Appeal of Ferc Order Form of Petition for Review

Terminal week, the D.C. Circuit resolved four sets of petitions for review and one appeal. Each set of petitions for review models a unlike grade of regulatory cooperation between the authorities and private entities: a statute that incorporates industry standards, individual enforcement of an agency license, agency review of rules promulgated by cocky-regulatory organizations, and agency supervision of a semi-private contract. The disposition of the appeal, too, presumes a form of cooperation–this time, among private parties.

In American Public Gas Association v. U.S. Department of Energy, the Court remanded, without vacating, a Section of Energy dominion setting efficiency standards for "commercial packaged boilers" used to estrus commercial and multifamily residential buildings.  By statutory default, the Secretary of Free energy adopts efficiency standards promulgated by the American Guild of Heating, Refrigerating and Air conditioning Engineers. But nether sure circumstances, the Secretary may adopt a more stringent standard if "she has clear and convincing show the more stringent standard is economically justified, technically feasible, and will lead to significant conservation of energy." The consolidated petitions for review challenged the reasoning supporting the Secretary'due south finding that the standard she adopted was "economically justified." That finding rested on, among other things, a comparison of the "life-cycle costs" of commercial packaged boilers under the default standard and their life-bicycle costs nether the more stringent standard. Life-cycle costs include the purchase price and the nowadays-value discounted lifetime operating costs. The "[c]onceptual simplicity" of computing life-cycle costs "belies [its] operational complexity." Judge Ginsburg (joined past Chief Estimate Srinivasan and Judge Jackson) disassembled the operational complexities with feature clarity and found in the inner workings of the Department's assay questionable assumptions and methodologies that the Department had not adequately explained or dedicated. The panel remanded the rule to the Department to take "appropriate remedial action" within ninety days.

Several features of the decision will interest D.C. Circuit watchers. The commencement is the "clear and disarming show" standard that the Secretary must employ in deciding whether to exceed default efficiency standards. The Court observed that it is "unusual, maybe unique" in the world of breezy rulemaking: "we are enlightened of no other authorization for rulemaking subject field to this heightened evidentiary standard." The heightened standard did not, however, affect the stringency of judicial review: "The court asks itself only whether information technology was reasonable for the bureau to decide it met the standard." The 2d interesting characteristic of the decision also relates to the clear and convincing evidence standard. The Section of Free energy joined the petitioners in arguing that it had failed to employ the advisable standard, yet the Court "summarily" rejected the argument. So confident was the Department of Free energy that the rule failed at the threshold that the Department did not even bother to defend the rule on the merits in briefing (for which information technology earned the Court's rebuke). The Department yet insisted that it would be able to provide "a total and sound explanation" for the Rule on remand, which leads to the tertiary interesting feature of the decision: Despite the Department's failure to reveal its justifications for the dominion, the panel applied Centrolineal-Indicate to remand the rule without vacating it. Since the D.C. Circuit adopted the controversial merely widely used "remand without vacatur" remedy xxx years ago, the remedy has been subject to a diverseness of legal and practical criticisms, amongst these, that keeping the rule in place deprives the bureau of whatever "incentive to fix the deficient rule." To avert this problem , the panel ordered that the rule would be vacated if the Department fails to "take appropriate remedial activeness within 90 days." In doing then, it followed the advice of our fellow D.C. Circuit Review—Reviewed author Judge Griffith, who in 2008 encouraged his colleagues to consider alternatives to "open-ended remand without vacatur."

In City of Miami v. FERC, the Court also remanded for the bureau to testify its piece of work. The City of Miami filed a complaint with the Federal Energy Regulatory Commission charging that the Thousand River Dam Authority is violating its license by failing to acquire championship to or an easement on land in the City of Miami that routinely floods due to the Authority'south operation of the Pensacola Dam. (The Pensacola Dam spans the G River near the town of Disney, but you may exist surprised to acquire that this case has nothing to do with Florida—all of these locations are in the Great Land of Oklahoma, where Miami is pronounced "My-am-uh.") FERC rejected the complaint on grounds Approximate Silberman (joined past Judges Henderson and Pillard) found "surprisingly unpersuasive."

The Court flatly rejected i of FERC's grounds for denying Miami'due south complaint: that FERC could address the flooding problem in an upcoming relicensing proceeding. This rationale "runs afoul of a basic principle of administrative constabulary: an bureau faced with a claim that a political party is violating the constabulary (here an existing license) cannot resolve the controversy by promising to consider the issue in a prospective legal framework." The Courtroom then remanded for the agency to accost the 4 other defects in its order. Perhaps the near interesting is FERC's failure to explicate the impact of the Pensacola Act, which Congress passed in the midst of the dam controversy in an apparent effort to resolve the controversy. The statute cryptically provides that "[t]he licensing jurisdiction of the Commission for the project shall non extend to any land or water outside the project purlieus." Considering the flooded land in Miami lies outside the project purlieus, FERC reasoned that the Act deprived it of authority to require the Grand River Dam Authorization to acquire the land. FERC also argued that the Human activity deprived the Court of Article 3 jurisdiction because it made Miami'south injury irremediable. The Court rejected FERC's effort to turn "a claim issue" into a jurisdictional ane, but information technology establish the significant of the Human action ambiguous and left information technology to FERC to metaphrase the provision in the outset instance.

The agencies were more than successful in defending confronting the other petitions for review. Duke Energy Progress LLC 5. FERC arose from dispute between Knuckles Free energy and the Northward Carolina Eastern Municipal Power Bureau. Under an energy purchase contract, Duke charges the Agency in part based on the Agency's pro rata share of the demand on Duke's system in a one-hour "snapshot" of arrangement usage taken during the meridian hour. The Bureau charges batteries during off-top hours then uses the batteries to supply energy to its customers during peak hours, thereby reducing its pro rata share of the demand in the snapshots. The Bureau sought a ruling past FERC that its tactic is a permissible class of "Need-Side Direction" or "Demand Response"—both of which the parties' contract permits. FERC agreed with the Agency, and Knuckles petitioned for review.

The Court focused its assay on "Demand Response," which the contract defines as "activities designed . . . to manage or reduce the [Agency'southward members'] demands and/or load through the use or advice of pricing information to [the Bureau'southward or its members'] customers." Duke argued that "Need Response" covers merely reductions in demand that the Bureau achieves through communicating pricing information to customers. The Bureau relied on pricing data to predict peak-usage hours and deploy its batteries accordingly, just it did not communicate that information to customers.  The D.C. Circuit applies Chevron deference to FERC's interpretation of ambiguous energy contracts, and Approximate Tatel (joined by Judges Henderson and Pillard) found the "Demand Response" provision to be a "model of ambiguity." Judge Tatel cogently explains why:

The Court therefore deferred to FERC's interpretation and denied Duke's petition. In doing and then, it also rejected Duke's argument that the interpretation makes the contract confiscatory. If the Agency manages to reduce its usage to a point that Duke could not recover its costs, then Knuckles remains free to petition the commission to reform the parties' contract.

In Intercontinental Commutation, Inc. five. SEC, the Court resolved a petition for review of an SEC order approving fees for wireless connection services provided past affiliates of securities exchanges. I refer readers to Judge Ginsburg's opinion (joined by Judges Katsas and Walker) for an caption of the function and importance of these services, complete with Judge Ginsburg'south favored graphical depictions.

The exchanges are self-regulatory organizations that set their ain rules, field of study to SEC approval.  Amidst other things, the SEC has jurisdiction over rules governing "facilities of an exchange." The exchanges submitted the proposed fees to the SEC under protestation, arguing that the wireless connection services are non "facilities of an substitution." The Court rejected the exchanges' interpretation of that term, this time without invoking Chevron. Even though the wireless connectedness services practise non link directly to exchange mechanism that matches buy and sell orders, they are facilities of an substitution.

Although the SEC approved the proposed rates, the exchanges besides charged information technology with acting arbitrarily and capriciously. For example, the exchanges argued that the SEC failed to consider how subjecting their wireless connectedness services to SEC jurisdiction would disadvantage them relative to competing connection services. The Court ruled that "this argument conflates ii singled-out questions: (i) whether an arrangement is one the Congress decided ought to be subjected to the rule-blessing process, and (2) whether the SEC ought to approve a particular rule proposed past an SRO." The requirement that the SEC consider the impact of a dominion on efficiency and competition applies to the SEC's dominion-blessing determination, non to the determination of the SEC's jurisdiction.

Turning from the petitions to the entreatment, the Courtroom's conclusion in RICU LLC v. U.S. Department of Health and Human being Services concerns the scope of the Medicare Deed's jurisdictional "channeling" procedure. The channeling procedure requires individuals to nowadays a physical claim for payment of rendered services to the Section of Health and Human Services before seeking judicial review of Department activeness. The claimant in this case, RICU, contracts with U.Southward.-licensed physicians residing abroad to provide critical intendance telehealth services in the Usa. Medicare does not typically reimburse expenses incurred for critical care telehealth services, merely the Department temporarily authorized reimbursement for the elapsing of the coronavirus public wellness emergency. RICU sought clarification of whether its services would be reimbursable. The Department determined that the services would not be reimbursable because RICU's contract physicians are located outside of the United States, and the Medicare Act independently bars foreign payments. RICU challenged that determination nether the APA, and the commune courtroom dismissed on the footing that RICU had non presented a concrete claim for payment, equally required past the channeling procedure.

The Court affirmed. Judge Rogers (joined by Chief Guess Srinivasan and Judge Jackson) get-go rejected RICU's argument that its appeal to the Department for a description followed the channeling procedure because the appeal did not take the class of a concrete claim for payment of services already rendered. The Court and so rejected RICU's argument that information technology was entitled sidestep the channeling procedure in order to obtain judicial review. The Supreme Court has held that a political party need non follow the channeling procedure when the consequence of enforcing the procedure would birthday deprive the party of judicial review. The D.C. Circuit has but once applied this exception, however, and it refused to exercise so here. It concluded that, although RICU has no opportunity to submit a physical merits for payment because information technology is not a Medicare enrolled provider, its client hospitals take a sufficient incentive to pursue claims for payment on RICU'due south behalf.

One could perhaps analogize the latter belongings to third-political party standing. Not that the client hospitals would rely on 3rd-party standing to seek reimbursement for RICU's services; they would have standing in their own right. Only here we accept a Supreme Court ruling that some class of judicial review must exist available for a party injured by a Medicare decision (as a matter of statutory construction), and the D.C. Circuit has held that making review available to a third political party whose interests align with the aggrieved political party fulfills that requirement. I wonder if there is some other context in which third-party claims satisfy a right to judicial review. Ane hopes for RICU'southward sake that its client hospitals volition cooperate.


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