Articles Posted in Government & Administrative Law

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The VA determined that West, a Viet Nam veteran, was eligible for a disability pension. Two days later West died. Four days later—without knowing that West had died—the government sent West a check for $8,660--his pension benefit retroactive to June 2013. In March 2014, a Kentucky probate court appointed West’s ex-wife, Brenda, as the Estate's executor. Brenda endorsed the VA check, the estate’s only cash asset, and deposited it into an escrow account. After three months, the VA determined that West’s estate was not entitled to the money, 38 U.S.C. 5121(a), and directed the bank to wire the $8,660 back to the U.S. Treasury. The bank complied. The Estate did not learn until later that its account had been drained of funds. More than 18 months later, the Estate obtained a Kentucky probate court order requiring the government to return the funds. The government removed the matter to the district court, which remanded the matter back because the $8,660 was already subject to the probate court’s jurisdiction. The Estate unsuccessfully sought attorneys’ fees. The Sixth Circuit reversed the remand order; the dispute can be litigated only under the procedure set forth in the Veterans’ Judicial Review Act, 102 Stat 4105. The court noted “concerns about the government’s expropriation of the Estate’s funds without any advance notice or process.” View "Estate of West v. United States Department of Veterans Affairs" on Justia Law

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In 2010, Earley applied for disability benefits, 42 U.S.C. 423(d)(2)(A), 1382c(a)(3)(B) . In 2012, an ALJ rejected the application on the ground that Earley, who suffered from fibromyalgia, mild carpal tunnel syndrome, panic disorder, degenerative disk disease, and major depression, did not have a covered disability. She applied again for a new period of time. The same ALJ denied her benefits, citing Sixth Circuit precedent (Drummond) as requiring him to give preclusive effect to the work-capacity finding he had made during the first proceeding absent “new and material evidence documenting a significant change in the claimant’s condition.” The district court reversed, concluding that the Drummond “principles of res judicata” apply only when they favor an individual applicant, not the government. The Sixth Circuit disagreed. The key principles protected by Drummond—consistency between proceedings and finality with respect to resolved applications—apply to individuals and the government but do not prevent the agency from giving a fresh look to a new application containing new evidence or satisfying a new regulatory threshold that covers a new period of alleged disability while being mindful of past rulings and the record in prior proceedings. View "Earley v. Commissioner of Social Security" on Justia Law

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Sunrise, an Ohio agricultural cooperative, owns one-third of Lund, which sells crop insurance. Sunrise pays “patronage,” a rebate, to its Ohio and Michigan members based on how much Lund insurance they buy. The Risk Management Agency (RMA) within the USDA, administers Federal Crop Insurance Corporation (FCIC) programs. Patronage payments were prohibited until 2000, when Congress authorized some rebating if permitted under state law. Congress changed course in 2008, prohibiting patronage payments with a grandfather clause, 7 U.S.C. 1508(a)(9)(B)(iii) stating that the prohibition does not apply to a patronage dividend paid: “by an entity that was approved by the [FCIC] to make such payments for the 2005, 2006, or 2007 reinsurance year.” From 2008-2016, Sunrise was approved to pay patronage as a “grandfathered” entity. In 2016, another farming cooperative, Trupointe, merged into Sunrise. Trupointe had 4100 members, did not sell crop insurance, and was not eligible to pay patronage. Sunrise argued to the RMA that under Ohio law and federal tax law, when one company merges into another, the surviving company is the same entity that existed before the merger. The RMA disagreed, concluding that the merger would make Sunrise ineligible to pay patronage and defining “entity” to mean the same entity that it approved for any of the 2005-2007 reinsurance years, with the same structure and relative size; any mergers would be considered a different entity, regardless of name or how taxed. The Sixth Circuit held that the agency was not permitted to impose additional eligibility requirements on approved entities that are unmoored from the statute. View "Sunrise Cooperative v. United States Department of Agriculture" on Justia Law

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Plaintiffs, who profess disbelief in God and one Jewish individual, alleged that the inscription of the Motto “In God We Trust” on U.S. currency, (31 U.S.C. 5112(d)(1) and 5114(b)), violates their rights under the Religious Freedom Restoration Act (RFRA) and constitutional provisions, placing a substantial burden on their religious exercise by causing Plaintiffs to: personally bear a religious message that is the antithesis of what they consider to be truth, and “proselytize for a religious claim.” The Jewish Plaintiff alleged that it is sinful for him to participate in an activity that involves the superfluous printing of God’s name. Plaintiffs alleged that the inscription denies equal dignity to Plaintiffs’ religious views, contributing to cultural stigma. The Sixth Circuit affirmed the dismissal of all claims. RFRA does not require the government to permit Plaintiffs to use their preferred means of payment. Plaintiffs have not plausibly alleged that the inscription substantially burdens their exercise of religion or that the currency statutes intended to discriminate against them or suppress their religion; precedent demonstrates that the statutes do not lack any valid secular purpose. The currency statutes are neutral and generally applicable and only incidentally burden religious practices. Plaintiffs alleged facts showing societal bias against Atheists and suggesting that Congress required and reaffirmed the inscription for Christian religious purposes but have not presented factual allegations plausibly demonstrating that the challenged statutes caused the societal bias that is their asserted injury. View "New Doe Child #1 v. Congress of the United States" on Justia Law

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Porter, the mayor of Paintsville, Kentucky, steered business and contracts to companies owned by his co-defendant, Crace, and ensured payment of a fraudulent invoice to Crace’s company, in return for payments disguised as loans. Porter was charged with theft concerning programs receiving federal funds, 18 U.S.C. 666(a)(1)(A), and bribery concerning such programs, section 666(a)(1)(B) and was sentenced to 48 months of imprisonment. The Sixth Circuit affirmed, rejecting arguments that the conviction under section 666(a)(1)(B) was unsupported by sufficient evidence and that the admission of a witness’s prior statements to investigators and the admission of another witness’s deposition testimony violated his confrontation rights. A conviction under section 666(a)(1)(B) does not require evidence of a quid pro quo “in connection with” any “official act.” It is enough if a defendant corruptly solicits anything of value with the intent to be influenced or rewarded in connection with some transaction involving property or services worth $5000 or more. Testimony concerning prior statements to investigators did not violate Porter’s confrontation rights because they were not offered to prove the truth of the matter asserted. The government sufficiently demonstrated the unavailability of the deposition witness to testify at trial, so no Confrontation Clause violation occurred. View "United States v. Porter" on Justia Law

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The Tennessee Valley Authority (TVA) funds a retirement plan, administered by “the Board, and provides defined benefits to participants that includes a cost-of-living adjustment. In 2009, the Plan found that its liabilities exceeded its assets and it needed to make some changes to ensure its long-term stability. The Board temporarily lowered cost-of-living adjustments and increased the age at which certain participants would become eligible for cost-of-living adjustments. Plaintiffs, a class of participants, maintain that the Board failed to give proper notice to the TVA and Plan members before making the cuts and violated the Plan’s rules by paying their cost-of-living adjustments for certain years out of the wrong account. The district court rejected both claims on summary judgment. The Sixth Circuit affirmed in part, agreeing that the Board gave the required 30 days’ notice to the TVA and Plan members, after which the TVA may “veto any such proposed amendment” within the 30-day period, “in which event it shall not become effective.” The court vacated and remanded the accounting claim with instructions to dismiss it for lack of subject-matter jurisdiction. Plaintiffs have suffered no injury-in-fact, and have no standing. View "Duncan v. Muzyn" on Justia Law

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Airports, including Lake Cumberland Regional Airport, must make “standard grant assurances” (49 U.S.C. 47101) to receive federal funds. Assurance 22 requires an airport to “make the airport available . . . without unjust discrimination to all types ... of aeronautical activities.” Assurance 23 prohibits the airport from granting exclusivity to any aeronautical-services provider. Assurance 24 requires the airport to “maintain a fee and rental structure ... which will make the airport as self-sustaining as possible.” SPA’s director, Iverson, is an aircraft maintenance technician. SPA, at the Airport since 1986, leases hangars to store Iverson’s aircraft. SPA formerly provided maintenance services but now only refurbishes and re-sells aircraft. The Airport Board notified SPA of its intent to let SPA’s lease expire. Finding that there was an unmet need for maintenance services, it solicited bids. SPA did not bid. The Board picked Somerset and agreed to pay up to $8000 toward Somerset’s public liability insurance and forgo rent. The regional FAA office determined that the contract violated Assurance 24. The Board then conditioned the incentives on Somerset’s performing at least 10 aircraft inspections annually, making the contract more economically viable for the Airport, and agreed to terminate Somerset's agreement after one year to solicit new bids. The FAA approved. SPA asked to remain at the Airport “on fair and equal terms.” The Board sent SPA proposed agreements with the same terms, including provision of maintenance services, but refused to allow Iverson to personally lease a hangar. SPA refused to vacate. The Sixth Circuit affirmed in favor of the Board. The FAA standard for unjust discrimination is whether similarly situated parties have been treated differently. SPA is not situated similarly to Somerset. View "SPA Rental, LLC v. Somerset-Pulaski County Airport Board" on Justia Law

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In 2008, the National Park Service proposed a trailway through the Sleeping Bear Dunes National Lakeshore in Leelanau County, Michigan. One alternative route ran along Traverse Lake Road. Residents opposed sending visitors down their residential street and submitted objections during the public comment period. In 2009, the Park Service issued a revised proposal, with significant changes to the Traverse Lake Road portion of the trail. No one submitted objections. The Park Service approved the Traverse Lake Road route, making a finding of no significant impact. Six years later, the residents sued, citing the National Environmental Policy Act, 42 U.S.C. 4321. Plaintiffs sought to supplement the administrative record with pictures, maps, and other documents. The court dismissed most of their claims as forfeited because Plaintiffs failed to participate in the planning process in a manner that would alert the Park Service to their objections to the 2009 plan and held that Plaintiffs failed to show exceptional circumstances requiring supplementation of the record. The Sixth Circuit affirmed. Many of Plaintiffs’ objections during the 2008 comment period were sufficient to alert the Park Service to deficiencies in the 2008 Plan, but those comments did not preserve any challenge to the 2009 Plan. The record contains evidence addressing the issues Plaintiffs sought to prove with their supplemental material; the Park Service was not negligent in compiling the 3,005-page administrative record. View "Little Traverse Lake Property Owners Association v. National Park Service" on Justia Law

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The Tennessee Alcoholic Beverage Commission issues separate classes of licenses to manufacturers and distillers, wholesalers, and liquor retailers, Tenn. Code 57-3-201. To obtain a license, an individual must have “been a bona fide resident of [Tennessee] during the two-year period immediately preceding the date upon which application is made.” The statute imposes a 10-year residency requirement to renew the license. A corporation cannot receive a license “if any officer, director or stockholder owning any capital stock in the corporation, would be ineligible to receive a retailer’s license for any reason specified” and all capital stock must be owned by individuals who meet the same residency requirements. Anticipating litigation, the state sought a declaratory judgment construing the constitutionality of the durational-residency requirements. The district court found the requirements facially discriminatory; held that state regulations of the retailer and wholesaler tiers are not immune from Commerce Clause scrutiny just because they do not discriminate against out-of-state liquor; concluded that nondiscriminatory alternatives could achieve the durational-residency requirements’ purposes—citizen health and alcohol regulation; and found that the requirements violate the dormant Commerce Clause. The Sixth Circuit affirmed and found the unconstitutional provisions severable. View "Byrd v. Tennessee Wine & Spirits Retailers Association" on Justia Law

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The Tennessee Alcoholic Beverage Commission issues separate classes of licenses to manufacturers and distillers, wholesalers, and liquor retailers, Tenn. Code 57-3-201. To obtain a license, an individual must have “been a bona fide resident of [Tennessee] during the two-year period immediately preceding the date upon which application is made.” The statute imposes a 10-year residency requirement to renew the license. A corporation cannot receive a license “if any officer, director or stockholder owning any capital stock in the corporation, would be ineligible to receive a retailer’s license for any reason specified” and all capital stock must be owned by individuals who meet the same residency requirements. Anticipating litigation, the state sought a declaratory judgment construing the constitutionality of the durational-residency requirements. The district court found the requirements facially discriminatory; held that state regulations of the retailer and wholesaler tiers are not immune from Commerce Clause scrutiny just because they do not discriminate against out-of-state liquor; concluded that nondiscriminatory alternatives could achieve the durational-residency requirements’ purposes—citizen health and alcohol regulation; and found that the requirements violate the dormant Commerce Clause. The Sixth Circuit affirmed and found the unconstitutional provisions severable. View "Byrd v. Tennessee Wine & Spirits Retailers Association" on Justia Law