TLJ News from May 16-20, 2013

Supreme Court Construes Scope of Chevron Deference

5/20. The Supreme Court issued its opinion [44 pages in PDF] in City of Arlington v. FCC, a case involving an FCC declaratory ruling regarding state and local reviews of cell tower applications under 47 U.S.C. § 332.

The Supreme Court held that "an agency’s interpretation of a statutory ambiguity that concerns the scope of its regulatory authority (that is, its jurisdiction)" is entitled to deference under the Supreme Court's 1984 opinion in Chevron v. Natural Resources Defense Council, 467 U. S. 837.

Chevron is the landmark case regarding administrative procedure gives the Federal Communications Commission (FCC) and other "independent" agencies wide latitude to write regulations that give wild and implausible interpretations to federal statutes. Although, in the matter under review, the FCC issued a reasoned and logical interpretation of a statute.

The Federal Communications Commission (FCC) adopted and released a Declaratory Ruling [42 pages in PDF] on November 18, 2009 in which it concluded that "reasonable period of time" within the meaning of Subsection 332(c)(7)(B)(ii) is presumptively 90 days to process a collocation application to place a new antenna on an existing tower, and 150 days to process all other applications.

See, story titled "FCC Adopts Declaratory Ruling Regarding State and Local Tower Siting Procedures" in TLJ Daily E-Mail Alert No. 2,017, November 23, 2009.

Statutes. Subsection 332(c)(7)(B)(i) provides that "The regulation of the placement, construction, and modification of personal wireless service facilities by any State or local government or instrumentality thereof -- (I) shall not unreasonably discriminate among providers of functionally equivalent services; and (II) shall not prohibit or have the effect of prohibiting the provision of personal wireless services".

Subsection 332(c)(7)(B)(ii) provides that "A State or local government or instrumentality thereof shall act on any request for authorization to place, construct, or modify personal wireless service facilities within a reasonable period of time after the request is duly filed with such government or instrumentality, taking into account the nature and scope of such request." (Emphasis added.)

Subsection 253(a) provides that "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service."

Then, subsection 253(d) provides that if the FCC "determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b) of this section, the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency."

Subsection 332(c)(7)(A), a savings clause, provides that "nothing in this chapter shall limit or affect the authority of a State or local government or instrumentality thereof over decisions regarding the placement, construction, and modification of personal wireless service facilities."

Subsection 337(c)(7)(B)(v) provides for judicial review of "any final action or failure to act by a State or local government".

Proceedings Below. But, this matter arose because the CTIA filed a Petition for Declaratory Ruling [44 pages in PDF] with the FCC regarding the meaning of "within a reasonable time", and the FCC issued such a declaratory ruling (DR).

The City of Arlington, and the City of San Antonio, both located in the state of Texas, filed a petition for review with the U.S. Court of Appeals (5thCir) in which they argued that the FCC lacked authority to adopt this DR.

The cities argued that Subsections 332(c)(7)(A) and 337(c)(7)(B)(v) together display a Congressional intent to withhold from the FCC authority to interpret the limitations in Subsection 332(c)(7)(B).

The Court of Appeals, applying Chevron deference to the question whether the FCC possessed statutory authority to adopt the 90 and 150 day time frames, denied the petition for review.

The Supreme Court granted certiorari on the sole issue of Chevron deference.

Supreme Court. The Supreme Court affirmed. Justice Scalia wrote the opinion of the Court, in which Justices Thomas, Ginsburg, Sotomayor, and Kagan joined.

Scalia wrote that "The question here is whether a court must defer under Chevron to an agency’s interpretation of a statutory ambiguity that concerns the scope of the agency’s statutory authority (that is, its jurisdiction)." (Parentheses in original.)

"The argument against deference rests on the premise that there exist two distinct classes of agency interpretations: Some interpretations -- the big, important ones, presumably -- define the agency’s “jurisdiction.” Others -- humdrum, run-of-the-mill stuff -- are simply applications of jurisdiction the agency plainly has. That premise is false, because the distinction between “jurisdictional” and “nonjurisdictional” interpretations is a mirage. No matter how it is framed, the question a court faces when confronted with an agency’s interpretation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority."

Justice Breyer wrote a concurring opinion.

Chief Justice Roberts wrote a dissenting opinion, in which Justices Kennedy and Alito joined.

He wrote that "My disagreement with the Court is fundamental. It is also easily expressed: A court should not defer to an agency until the court decides, on its own, that the agency is entitled to deference. Courts defer to an agency’s interpretation of law when and because Congress has conferred on the agency interpretive authority over the question at issue. An agency cannot exercise interpretive authority until it has it; the question whether an agency enjoys that authority must be decided by a court, without deference to the agency."

Yahoo to Acquire Tumblr

5/20. Yahoo and Tumblr announced in a release that "they have reached a definitive agreement for Yahoo! to acquire Tumblr."

The two companies added that "Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO. The product, service and brand will continue to be defined and developed separately ... Total consideration is approximately $1.1 billion, substantially all of which is payable in cash."

Obama and Xi Jinping to Meet

5/20. The White House news office announced in a release that U.S. President Obama and People's Republic of China (PRC) President Xi Jinping will meet in Sunnylands, California on June 7 and 8, 2013.

This release states that "President Obama and President Xi will hold in depth discussions on a wide range of bilateral, regional and global issues. They will review progress and challenges in U.S.-China relations over the past four years and discuss ways to enhance cooperation, while constructively managing our differences, in the years ahead."

It adds that National Security Advisor Tom Donilon will travel to Beijing on May 26-28 to prepare.

People and Appointments

5/20. The Senate confirmed Sherri Chappell to be a Judge of the U.S. District Court for the Middle District of Florida by a vote of 90-0. See, Roll Call No. 128, and Congressional Record, May 20, 2013, at Page S3631.

5/20. The Senate confirmed Michael McShane to be a Judge of the U.S. District Court for the Oregon. See, Congressional Record, May 20, 2013, at Page S3631.

House Passes Bill to Reform Rulemaking Process at SEC

5/17. The House amended and passed HR 1062 [LOC | WW], an untitled bill that would impose additional requirements upon the Securities and Exchange Commission (SEC) when promulgating rules. It would require cost benefit analyses.

This bill, which is not likely to be enacted into law, would only affect rulemaking proceedings, and existing rules, of the SEC. However, it could serve as a model, were the Congress to consider similar legislation to reign in burdensome rulemaking by other federal agencies -- especially the Federal Communications Commission (FCC).

The Executive Office of the President's (EOP) Office of Management and Budget (OMB) released a document titled "Statement of Administration Policy " on May 15 that states that "the Administration opposes passage of H.R. 1062". However, this statement does not threaten a veto.

This bill is backed by Republicans, who argue that the SEC is promulgating rules that are are burden on the economy, small businesses, and job creation. There is also the matter that the SEC has failed to comply with statutory mandates to write rules that implement HR 3606 [LOC | WW], the "Jumpstart Our Business Startups Act" or "JOBS Act", which would facilitate access to capital by start up companies, especially in the tech sector.

The vote on final passage was 235-161. See, Roll Call No. 160. Republicans voted 218-0. Democrats voted 17-161. 37 members did not vote.

Democrats who represent districts with high percentages of Republican voters, and/or who narrowly won election in 2012, were more likely than other Democrats to vote for the bill, or not vote. Also, Hispanic Democrats, and Democrats who represent districts with high percentages of Hispanic voters, were more likely than other Democrats to vote for the bill, or not vote.

From Silicon Valley, Rep. Zoe Lofgren (D-CA) did not vote, while Rep. Anna Eshoo (D-VA) voted against the bill.

Rep. Jeb Hensarling (R-TX) is the Chairman of the House Financial Services Committee (HFSC), which reported this bill. He stated that this bill simply says that the SEC "has to adopt cost-benefit analysis to ensure that the advertised benefits of one of their rules is actually measured against the actual cost of what they're doing". See, Congressional Record, May 17, 2013, at Page H2732.

Rep. Scott Garrett (R-NJ), the sponsor of the bill, said that "At a time when new regulation after new regulation is being proposed by this administration, it is critical that we restore some semblance of order to the regulatory process and ensure that our Nation's small businesses do not continue to drown in a sea of red tape."

Rep. Stephen Fincher (R-TN) stated that "Title I of the JOBS Act was so important for smaller companies in trying to go public, because a lot of regulations come with the IPO process. If more and more of a company's resources have to be dedicated to government regulations, the company can't expand and create jobs. That's why we need a balanced approach to regulations."

Rep. Maxine Waters (D-CA), the ranking Democrat on the HFSC, spoke in opposition. She said that "the bill before us today adds even more requirements, tying up the SEC resources, and putting it at even greater risk for litigation for every rule".

She also said that "It is ironic that as House Republicans push this bill forward, they are also calling for the SEC to speed up its efforts on Jobs Act rules."

Rep. Carolyn Maloney (D-NY) said that this bill "would in effect cripple the SEC just as it undertakes the immense task of implementing the essential Dodd-Frank reforms."

She added that "bill comes in the guise of requiring the SEC to undertake a cost-benefit analysis of regulations. But it is really a prescription for paralysis of the SEC's ability to protect our investors and our markets".

This bill provides that "Before issuing a regulation under the securities laws ... the Commission shall ... clearly identify the nature and source of the problem that the proposed regulation is designed to address, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted ... utilize the Chief Economist to assess the costs and benefits, both qualitative and quantitative, of the intended regulation and propose or adopt a regulation only on a reasoned determination that the benefits of the intended regulation justify the costs of the regulation", and "identify and assess available alternatives to the regulation".

It also provides that "In deciding whether and how to regulate, the Commission shall assess the costs and benefits of available regulatory alternatives, including the alternative of not regulating, and choose the approach that maximizes net benefits".

While this bill would only impose requirements upon the SEC, it adds that "It is the sense of the Congress that other regulatory entities ... should also follow the requirements of" this bill.

Sen. Schumer and Sen. Graham Introduce Media Shield Bill

5/16. Sen. Charles Schumer (D-NY) and Sen. Lindsay Graham (R-SC) introduced S 987 [LOC | WW], an untitled bill, on May 16, 2013. The Senate bill had 12 cosponsors as of May 22. Three are Republicans. The Senate bill was referred to the Senate Judiciary Committee (SJC).

Sen. Schumer and Sen. Graham stated in a May 16 letter to Senators urging them to join in cosponsoring their bill that "The Free Flow of Information Act, also known as the media shield bill, would provide clear and meaningful protection at the federal level for journalists against improper intrusion into the free press."

They continued that "The bill would prohibit demands for protected information (such as confidential source information) from journalists unless a court determines that the public interest is better served by disclosure of the information than by protecting the journalist’s source. The legislation includes carefully crafted exceptions for national security -- in cases where a judge finds that the information sought is necessary to prevent terrorism or harm to national security, the information must be disclosed. However, a judge will still have to approve that request. In addition, the bill treats requests for records from third parties -- such as phone companies -- in the same manner as requests from journalists themselves, and requires notice to those journalists when such a request is made." (Parentheses in original.)

They concluded that their bill "represents the product of extensive negotiations between the journalism community and the national security experts in the Administration, and has won the support of both the Administration and the Newspaper Association of America. It passed out of the Senate Judiciary committee by a strong bipartisan vote in 2009. In sum, the bill is a balanced approach that meets both the needs of the press and the needs of our national security."

Senate Judiciary Committee Approves Chen for Federal Circuit

5/16. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved the nomination of Raymond Chen to be a Judge of the U.S. Court of Appeals (FedCir) by voice vote.

This is a non-controversial nomination on fast track for confirmation by the full Senate. Sen. Charles Grassley (R-IA) stated that "I know of no objection to that nomination to the Federal Circuit."

Raymond ChenChen (at right) is a long time attorney for the U.S. Patent and Trademark Office (USPTO) who would bring to the Federal Circuit much expertise in patent law, and an understanding of the perspective of the USPTO.

Chen has been Deputy General Counsel for Intellectual Property Law and Solicitor for the USPTO since 2008. He was the USPTO's Associate Solicitor for ten years before that. He argued In Re Bilski on behalf of the USPTO before the Federal Circuit.

See also, story titled "Obama Nominates Raymond Chen for Federal Circuit" in TLJ Daily E-Mail Alert No. 2,522, February 8, 2013.

See also, Chen's responses to the SJC's questionnaire, and his responses to written questions from SJC members.

Senate Judiciary Committee Approves Srinivasan for DC Circuit

5/16. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved the nomination of Srikanth Srinivasan to be a Judge of the U.S. Court of Appeals (DCCir) on a roll call vote of 18-0.

Srinivasan is currently the Principal Deputy Solicitor General at the Department of Justice (DOJ).

Senate Democrats treated some former President Bush's nominees for DC Circuit in a particularly political and partisan manner. President's Obama's recently abandoned efforts to put Caitlin Halligan on the DC Circuit has given Senate Republicans further reason to scrutinize the President's nominees for this circuit.

However, Srinivasan possesses some attributes that make him acceptable to conservatives and Republicans. For example, he clerked for Judge Harvie Wilkinson of the U.S. Court of Appeals (4thCir), a favorite of legal conservatives, and author of the book [Amazon] titled "Cosmic Constitutional Theory: Why Americans Are Losing Their Inalienable Right to Self-Governance".

Also, Srinivasan worked in the DOJ's Office of the Solicitor General (OSG) during the Bush administration.

Sen. Orrin Hatch (R-UT), Sen. Jeff Sessions (R-AL) and Sen. Charles Grassley (R-IA) all praised Srinivasan at the May 16 meeting.

While Presidents, and the Senators of the President's party, always tout their judicial nominees' qualifications, experience, and judicial abilities, there is some broader acknowledgement that Srinivasan is in fact a particularly qualified nominee.

He clerked for Supreme Court Justice O'Connor, and has argued twenty cases before the Supreme Court.

He has also worked for the law firm of O'Melveny & Myers from 2007 through 2011, where he represented Hynix Semiconductor before the U.S. Court of Appeals (FedCir) in Hynix v. Rambus, 645 F.3d 1336 (2011).

He has not argued any technology related cases before the Supreme Court. However, he was the counsel of record for the U.S. in Tenenbaum v. Sony BMG Music Entertainment, in which the Supreme Court denied certiorari on May 21, 2012. See, Supreme Court docket. That is, his name is on the brief of the OSG opposing Tenenbaum's petition. See also, September 16, 2011 opinion of the U.S. Court of Appeals (1stCir). Joel Tenebaum infringed copyrights by peer to peer distribution.

President Obama first nominated Srinivasan in the 112th Congress on June 11, 2012. See, White House news office release. The President renominated him in the 113th Congress on January 3, 2013.

His nomination is on track for confirmation. However, Senate Republicans are concerned that the Obama administration is seeking to pack the DC Circuit that judges who will routinely reject petitions for review, and appeals, of final orders of federal agencies that implement policies of the Obama administration. Thus, any further nominees may face Republican opposition. See, related story in this issue titled "Future Nominees for the DC Circuit May Face Republican Opposition".

See also, Srinivasan's responses to the SJC's questionaire, and his responses to written questions from SJC members.

Future Nominees for the DC Circuit May Face Republican Opposition

5/16. If the Senate confirms Srikanth Srinivasan to be a Judge of the U.S. Court of Appeals (DCCir), as it is likely to do, then the DC Circuit will have eight active Judges. Nominally, however, this leaves three vacancies -- vacancies that have heretofore been left vacant. Going forward, President Obama may try to fill these positions, and Senate Republicans may resist this as reminiscent of former President Roosevelt's failed court packing scheme in 1937.

Pursuant to 28 U.S.C. § 44(a), there are eleven positions for active judges on the DC Circuit. When the 110th Congress enacted HR 660 [LOC | WW], the "Court Security Improvement Act of 2007", now Public Law No. 110-177, the Congress reduced the size of the DC Circuit from twelve to eleven. Section 509 of that Act reduced the size of the DC Circuit, and increased the size of the 9th Circuit to 29.

The DC Circuit serves an area with a population of just over 600,000 people, or about 55,000 people for each of its eleven authorized judges. The 9th Circuit serves an area with a population of about 62,000,000 people, or about 2.1 Million people for each authorized judge.

The DC Circuit has long operated with less than the full complement of judges. Basically, they are not needed. Moreover, President Obama has not attempted to expand the number of active judges to the full authorized eleven.

It might also be noted that the DC Circuit has a large pool of senior status judges, Harry Edwards, Laurence Silberman, Steven Williams, Douglas Ginsburg, David Sentelle, and Raymond Randolph.

However, recent media stories have suggested that President Obama may try to appoint a full complement of DC Circuit judges. One of his key motivations may be to alter its future rulings on matters affecting the authority of the executive branch to act without Congressional authorization.

When President Obama took office, both the House and Senate were controlled by Democrats. Both enacted legislation that implemented key policy initiatives of the President. Constitutional issues regarding the separation of powers and checks and balances did not seem important at that time.

However, the House switched to Republican control after the 2010 elections, and the Democratic Senate leadership, cautious not to loose its majority, has since been reluctant to push key components of President Obama's agenda. As a consequence, the Obama administration is increasingly turning to executive orders, agency rulemakings unsupported by specific grants of legislative authority, and "recess appointments" while the Senate is in session, to implement its agenda.

These tactics raise legal questions regarding Presidential authority. These questions are disproportionately resolved by the DC Circuit. Hence, the President may have a new found interest in the composition of the DC Circuit. The three vacancies present President Obama an opportunity to pack the DC Circuit with judges who will uphold his actions.

This interest may have intensified on January 25, 2013, when the DC Circuit issued its opinion in Canning v. NLRB, holding a National Labor Relations Board (NLRB) action invalid because the NLRB acted without a quorum, because three of its putative members held office only by intrasession "recess appointment" made by President Obama, without Senate confirmation.

Judge David Sentelle, an appointee of former President Reagan, wrote the opinion of the court. He took senior status two weeks later, on February 11. Judge Karen Henderson, an appointee of the first President Bush, joined. Judge Thomas Griffith, an appointee of the second President Bush, wrote a concurring opinion. That is, all three judges on the panel were Republican appointees.

The U.S. Court of Appeals (3rdCir) issued its divided opinion [157 pages in PDF] on May 16, 2013 in NLRB v. New Vista, App. Ct. Nos. 11-3440, 12-1027, and 12-1936, reaching the same conclusion as the DC Circuit. Judge Brooks Smith, who was appointed by the second President Bush, wrote the opinion of the Court. Judge Franklin Van Antwerpen, a senior status judge appointed by the second President Bush, joined. Judge Joseph Greenaway, who was appointed by President Obama, wrote a dissent.

The DC Circuit has also recently overturned actions by the Securities and Exchange Commission (SEC) and Environmental Protection Agency (EPA).

It is too late to undo the DC Circuit's decision invalidating President Obama's recess appointments to the  NLRB, or to influence its forthcoming decision in the challenge to the Federal Communications Commission's (FCC) network neutrality rules. However, the DC Circuit may eventually decide key issues, such as whether President Obama has authority to regulate the cyber security related practices of businesses via executive order and agency rules.

The Senate Judiciary Committee (SJC) held an executive business meeting on May 16 at which it approved the nomination of Srikanth Srinivasan to be a Judge of the DC Circuit. Most of the meeting was devoted to mark up of an immigration bill. However, Sen. Charles Grassley (R-IA), the ranking Republican on the SJC, spoke at length about the DC Circuit. See, transcript of Sen. Grassley's speech.

He said that "At present, there are four active judges on the court who were appointed by Republican presidents and three active judges appointed by Democratic presidents. Should Mr. Srinivasan be confirmed, the court will be in evenly divided, in terms of the appointing President’s party."

He quoted from an article by Juliet Eilperin published in the Washington Post on April 2, 2013 titled "Obama seeks to shift conservative tilt of key court".

Eilperin wrote, and Sen. Grassley quoted, this: "Giving liberals a greater say on the D.C. Circuit is important for Obama as he looks for ways to circumvent the Republican-led House and a polarized Senate on a number of policy fronts through executive order and other administrative procedures."

Eilperin opined that "the D.C. Circuit has taken on outsize importance because of its conservative tilt and its role overseeing Obama's executive authority."

Sen. Charles GrassleySen. Grassley (at right) continued that "The political questions are appropriately left to the legislative branch of government. Those who advocate for a type of court-packing, reminiscent of the FDR era, to obtain an advantage in public policy debates, misunderstand the purpose of our Courts. They are to resolve cases and controversies."

He stated that the DC Circuit has the lightest workload, and the SJC should "hold hearings on the D.C. Circuit and examine its workload" before it approves any more nominees for the DC Circuit.

Sen. Grassley is also the sponsor S 699 [LOC | WW], the "Court Efficiency Act of 2013", a bill that would decrease the size of the DC Circuit from 11 to 8, and increase the size of the 11th Circuit and 2nd Circuit by one judge each. The cosponsors are all Republicans, Sen. Orrin Hatch (R-UT), Sen. Mike Lee (R-UT), Sen. Jeff Sessions (R-AL), Sen. Lindsay Graham (R-SC), Sen. John Cornyn (R-TX), Sen. Ted Cruz (R-TX), and Sen. Jeff Flake (R-AZ).

Sen. Hatch said that "I know that they are not overworked down there" at the DC Circuit.

Sen. Sessions said that the DC Circuit is "clearly the lowest caseload circuit" in the country.

Sen. Patrick Leahy (D-VT), the Chairman of the SJC, pointed out that former President Bush had sought to fill more seats on the DC Circuit. However, he did not mention the matter of Peter Keisler.

Sen. Lee said that the DC Circuit caseload is light. He continued that former President Bush nominated Peter Keisler (then Assistant Attorney General in charge of the Department of Justice's Civil Division) in 2006 for the DC Circuit, but that Democrats blocked that nomination, by not allowing the SJC to vote, in part based on the argument that the DC Circuit did not need another judge. Sen. Lee continued that the DC Circuit's caseload has decreased since then.

Sen. Christopher Coons (D-DE) said that DC Circuit cases are more complex, and that all eleven seats should be filled.

Sen. Sheldon Whitehouse (R-RI) said that it is "not helpful" to use the term "packing the court". He said that President Roosevelt sought to create new seats on the Supreme Court, whereas there are existing vacancies on the DC Circuit.

More Judicial Appointments

5/16. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved the nomination of  Jennifer Dorsey (USDC/DNev) on a party line roll call vote of 10-8. Sen. Charles Grassley (R-IA) stated that "There is concern on the Dorsey nomination. I think all members are aware of the press accounts of campaign contributions which were made at the time this nomination was under consideration. Perhaps we will have an opportunity to further explore exactly what took place, but I am concerned about the appearances and how such actions might undermine public confidence in our judiciary."

More People and Appointments

5/16. The Senate confirmed Ernest Moniz to be Secretary of Energy by a vote of 97-0. See, Roll Call No. 127.

5/16. President Obama named Daniel Werfel acting Commissioner of the Internal Revenue Service (IRS). See, White House news office release.

Go to News from May 11-15, 2013.