The U.S. Supreme Court dominated headlines this term for a number of controversial decisions, but the federal appeals courts were also busy. While their decisions can often be lost in the noise, the U.S. Supreme Court takes up only 2% of petitions, meaning the word of appeals courts is often the final say.
Over the past year, the 12 circuit courts of appeals were busy considering novel and emerging issues, federal administrative powers, constitutional protections and more.
Administrative Powers
It’s been more than two years since the COVID-19 pandemic impacted the U.S., and legal disputes created by the virus are still being decided by the courts.
With the U.S. Food and Drug Administration’s first approval of a COVID-19 vaccine in August 2021, a bevy of labor and employment law questions arose over possible workplace requirements.
The most famous case to make it into federal courts was a challenge to the Occupational Safety and Health Administration’s vaccine-or-test emergency temporary standard rule. The Nov. 4, 2021 rule required employers with more than 100 employees to roll out workplace vaccination requirements and implement weekly testing for unvaccinated employees. The ETS also required the 17 million workers at 76,000 health care facilities that participate in Medicare or Medicaid to get vaccinated.
Just two days after the rule was announced, the New Orleans-based 5th Circuit Court of Appeals issued a stay that prevented the ETS from going into effect. In its Nov. 12, 2021 review of the initial stay, the panel of judges for the 5th Circuit upheld its decision and argued that under the commerce clause and nondelegation doctrine, OSHA doesn’t have the authority “to authorize a workplace safety administration in the deep recesses of the federal bureaucracy to make sweeping pronouncements on matters of public health affecting every member of society in the profoundest of ways.”
The 6th Circuit Court of Appeals, based out of Cincinnati, later lifted the stay in December 2021 and the rule went into effect for three days before the U.S. Supreme Court struck it down. The court agreed with the 5th Circuit that the ETS overstepped OSHA’s authority but it did allow the Medicare and Medicaid rule to go into effect.
Again reigning in the power of federal administrations, the 5th Circuit in May ruled that by holding in-house trials presided over by administrative law judges, the U.S. Securities and Exchange Commission violated the constitutional right to a jury trial.
After an investigation, the SEC accused hedge fund manager and conservative talk show radio host George Jarkesy of launching two hedge funds to raise $30 million while lying to investors about the funds and inflating the value of the assets. After two appeals in the D.C. Circuit Court and an order from the U.S. Supreme Court over the SEC’s administrative law judges, the SEC found Jarkesy and other defendants liable for securities fraud and issued fines.
Appealing to the 5th Circuit, Jarkesy argued that the administrative trial deprived him of a right to a jury trial and Congress’ designation of power to the SEC was unconstitutional. The appeals court agreed, citing the common law nature of accusations of fraud and ruling that restrictions on how ALJs can be removed also violated the Constitution.
In the opinion’s footnotes, the majority wrote “the fact that the modern administrative state is real and robust does not mean courts are never called to declare its limits.”
COVID-19 Still on the Scene
While federal agencies saw COVID-19 requirements head to court, a number of state laws around vaccines also made it to the circuit courts.
In the years leading up to the pandemic and in response to outbreaks of vaccine-preventable diseases, a handful of states rolled back their religious or philosophical exemptions to vaccine requirements at schools and health care facilities. In the past year, a few cases have challenged not allowing exemptions for religious beliefs.
While two appeals courts came to the same conclusion over the issue, several U.S. Supreme Court justices indicated that they’d be open to hearing the issue.
A division of the 1st Circuit Court of Appeals in October 2021 upheld a longtime Maine law that requires health care workers to get vaccinated against certain contagious diseases. The state amended the law in 2019 to only allow the medical exemption.
After Maine’s Center for Disease Control implemented an Aug. 12, 2021 rule requiring all employees at licensed health care facilities get vaccinated against COVID-19, nine healthcare workers filed a suit claiming the law violated constitutional protections under the free exercise clause, supremacy clause and equal protection clause. Specifically, the workers claimed cells from aborted fetuses were used by vaccine manufacturers to develop or create COVID-19 vaccines and their religious views prevent them from using any product connected to abortions. A district court denied the workers’ request for an injunction against the rule, which the 1st Circuit upheld, finding that the state law was religiously neutral and applies across the board.
The U.S. Supreme Court declined to grant injunctive relief after the 1st Circuit’s decision and declined to hear the case earlier this year. In its denial of relief, three of the court’s justices — Justice Neil Gorsuch, Justice Clarence Thomas and Justice Samuel Alito — dissented, calling the case “an important constitutional question, a serious error, and an irreparable injury.”
A similar New York law was also upheld by the 2nd Circuit Court of Appeals in November 2021.
Like the Maine case, a number of medical workers asked for injunctive relief from a New York rule that required COVID-19 vaccines and didn’t carve out religious exemptions. They claimed the COVID-19 vaccines were developed with cell lines connected to aborted fetuses and their religious beliefs prevented them from receiving the vaccines.
The 2nd Circuit upheld denial of relief against the rule, finding that claims the rule violated the free exercise clause probably wouldn’t succeed as the rule was neutral and generally applicable.
The U.S. Supreme Court denied injunctive relief and certiorari review with the same three justices dissenting. Justice Thomas wrote he would’ve “address[ed] this issue now in the ordinary course, before the next crisis forces us again to decide complex legal issues in an emergency posture.”
Another COVID-19 matter that the circuits are in agreement about is insurance coverage.
According to Penn Law’s Covid Coverage Litigation Tracker, more than 2,000 insurance coverage dispute claims have been filed in federal courts since the onset of the pandemic. Most have centered around lost business income and additional expenses incurred by businesses as a result of COVID, with restaurants and bars filing the most claims.
Most states haven’t considered coverage disputes, but circuit courts have been in agreement, generally siding with insurers on the disputes.
To name a few, the 1st Circuit Court of Appeals in June ruled pandemic losses don’t trigger business interruption coverage of a commercial property insurance policy. The 4th Circuit took a similar stance in March, ruling that event restrictions resulting in income loss don’t fall under property coverage. And last August, the 3rd Circuit sent a pair of coverage disputes back to state courts to consider the novel questions.
The Weird, the New and the Complicated
While they might not have sweeping implications, several circuit court decisions deserve honorable mentions for weighing in on new, unusual and emerging issues.
In January 2021, a panel of the 3rd Circuit Court of Appeals ruled that a proposed Philadelphia safe injection facility was in violation of federal law.
Safehouse, a harm reduction nonprofit, was hoping to open the country’s first safe injection site where medical staff could oversee people taking illegal substances to reduce overdoses and connect them to treatment programs. By opening the property to others for use of illegal drugs, the 3rd Circuit found, the nonprofit would’ve broken federal law. “Although Congress passed [21 U.S. Code] 856 to shut down crack houses, its words reach well beyond them. Safehouse’s benevolent motive makes no difference,” wrote the court majority.
The 4th Circuit Court of Appeals in May ruled on a new question: does participation in a modern insurrection or rebellion against the U.S. prevent someone from running for office?
The question came to court after a group of North Carolina voters filed a challenge against state representative Madison Cawthorn, who was running for Congress, arguing that he played an active role in encouraging the Jan. 6, 2021 attack on the U.S. Capitol. They argued his encouragement was an insurrection against the U.S. and under law enacted after the Civil War, he was disqualified from serving in Congress.
Suing the voters, Cawthorne argued that the 1872 Amnesty Act, which lifted most penalties on former Confederate soldiers, applied to future rebellions and insurrections. The 4th Circuit wasn’t convinced and wrote that the law “does not categorically exempt all future rebels and insurrectionists from the political disabilities that otherwise would be created by Section 3 of the [14th] Amendment.”
Answering another novel question, the 9th Circuit Court of Appeals found federal copyright protections apply to products with certain types of THC. The case came up after a California e-cigarette brand accused a competitor of making a replica of its product which was trademarked. The e-cigarette included delta-8 THC, which is derived from cannabis and can have intoxicating effects similar to those created by the main psychoactive component of marijuana, delta-9 THC. The competitor argued that the delta-8 THC is illegal under federal law, and therefore federal trademark protections couldn’t apply to the product.
The 9th Circuit disagreed and looked at 2018’s Farm Act which removed hemp, or cannabis with low levels of delta-9 THC, from the Controlled Substances Act’s definition of marijuana. While delta-8 THC can have psychoactive effects, the 9th Circuit ruled Congress in 2018 removed it from the CSA. “The record on appeal convinces us that AK Futures’ delta-8 THC products are lawful under the plain text of the Farm Act and may receive trademark protection,” the court wrote.
Climate Issues
As the effects of climate change become more pronounced, two circuit courts answered questions about where lawsuits over its impacts of it belong. The U.S. Supreme Court’s 2021 decision in BP v. Baltimore clarified the jurisdiction of various climate change lawsuits and the court remanded a handful of cases back to federal circuits to consider proper jurisdiction.
The 9th Circuit Court of Appeals in April ruled that a lawsuit filed by several California cities belonged in state courts, not federal courts.
A series of lawsuits in 2017 named a long list of gas and energy companies and claimed that their activities had contributed to climate change, resulting in damages like loss of beach shores, public health impacts and more. While the energy companies argued the claims should be in federal courts, the 9th Circuit disagreed, finding that the “novel and sweeping causes of action” raised by the plaintiffs didn’t override its deep-rooted rule to protect the jurisdiction of state courts.
Similarly, the 10th Circuit Court of Appeals in March decided a lawsuit by Boulder against Suncor Energy and Exxon Mobil shouldn’t be heard in federal courts. The energy companies didn’t assert sufficient claims to establish federal jurisdiction over the state-law claims, according to the court.
