Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Hiran Management, a small karaoke restaurant in Houston, Texas, employed eight front-of-house workers who became dissatisfied with their manager’s practices, including being assigned extra duties without increased pay and inconsistent compensation for “shift supervisor” roles. After a contentious meeting with management, the employees walked out, went on strike, and presented a list of demands. The employer subsequently terminated all eight striking employees.Following these terminations, the National Labor Relations Board (NLRB) filed an administrative complaint, alleging that Hiran Management violated section 8(a)(1) of the National Labor Relations Act (NLRA) by firing the employees for engaging in protected concerted activity. An administrative law judge (ALJ) ruled in favor of the NLRB, and the Board adopted the ALJ’s findings with minor adjustments. The Board ordered Hiran to cease its unfair labor practices, reinstate the employees, and compensate them for lost earnings and all other direct or foreseeable pecuniary harms resulting from the terminations.Hiran Management petitioned the United States Court of Appeals for the Fifth Circuit for review, while the NLRB sought enforcement of its order. The Fifth Circuit held that the NLRB lacks statutory authority under the NLRA to award full compensatory damages for all direct or foreseeable pecuniary harms, as such damages are legal rather than equitable remedies. The court granted Hiran’s petition in part, denied the NLRB’s enforcement petition in part, and remanded the case for further proceedings consistent with its opinion, limiting the NLRB’s remedial authority to equitable relief such as reinstatement and backpay. View "Hiran Management v. National Labor Relations Board" on Justia Law

A natural gas pipeline company replaced three aging compressor units along its pipeline, which transports gas from Canada to the Pacific Northwest. The replacements used newer, higher-capacity compressors, but the company initially installed controls to limit their output to match the old units. After completing the replacements, the company sought federal approval to expand pipeline capacity by removing those restrictions and making other upgrades, securing long-term contracts for the added capacity with new customers. The company excluded the cost of the earlier compressor replacements from the expansion’s cost estimate, assuming those costs would remain allocated to existing customers.The Federal Energy Regulatory Commission (FERC) approved the compressor replacements under its automatic authorization regulation, finding no further environmental review was needed. Later, FERC issued a certificate for the expansion project under the Natural Gas Act, after preparing an environmental impact statement (EIS) as required by the National Environmental Policy Act (NEPA). FERC declined to treat the compressor replacements as part of the expansion for environmental or rate-setting purposes and denied the company’s request for a “predetermination” that expansion costs could be rolled into existing rates in future proceedings. Multiple parties, including two states and environmental groups, sought rehearing and then judicial review, challenging FERC’s decisions on environmental review, rate allocation, and public need.The United States Court of Appeals for the Fifth Circuit reviewed the consolidated petitions. The court held that the pipeline company had standing and its claims were ripe. On the merits, the court found FERC’s decisions were not arbitrary or capricious. FERC reasonably excluded the compressor replacements from the expansion’s environmental and rate analysis, applied its established policies for rate-setting and public need, and provided sufficient environmental review under NEPA. The court denied all petitions for review. View "Gas Transmission Northwest v. Federal Energy Regulatory Commission" on Justia Law

A flight attendant employed by an airline and represented by a labor union was terminated after sending graphic anti-abortion images and messages to the union president and posting similar content on social media. The employee, a pro-life Christian and vocal opponent of the union, had previously resigned her union membership but remained subject to union fees. The union’s leadership had participated in the Women’s March, which the employee viewed as union-sponsored support for abortion, prompting her messages. The airline investigated and concluded that while some content was offensive, only certain images violated company policy. The employee was terminated for violating social media, bullying, and harassment policies.Following termination, the employee filed a grievance, which the union represented. The airline offered reinstatement contingent on a last-chance agreement, which the employee declined, leading to arbitration. The arbitrator found just cause for termination. The employee then sued both the airline and the union in the United States District Court for the Northern District of Texas, alleging violations of Title VII and the Railway Labor Act (RLA), among other claims. The district court dismissed some claims, allowed others to proceed, and after a jury trial, found in favor of the employee on several Title VII and RLA claims. The court awarded reinstatement, backpay, and issued a broad permanent injunction against the airline and union, later holding the airline in contempt for its compliance with the judgment.On appeal, the United States Court of Appeals for the Fifth Circuit reversed the judgment for the employee on her belief-based Title VII and RLA retaliation claims against the airline, remanding with instructions to enter judgment for the airline on those claims. The court affirmed the judgment against the airline on practice-based Title VII claims and affirmed all claims against the union. The court vacated the permanent injunction and contempt sanction, remanding for further proceedings, and granted the employee’s motion to remand appellate attorney’s fees to the district court. View "Carter v. Transport Workers Union of America Local 556" on Justia Law

An advanced practice registered nurse in Texas, who maintained an active nursing license and a Prescriptive Authority Number, did not have a current prescriptive-authority agreement with a physician, as required by Texas law to prescribe drugs. She was not accused of any misconduct but was attending an educational program to transition careers. Because she lacked a prescriptive-authority agreement, the Drug Enforcement Administration (DEA) initiated proceedings to revoke her federal Certificate of Registration, which allows her to handle controlled substances.An administrative law judge within the DEA recommended revocation, finding that she was “without state authority to handle controlled substances.” The Administrator of the DEA adopted this recommendation and revoked her registration. The nurse then petitioned for review directly to the United States Court of Appeals for the Fifth Circuit, as permitted by statute.The United States Court of Appeals for the Fifth Circuit reviewed the DEA’s action and concluded that the agency exceeded its statutory authority under 21 U.S.C. § 824(a)(3). The court held that the statute requires both the loss of a state license or registration and the lack of state authorization to handle controlled substances before the DEA may revoke a registration. Because the nurse still held all relevant state licenses and registrations, the court determined that the DEA lacked authority to revoke her registration solely due to the absence of a prescriptive-authority agreement. The court granted the petition for review, vacated the DEA’s revocation order, and remanded the case to the agency for further proceedings consistent with its opinion. View "DeWitt v. Drug Enforcement Administration" on Justia Law

Texas submitted a State Implementation Plan (SIP) to the Environmental Protection Agency (EPA) in 2012, asserting that its emissions did not significantly contribute to ozone pollution in downwind states and therefore no additional mitigation was necessary. The SIP included charts of declining ozone levels in certain metropolitan areas, a brief discussion of wind patterns, a map of 2010 ozone levels, and some raw measurement data, but did not analyze or quantify Texas’s impact on other states’ air quality. Texas’s submission focused on areas geographically close to Texas and did not address whether its emissions might interfere with maintenance of air quality standards in other states.After determining the SIP was technically complete, the EPA delayed substantive review pending the Supreme Court’s decision in EPA v. EME Homer City Generation, L.P., which clarified the agency’s authority under the Clean Air Act’s Good Neighbor Provision. During the delay, EPA provided Texas with updated modeling data showing that Texas emissions contributed to downwind ozone problems, but Texas did not supplement its SIP. In 2016, EPA formally disapproved the SIP, finding it failed to address statutory requirements, particularly by not evaluating impacts on maintenance areas and by relying on outdated control measures. Texas and industry groups petitioned the United States Court of Appeals for the Fifth Circuit for review, arguing EPA’s process was procedurally and substantively flawed.The United States Court of Appeals for the Fifth Circuit denied the petition. The court held that EPA’s review complied with statutory and procedural requirements, and that the agency acted within its authority in disapproving the SIP. The court found EPA’s reasoning was not arbitrary or capricious, and that the SIP’s failure to analyze Texas’s impact on all relevant downwind areas, including maintenance areas, justified disapproval. The court also rejected arguments that EPA was required to approve the SIP due to procedural delays or reliance on updated data. View "State of Texas v. EPA" on Justia Law

Two former officers and directors of a Texas community bank faced regulatory action after the bank failed in 2013 following significant losses during the 2008 financial crisis. The Office of the Comptroller of the Currency (OCC) alleged that the individuals engaged in unsafe and unsound banking practices, breached fiduciary duties, and filed materially inaccurate reports. The OCC’s claims centered on three main strategies: the bank’s practice of making loans to finance purchases of its holding company’s stock (which were then counted as capital), aggressive and risky sales of real estate owned by the bank, and improper accounting for nonaccrual loans. These actions allegedly overstated the bank’s capital and masked its true financial condition, ultimately resulting in substantial losses.After the OCC initiated an enforcement action in 2017, the matter was reassigned to a new Administrative Law Judge (ALJ) following the Supreme Court’s decision in Lucia v. SEC. The new ALJ ratified prior rulings, conducted a hearing, and issued a recommendation. The Comptroller adopted most of the ALJ’s findings but imposed industry bans and civil penalties on both petitioners, concluding that their conduct warranted prohibition from banking and monetary sanctions. The petitioners then sought review from the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit denied the petition for review. The court held that the OCC’s enforcement action fell within the public rights doctrine, so the petitioners were not entitled to a jury trial under the Seventh Amendment. The court also found that the ALJ’s appointment was constitutionally valid, the enforcement action was timely under the applicable statute of limitations, and the agency’s evidentiary and procedural rulings were supported by substantial evidence. The court further upheld the Comptroller’s decision to impose prohibition orders and civil penalties, finding the preponderance of the evidence standard appropriate for such administrative proceedings. View "Ortega v. Office of the Comptroller of the Currency" on Justia Law

The Securities and Exchange Commission (SEC) adopted two rules intended to increase transparency in the securities lending and short sale markets. Securities lending involves temporarily transferring securities from a lender to a borrower for a fee, and is closely tied to short selling, where investors sell securities they do not own, hoping to profit from a price decline. The SEC found both markets to be opaque, making regulatory oversight difficult. To address this, the SEC, under authority from the Dodd-Frank Act, promulgated the Securities Lending Rule (requiring prompt reporting of securities loans) and the Short Sale Rule (mandating monthly aggregate reporting of short sale positions by institutional investment managers).The petitioners, associations representing institutional investment managers, challenged both rules before the United States Court of Appeals for the Fifth Circuit. They argued that the rules were arbitrary and capricious, exceeded the SEC’s statutory authority, conflicted with each other, and that the SEC failed to consider their cumulative economic impact. They also raised procedural objections, including inadequate opportunity for public comment and concerns about the extraterritorial application of the Short Sale Rule. The SEC defended its process and statutory authority, maintaining that the rules addressed distinct regulatory gaps and that its economic analysis was sufficient.The United States Court of Appeals for the Fifth Circuit held that the SEC acted within its statutory authority in adopting both rules and provided adequate opportunity for public comment. The court also found that the SEC reasonably explained its choices regarding reporting systems and that the Short Sale Rule did not have impermissible extraterritorial reach. However, the court concluded that the SEC failed to consider and quantify the cumulative economic impact of the two interrelated rules, as required by the Administrative Procedure Act and the Exchange Act. The court granted the petition for review in part and remanded both rules to the SEC for further proceedings on this issue, while denying the remainder of the petition. View "Natl Assoc Priv Fund Mgr v. SEC" on Justia Law

The case concerns a former CEO of a Texas credit union who was removed from his position after the credit union was placed into conservatorship by state authorities, with the National Credit Union Administration (NCUA) appointed as conservator. The NCUA terminated the CEO, seized property, and allegedly withheld post-termination benefits. The CEO initially sued in Texas state court for those benefits. Before the credit union responded to that suit, the NCUA initiated an administrative enforcement action against him. In response, the CEO filed a federal lawsuit challenging the NCUA’s authority and the constitutionality of the administrative proceedings, raising claims about the removal protections for the administrative law judge, the lack of a jury trial, due process, and the non-delegation doctrine.The United States District Court for the Southern District of Texas dismissed the federal suit for lack of subject matter jurisdiction, finding that 12 U.S.C. § 1786(k)(1) explicitly precludes district court jurisdiction over actions seeking to enjoin or otherwise affect NCUA enforcement proceedings. The district court reasoned that the statutory language was clear and that any challenge to the administrative process must proceed through the statutory review scheme, which provides for review in the courts of appeals after the agency action is final.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the dismissal de novo. The Fifth Circuit held that § 1786(k)(1) explicitly precludes district court jurisdiction over actions seeking to enjoin or otherwise affect NCUA enforcement actions, relying on its recent decision in Burgess v. Whang and Supreme Court precedent interpreting similar statutory language. The court rejected the argument that Congress must specifically reference 28 U.S.C. § 1331 to preclude federal question jurisdiction. The Fifth Circuit affirmed the district court’s dismissal for lack of subject matter jurisdiction. View "Moats v. Natl Crdt Un Admin Bd" on Justia Law

Cornelius Burgess, the former CEO of Herring Bank, was the subject of a Federal Deposit Insurance Corporation (FDIC) enforcement action that began with an investigation in 2010 and formal proceedings in 2014. An Administrative Law Judge (ALJ) recommended in 2017 that Burgess be removed from his position, barred from the banking industry, and fined $200,000. The FDIC Board adopted this recommendation, but the enforcement order was stayed pending the Supreme Court’s decision in Lucia v. SEC, which addressed the constitutionality of ALJ appointments. After Lucia, the case was remanded for a new hearing before a properly appointed ALJ, who again recommended the same sanctions in 2022. Before the FDIC Board could issue its final order, Burgess filed suit in the United States District Court for the Northern District of Texas, seeking to enjoin the Board from issuing its decision on constitutional grounds.The district court found it had jurisdiction to hear Burgess’s claims despite 12 U.S.C. § 1818(i)(1), which generally precludes such jurisdiction. The court denied injunctive relief on Burgess’s claims regarding unconstitutional removal protections for the Board and ALJs, finding he had not shown harm from those provisions. However, it granted an injunction based on his Seventh Amendment claim, concluding he was likely to succeed on the merits and that the other factors for injunctive relief were met. The FDIC appealed the injunction, and Burgess cross-appealed the denial of relief on his removal claims.The United States Court of Appeals for the Fifth Circuit held that 12 U.S.C. § 1818(i)(1) explicitly strips district courts of subject matter jurisdiction to enjoin or otherwise affect the issuance or enforcement of FDIC orders, including on constitutional grounds. The Fifth Circuit reversed the district court’s grant of injunctive relief and remanded with instructions to dismiss the case for lack of subject matter jurisdiction, declining to reach the merits of Burgess’s constitutional claims. View "Burgess v. Whang" on Justia Law

Three employers—SpaceX, Energy Transfer, and Findhelp—each faced unfair labor practice complaints before the National Labor Relations Board (NLRB). Before administrative proceedings began, each employer filed suit in a different federal district court in Texas, challenging the constitutionality of the NLRB’s structure. Specifically, they argued that the dual for-cause removal protections for both NLRB Board Members and Administrative Law Judges (ALJs) unconstitutionally insulated these officials from presidential removal, violating Article II and the separation of powers.Each district court granted a preliminary injunction, halting the NLRB’s proceedings against the respective employer. The courts found that the removal protections for ALJs (and, in one case, for Board Members) were unconstitutional, that the employers would suffer irreparable harm if forced to proceed before an unconstitutionally structured agency, and that the balance of equities and public interest favored injunctive relief. The NLRB appealed, arguing that the district courts lacked jurisdiction under the Norris-LaGuardia Act and that the employers had not shown a likelihood of success or irreparable harm.The United States Court of Appeals for the Fifth Circuit reviewed the consolidated appeals. The court held that the district courts had jurisdiction to enjoin the NLRB’s proceedings, as the employers’ constitutional challenges to the agency’s structure did not “grow out of a labor dispute” within the meaning of the Norris-LaGuardia Act. On the merits, the Fifth Circuit held that the dual for-cause removal protections for NLRB ALJs are unconstitutional, following its own precedent in Jarkesy v. Securities & Exchange Commission. The court further held that the removal protections for Board Members likely violate Article II, as the NLRB’s structure does not fit within the narrow exception recognized in Humphrey’s Executor v. United States. The court also found that being subjected to proceedings before an unconstitutionally structured agency constitutes irreparable harm. The Fifth Circuit affirmed the preliminary injunctions granted by the district courts. View "Space Exploration v. NLRB" on Justia Law