without any means – judicial or administrative – to obtain review of the Department’s 2009 application decisions . . . .  As a result, the District Court’s voluntary remand order was a ‘remand’ in name only.  Limnia’s position was the same as if its case had been dismissed on the merits.”

The decision also addressed whether the district court’s remand order was a final appealable order.  The Court of Appeals held that it was because it marked the end of the district court’s consideration of the case and because Limnia would be unable to seek review of the denied applications if the remand were permitted.  See pages 9–12.

Limnia also had asked the Court of Appeals to clarify the standard of judicial review for district court grants of contested remand motions.  The parties agreed that the standard should be for an abuse of discretion, but the Court of Appeals had not previously ruled on that question.  In a footnote, the Court said that, “[e]ven assuming that the standard of review is abuse of discretion rather than de novo, a question we need not decide, we agree with Limnia that the District Court’s decision must be reversed.”  Although this does not definitively resolve the question, the Court effective said that even under the more lenient abuse-of-discretion standard, the district court erred.  That is, the question presented was not close enough that the district court would have been affirmed under abuse-of-discretion review but reversed if the Court of Appeals considered the issue de novo.

The case now returns to the district court for further proceedings.

The Court’s decision continues CoA Institute’s string of victories on important administrative law issues in front of the D.C. Circuit.  Other significant wins include:

CoA Institute President and CEO John Vecchione argued the case; on brief with him were Josh Schopf and James Valvo.

James Valvo is Counsel & Senior Policy Advisor at Cause of Action Institute and you can follow him on Twitter @JamesValvo.

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05/31/2016

Supreme Court Ruling Protects Property Rights

Today, the United States Supreme Court issued an 8-0 opinion in U.S. Army Corps of Engineers v. Hawkes Company protecting landowners’ right to meaningfully challenge government overreach and arbitrary deprivation of private property rights.  The Court rejected the Corps’ argument that a federal court was not allowed to weigh in on the agency’s assertion of jurisdiction to regulate the Hawkes Company’s use of its own land to mine peat unless the company first spent hundreds of thousands of dollars to complete a time-consuming, complicated government permitting process. Cause of Action (CoA) Institute filed an amicus brief in support of the Hawkes Company, which was represented by the Pacific Legal Foundation.   The Court held that an approved Jurisdictional Determination (approved JD)—a federal agency determination that private property contains “waters of the United States” subject to the Clean Water Act (CWA) and the Environmental Protection Agency (EPA) “Waters of the United States” (WOTUS) regulation— is judicially reviewable under the federal Administrative Procedure Act (APA).

In its amicus brief, CoA Institute argued that the Corps approved JD deprived Hawkes of a property interest protected by the Fifth Amendment to the federal Constitution because it reduced the value of its land by preventing Hawkes from mining peat on it without fear of an EPA enforcement action.  Coupled with substantial criminal and civil penalties for CWA violations, a due process violation would result if immediate APA review of the Corps-approved JD is unavailable.

Justices Kennedy, Thomas, and Alito appear to share CoA Institute’s due process concerns and agree that the Constitution requires immediate judicial review of the federal government’s assertion of jurisdiction to regulate private property under the CWA.  In a concurring opinion joined by Justices Thomas and Alito, Justice Kennedy said that “the Court is right to construe a JD as binding in light of the fact that in many instances it will have a significant bearing on whether the Clean Water Act comports with due process.”  Justice Kennedy wrote that the CWA, “especially without the JD procedure were the Government permitted to foreclose it, continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.”  CoA Institute applauds this unanimous Supreme Court decision protecting landowner property and due process rights.

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