Administrative Procedure Act

Azar v. Allina Health Services

Issues

Under either Sections 1395hh(a)(2) or 1395hh(a)(4) of the Medicare Act, did the Department of Health and Human Services err in not providing notice and an opportunity for comment before interpreting Medicare Part C enrollees to be “entitled to benefits under Part A” of Medicare, which thereby altered one of the calculations used to determine hospitals’ Medicare reimbursement payments?

The Supreme Court will decide whether Sections 1395hh(a)(2) or 1395hh(a)(4) of the Medicare Act requires the Department of Health and Human Services to provide notice and an opportunity for comment when issuing an interpretation of the Medicare Act that affects calculations involving Medicare Part C patients and Medicare payments. Petitioner Alex M. Azar II, the Secretary of Health and Human Services, argues that the agency’s issuance of a legally nonbinding interpretation of the Medicare Act that affected Medicare payment could not substantively affect legal standards and therefore did not trigger the notice-and-comment requirements of Sections 1395hh(a)(2) or 1395hh(a)(4). Respondents Allina Health Services et al. contend that this issuance was legally significant because hospitals and contractors were required to follow it, therefore triggering the notice-and-comment requirements of both Subsections (a)(2) and (a)(4). The Court’s decision could affect the administration of the Medicare Program, including the Department of Health and Human Services’ ability to respond swiftly to frequent Medicare changes and its ability to accurately anticipate the financial impacts of its issuances.

Questions as Framed for the Court by the Parties

Whether 42 U.S.C. § 1395hh(a)(2) or § 1395hh(a)(4) required the Department of Health and Human Services to conduct notice-and-comment rulemaking before providing the challenged instructions to a Medicare administrative contractor making initial determinations of payments due under Medicare.

The federal government, through the Department of Health and Human Services (“HHS”), provides Americans who are at least 65 years old or disabled with health insurance through the multi-part Medicare program. Allina Health Servs. v.

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Becerra v. Empire Health Foundation

Issues

Did the Secretary of the Health and Human Services permissibly include in a hospital’s Medicare reimbursement calculation all the days that a hospital treated patients who satisfied the requirements to be entitled to Medicare Part A benefits, regardless of whether Medicare paid the hospital for those particular days?

This case asks the Supreme Court to determine whether an agency had the authority to interpret the Medicare statute and change the calculation of payments distributed to hospitals that serve low-income patients who receive Medicare benefits. Petitioner Xavier Becerra, the Secretary of Health and Human Services, argues that the Department of Health and Human Services properly followed the procedural and substantive requirements of the Administrative Procedure Act when implementing its interpretation of the meaning of “entitled to” Medicare benefits in effecting a new calculation for determining two different pools of low-income patients. Respondent Empire Health Foundation counters that the agency’s rule causes a severe undercount of the low-income patient pool, causing those hospitals that serve indigent patients to receive a significantly lower reimbursement amount. The outcome of this case has important implications for the distribution of Medicaid funding and the extension of deference to government agencies’ reasonable interpretations of legislation.

Questions as Framed for the Court by the Parties

Whether, for purposes of calculating additional payment for hospitals that serve a “significantly disproportionate number of low-income patients,” the secretary of health and human services has permissibly included in a hospital’s Medicare fraction all of the hospital’s patient days of individuals who satisfy the requirements to be entitled to Medicare Part A benefits, regardless of whether Medicare paid the hospital for those particular days.

The Medicare program currently provides additional payments, known as the disproportionate-share-hospital (“DSH”) adjustment, to hospitals that treat a significantly higher number of low-in

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Corner Post, Inc. v. Board of Governors of the Federal Reserve System

Issues

Whether a plaintiff’s Administrative Procedure Act claim “first accrues” under 28 U.S.C. § 2401(a) when an agency issues a rule—regardless of whether that rule injures the plaintiff on that date—or when the rule first causes a plaintiff to “suffer[] legal wrong” or be “adversely affected or aggrieved.”

This case asks the Supreme Court to decide whether Corner Post, Inc.’s (“Corner Post”) claim under the Administrative Procedure Act was barred under a particular statute of limitation, and whether that six-year statute began running 2011 when the Board of Governors of the Federal Reserve (“Federal Reserve”) published their regulation, or in 2018 when Corner Post was first founded and affected by it. Corner Post asserts that interpreting statutes of limitations to start when harm is inflicted on plaintiffs is consistent with historic models of statutory interpretation and fairness. The Federal Reserve counters that the statute in question was clear in its terms and intentions to give administrative agencies a distinct time period during which to expect legal challenges, and as such the six-year statute would begin with the promulgation of the regulation. The outcome of this case has serious implications for administrative law and statutory interpretation, particularly with respect to the practicability of suing agencies for long-standing policies.

Questions as Framed for the Court by the Parties

Whether a plaintiff’s Administrative Procedure Act claim “first accrues” under 28 U.S.C. § 2401(a) when an agency issues a rule—regardless of whether that rule injures the plaintiff on that date—or when the rule first causes a plaintiff to “suffer[] legal wrong” or be “adversely affected or aggrieved.”

In 2010, Congress amended the Electronic Fund Transfer Act to address fees for consumer debit transactions charged to merchants, “interchange fees,” by debit-card-issuing banks (e.g., Visa and Mastercard).  

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Department of Commerce v. New York

Issues

Can a district court order the collection of evidence outside the administrative record—including compelling a high-ranking government official’s deposition—without any evidence showing that the decisionmaker did not believe the objective reasons behind the administrative record, irreversibly prejudged the issue, or acted on a legally forbidden basis?

Was the Department of Commerce’s decision to add a citizenship question to the 2020 census unlawful—either under the Administrative Procedure Act or the Enumeration Clause of the Constitution?

In addition to determining whether the Census Bureau’s addition of a citizenship question to the 2020 Census was lawful, the Court must also determine whether the Court can order discovery outside the administrative record, including a deposition of the Secretary of Commerce. The Department of Commerce argues that the deposition substantially intrudes on the Secretary’s job because there is no showing of bad faith nor extraordinary circumstances which warrant the additional discovery. The Department of Commerce also posit that the addition of the citizenship question was not arbitrary and capricious, was in accordance with law, and did not violate the Enumeration Clause of the Constitution. The Department of Commerce finally contends that adding a citizenship question would provide more accurate citizenship information and help enforce the Voting Rights Act. However, the State of New York and the New York Immigration Coalition assert that the Secretary exhibited bad faith by submitting an incomplete record and they contend that his reasons for doing so are incomplete and pretextual. They argue that because he is uniquely and personally involved in adding the citizenship question, extraordinary circumstances warrant his deposition. The State of New York and the New York Immigration Coalition counter that adding a citizenship question would lower response rates from noncitizens and affect apportionment of representatives.  

Questions as Framed for the Court by the Parties

(1) Whether the district court erred in enjoining the secretary of the Department of Commerce from reinstating a question about citizenship to the 2020 decennial census on the ground that the secretary’s decision violated the Administrative Procedure Act, 5 U.S.C. 701 et seq;

(2) whether, in an action seeking to set aside agency action under the APA, a district court may order discovery outside the administrative record to probe the mental processes of the agency decisionmaker—including by compelling the testimony of high-ranking executive branch officials —without a strong showing that the decisionmaker disbelieved the objective reasons in the administrative record, irreversibly prejudged the issue, or acted on a legally forbidden basis; and

(3) whether the secretary’s decision to add a citizenship question to the decennial census violated the enumeration clause of the U.S. Constitution.

The Constitution requires that the United States population be counted every ten years. New York v. United States Department of Commerce (“N.Y. v. Department”), at 2.

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Department of Homeland Security v. Regents of the University of California

Issues

Is the Department of Homeland Security’s (“DHS”) rescission of the Deferred Action for Childhood Arrivals policy judicially reviewable, and did DHS violate the Administrative Procedure Act’s requirements in rescinding this policy?

This case consolidates three lawsuits, together claiming that the Department of Homeland Security’s (“DHS”) decision to rescind the Deferred Action for Childhood Arrivals (“DACA”) policy is unlawful. Before the Supreme Court, DHS argues that the DACA rescission is unreviewable agency action, that it complied with the Administrative Procedure Act’s (“APA”) requirements, and that DACA is unlawful. In response, various states, individual DACA recipients, and organizations argue that DHS did not consider all data, failed to offer a sufficient justification for its decision, and improperly relied on the conclusion that DACA was unlawful. The case’s outcome will have important implications for the hundreds of thousands of current DACA recipients and their communities, immigration enforcement policies, and the economy.

Questions as Framed for the Court by the Parties

(1) Whether the Department of Homeland Security’s decision to wind down the Deferred Action for Childhood Arrivals policy is judicially reviewable; and (2) whether DHS’s decision to wind down the DACA policy is lawful.

In 2012, the Department of Homeland Security (“DHS”) introduced the Deferred Action for Childhood Arrivals (“DACA”) program. See Regents of the Univ. of Cal. v. DHS at 21.

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Digital Realty Trust, Inc. v. Somers

Issues

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, do the anti-retaliation protections for whistleblowers apply to an individual who reports a securities law violation internally but who has not reported it to the Securities and Exchange Commission?

This case asks the Supreme Court to clarify whether the anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) provides protection for individuals who report fraud or corporate misconduct internally and not to the Securities and Exchange Commission (“SEC”). Although the statutory definition of “whistleblower,” as well as previous SEC interpretation of the statute, indicate that an individual must report misconduct to the SEC to reap the benefits of the anti-retaliation provision, the SEC has recently changed its interpretation. Under its new interpretation, the SEC has found that even those who only report to internal senior management have a right to these protections. Digital Realty Trust, Inc. (“DRT”) argues that the SEC’s interpretation is at odds with the clear meaning of the Dodd-Frank Act’s provisions and was not issued in a procedurally valid manner. Paul Somers, a former employee of DRT, counters that the term “whistleblower” in the Dodd-Frank Act is ambiguous and that the SEC’s interpretation is reasonable and valid. With this decision, the Supreme Court will determine the statutory rights of securities violation whistleblowers and what procedures whistleblowers must use when reporting in order to invoke the anti-retaliation protections prescribed by the Dodd-Frank Act.

Questions as Framed for the Court by the Parties

Whether the anti-retaliation provision for “whistle-blowers” in the Dodd-Frank Wall Street Reform and Consumer Protection Act extends to individuals who have not reported a violation of the securities laws to the Securities and Exchange Commission and thus fall out-side the Act’s definition of a “whistleblower.”

Petitioner Digital Realty Trust, Inc. (“DRT”) is a corporation that employed Respondent Paul Somers (“Somers”) as Vice President of Portfolio Management from 2010 until they fired him in April 2014. See Brief for Petitioner, Digital Realty Trust, Inc., at 9.

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FERC v. Electric Power Supply Association

Issues

May the Federal Energy Regulatory Commission (“FERC”) pay retail customers to consume less electricity in order to balance supply and demand in the wholesale-market electricity grid?

 

The Federal Power Act (“FPA”) empowers the Federal Energy Regulatory Commission (“FERC”) to regulate the transmission and sale of electric power in interstate commerce. See Electric Power Supply Ass’n v. FERC, 753 F.3d 216, 219 (D.C. Cir. 2014). FERC issued Order 745 to incentivize retail customers to reduce electricity consumption when economically efficient. See Electric Power Supply, 753 F.3d at 219. Under the new order, the cost of incentive payments to retail customers to encourage reduced energy consumption is subsidized by entities participating in the wholesale electricity market. See id. The Electric Power Supply Association (“EPSA”), along with four energy industry associations, brought suit under the Administrative Procedure Act alleging that the FERC’s Order 745 violates the  FPA,  because it invades the states’ exclusive jurisdiction to regulate the retail market. See id. at 218. The Supreme Court will consider whether (1) the FPA extends authority to the FERC to create a methodology that  wholesale-market  operators must use to calculate the compensation payments in the demand response scheme, and (2) whether the court of appeals erred in holding that Order 745 is arbitrary and capricious. See Petition for Writ of Certiorari, FERC v. Electric Power Supply Ass’n et al. at 35–36. The Court’s resolution of this case will impact the regulatory balance in the energy sector between federal and state governments. See Brief of Amici Curiae CES and Dr. Silkman, in Support of Respondent at 4.

Questions as Framed for the Court by the Parties

  1. Did the Federal Energy Regulatory Commission reasonably conclude that it has authority under the Federal Power Act, 16 U.S.C. 791a et seq., to regulate the rules used by operators of wholesale electricity markets to pay for reductions in electricity consumption and to recoup those payments through adjustments to wholesale rates?
  2. Did the Court of Appeals err in holding that the rule issued by the Federal Energy Regulatory Commission is arbitrary and capricious?

Under the The Federal Power Act (“FPA”), the Federal Energy Regulatory Commission (“FERC”) is charged with regulating the transmission and sale of electric power in interstate commerce. See Electric Power Supply Ass’n v. FERC, 753 F.3d 216, 219 (D.C. Cir.

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Jesinoski v. Countrywide Home Loans

Issues

May a borrower simply provide written notice to a creditor to exercise a statutory right to rescind a home-secured loan under the Truth In Lending Act, or must the borrower file a lawsuit to exercise that right?

This case presents the Supreme Court with an opportunity to determine the procedural requirements for exercising the right to rescission under the Truth In Lending Act (“TILA”). The Jesinoskis argue that if a creditor fails to strictly comply with TILA’s terms, then borrowers only need to provide written notice in order to rescind a loan any time within a three-year period. Meanwhile, Countrywide maintains that any rescission occurring after the first three days of the loan requires a lawsuit if the rescission is contested by the creditor. This case ultimately will determine who bears the cost of litigation in rescinding home-secured loans, and also determines the scope of TILA’s protection for borrowers.

Questions as Framed for the Court by the Parties

The Truth in Lending Act provides that a borrower “shall have the right to rescind the transaction until midnight of the third business day following . . . the delivery of the information and rescission forms required under this section ... by notifying the creditor ... of his intention to do so.” 15 U.S.C. § 1635(a). The Act further creates a “[t]ime limit for [the] exercise of [this] right,” providing that the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction” even if the “disclosures required ... have not been delivered.” Id. § 1635(f). 

The question presented is: 

Does a borrower exercise his right to rescind a transaction in satisfaction of the requirements of Section 1635 by “notifying the creditor” in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or must a borrower file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held?

On February 23, 2007, Larry and Cheryle Jesinoski refinanced their home for a $611,000 loan from Countrywide Home Loans. See Jesinoski v. Countrywide Home Loans, Inc., No. 11-cv-0474-DWF-FLN, 2012 WL 1365751, at *1 (D. Minn. Apr. 19, 2012).

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Acknowledgments

The authors would like to thank Professor Cynthia Farina for her guidance.

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Kisor v. Wilkie

Issues

Should the Supreme Court overrule Auer v. Robbins and Bowles v. Seminole Rock & Sand Co., which direct courts to defer to an agency’s reasonable interpretation of its own ambiguous regulation?

This case asks the Supreme Court to determine whether Auer deference—a rule that requires a court to defer to an agency’s reasonable interpretation of its own ambiguous regulation—ought to be overruled. James Kisor contends that the Auer doctrine is not part of the lawmaking authority that Congress has delegated to agencies, but it instead circumvents the limits that Congress has placed on their authority, is inconsistent with the U.S. Constitution, and lacks any policy justification. Robert Willkie, the Secretary of Veterans Affairs, counters that, while there should be significant limitations on Auer deference, altogether discarding the doctrine would have heavy practical consequences for both agencies and regulated parties. The outcome of this case will affect the ability of regulated individuals and entities to comply with agency regulations and to challenge agency interpretations of their own regulations.

Questions as Framed for the Court by the Parties

Whether the Supreme Court should overrule Auer v. Robbins and Bowles v. Seminole Rock & Sand Co., which direct courts to defer to an agency’s reasonable interpretation of its own ambiguous regulation.

Petitioner James L. Kisor is a veteran who served on active duty in the Marine Corps from 1962 to 1966. Kisor v. Shulkin at 1361. Kisor filed a claim for disability compensation benefits with the Department of Veteran Affairs (“VA”) Regional Office in Portland, Oregon in 1982, claiming that he suffered from post-traumatic stress disorder (“PTSD”).

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Lucia v. Securities and Exchange Commission

Issues

For the purposes of the Constitution’s Appointments Clause, are administrative law judges of the Securities and Exchange Commission officers, who must be appointed in accordance with the Constitution, or employees, who can simply be hired by the Securities and Exchange Commission?

 

This case asks the Supreme Court to decide whether the Administrative Law Judges (“ALJs”) of the Securities and Exchange Commission (“SEC”) are “Officers of the United States” within the meaning of the Appointments Clause of the Constitution. If the SEC ALJs are officers, then they cannot simply be hired like a regular government employee; instead, they must be hired according to the procedures required by the Appointments Clause. The SEC successfully argued before the D.C. Circuit that the ALJs are not officers; but following the election of President Trump, the U.S. Solicitor general switched the SEC’s position in this case. Both Raymond J. Lucia and the SEC now agree that the SEC ALJs are officers within the meaning of the Appointments Clause because the SEC ALJs have enough sovereign authority entrusted to their discretion to require the structural power-check of the appointment process. Anton Metlitsky, the Court-appointed amicus supporting the judgment below, argues that SEC ALJs are not officers because they do not have the power to make final decisions that bind either the SEC or third parties. The Court’s holding in this case could greatly impact the SEC’s enforcement regime and all the proceedings currently pending before SEC ALJs.

Questions as Framed for the Court by the Parties

Whether administrative law judges of the Securities and Exchange Commission are Officers of the United States within the meaning of the Appointments Clause?

In response to a Securities and Exchange Commission (“SEC” or “Commission”) enforcement action before an Administrative Law Judge (“ALJ”), Raymond J. Lucia and his investment company, Raymond J. Lucia Companies, Inc. (collectively, “Lucia”) challenged the constitutional validity of the SEC’s ALJs. Raymond J. Lucia Companies, Inc. v. SEC, 832 F.3d 277, 282–83 (D.C. Cir. 2016).

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