Short Circuit: A Roundup of Recent Federal Court Decisions

Harvesting Facebook data, directorial diversity, and corrupt intent.

Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.

New on the Short Circuit podcast: Special guest Joe Diedrich joins the panel to talk at various levels of generality about public school principals' occupational liberty and the effects of campaign finance disclosure laws on mom and pop.

• January 6 protestor is convicted of having "corruptly" obstructed an official proceeding. He challenges the conviction, arguing that "corruptly" covers only "an act dishonestly done with a hope or expectation of either financial gain or other benefit to oneself or a benefit to another person." D.C. Circuit: There are lots of ways to do something "corruptly," and one of them is using independently illegal means to achieve your ends, such as hitting police officers with sticks to facilitate one's storming of the U.S. Capitol (which this guy did). Dissent: Nope, "corruptly" means "with intent to obtain an unlawful benefit" for oneself or another. And who's to say whether this guy was trying to unlawfully obtain the job of president for Donald Trump as opposed to just protesting the outcome of the election?
• The FDA decides to stop regulating menthol-flavored e-cigarettes like tobacco-flavored e-cigarettes, and instead regulate them like e-cigarettes with flavors such as "Brain Freeze Carmel Cone," "Buncha Crunch," and "Bad Monkey Giovanni." After all, menthol is a flavor, and kids are more likely to consume products with "non-tobacco flavoring." Lawful? Well, it depends on whether the agency pulled a "surprise switcheroo." Third Circuit: No surprise here. After all, these guys are the experts. Dissent: I know a post hoc ergo propter hoc fallacy when I see one.
• After two Arab passengers board a Mesa Airlines flight from Birmingham to Dallas Fort Worth, a flight attendant gets nervous and alerts the captain that something is up. (Her gut, she says, has "never been wrong.") Ground security informs the captain that the two passengers, both frequent fliers who were calm and had done nothing particularly odd, are no risk. But the captain keeps the plane grounded until the flight is canceled. The two passengers connect the dots when, after leaving the plane, they are interrogated by the FBI, which finds nothing wrong and allows them to go on a later flight. They sue the airline for discrimination in violation of 42 U.S.C. § 1981. Fifth Circuit: And their case can go forward. The airline's argument that there was no discrimination because the flight was canceled for everyone misses the point; they wouldn't have canceled the flight if it hadn't been for the passengers' race and national origin.
• In late 2020, Nasdaq proposed rule changes requiring each company listed on its stock exchange to (1) disclose its board members' gender, race, and LGBTQ+ status, and (2) have, or explain why it does not have, at least two members of its board who self-identify as female, an underrepresented minority, or LGBTQ+. The SEC approved the proposed rules. And so does the Fifth Circuit, explaining that the Constitution doesn't apply, given that Nasdaq is a private entity, and the SEC acted within its authority in approving the rules.
• Plaintiff: The state took my property and sold it without notice! Sixth Circuit: The notice thing is a problem, but circuit precedent forecloses your takings claim. Concurrence: That's what circuit precedent says, but we should give some serious thought to whether we should entertain claims directly under the Takings Clause. (IJ agrees—and the Supreme Court will weigh in sometime next year!)
• The U.S. Sentencing Guidelines provide a two-point "drug house" enhancement for defendants who maintain a premises for the purpose of making or distributing drugs. Lansing, Mich. man: Sure, maybe I or my co-conspirators did a half-dozen drug transactions at my house, but a "primary" purpose of the house wasn't to deal drugs so the sentencing enhancement shouldn't apply. Sixth Circuit: Sentence affirmed. Dissent: The guy was responsible for only two of the drug transactions, and both involved minor quantities of fentanyl. That does not a drug house make.
• Illinois requires anyone who wants to provide cable or video service to get permission from state or local authorities, and pay a fee, as a condition of using public rights of way. City of East St. Louis, Ill.: Which means we can file a putative class-action lawsuit on behalf of all municipalities in Illinois seeking hefty fees from Netflix, Disney, Apple, Hulu, Amazon, WarnerMedia, YouTube, Peacock TV, DIRECTV, DISH Network, CuriosityStream, and CBS Interactive, right? Seventh Circuit: Sure, technically you can file that lawsuit, but you lose. Streaming services don't count as either a "cable service" or a "video service" as those terms are defined in Illinois law.
• Allegation: After high-speed chase, DEA agent shoots, kills suspect as he was trying to drive around the agent (who was on foot). Excessive force? Seventh Circuit: We decline to say. Qualified immunity.
• In 2022, then-gubernatorial candidate Kari Lake sued the Arizona Secretary of State (among others), alleging that Arizona's use of electronic voting machines was unconstitutional because of the risk that the machines would be hacked. Lake ultimately lost her election, along with multiple legal challenges to that election. Ninth Circuit: That's not all she lost. She no longer has standing to sue as a candidate and is left with only prospective claims as an Arizona voter. But Lake's implausible hypotheticals about voting-machine hacking are too speculative to support standing for that claim.
• Remember back in 2018, when news broke that the British political consulting firm Cambridge Analytica had improperly harvested personal data from millions of unwitting Facebook users? Facebook's stock took a beating, losing more than $200 bil in market cap. Investors filed an absolutely gargantuan 285-page complaint against the company and its executives, alleging that public statements they made about the incident amounted to securities fraud. Ninth Circuit: And at least some of those statements are actionable.
• Owner of a mobile home park in Calhan, Colo. (population: 762) starts thinking about converting it into an RV park. When the town catches wind of this, the Board of Trustees adopts an ordinance imposing a bunch of new regulations on RV parks—but exempts two existing RV parks, one of which is connected to the grandparents of two of the board members. Sounds like old-fashioned, small-town protectionism to us! Tenth Circuit: We've tried to be very clear that we don't care about that sort of thing.
• Pontotoc County, Okla. detention officer rapes pretrial detainee. He's fired, convicted. She sues. Now-former officer: Qualified immunity? Tenth Circuit (2020): No, coerced sex in jail violates the Constitution. Her case continues; a jury awards her $75k against the officer, but the court rejects her claims against the officer's supervisors, including one that his supervisors retaliated against her (for reporting the rape) by coercing her into pleading guilty to the charges for which she was awaiting trial. Tenth Circuit (2023, unpublished): Alas, she was on probation when she filed the complaint, so Heck v. Humphrey bars her retaliation claim.
• And in en banc news, the Seventh Circuit will not reconsider its decision allowing the victims of underage sex trafficking to sue Salesforce.com, which provided business assistance to the now-defunct Backpage.com.
• And in amicus news, IJ is asking the Supreme Court to take up Sharpe v. Winterville and hold that the First Amendment protects the right to film the police (in public)—and bars officers from arresting or otherwise retaliating against the people filming them.
• And in further amicus news, IJ is urging the Supreme Court to affirm a Fifth Circuit decision that has been dubbed the "biggest admin law case since Humphrey's Executor in 1935," as well as "the judicial equivalent of tossing a Molotov cocktail into the federal government." The case, Jarkesy v. SEC, raises the question of whether the government can impose massive fines in administrative "courts" where the judge and prosecutors are all employed by the same administrative agency. In the brief, IJ argues the Constitution requires a trial before an independent judge and jury, not an agency bureaucrat.

Kimberly Dunckel and her family run the Fairytale Farm Animal Sanctuary in Winston-Salem, N.C., caring for 70 abused and unwanted animals and offering a variety of educational programs for the community. But earlier this year, officials ordered the sanctuary to comply with a host of ad hoc, arbitrary zoning rules that essentially forced them to close their doors to the public—and that are not being enforced against neighboring properties, like golf courses and churches, that regularly have events and visitors. So we're pleased to report that this week a state judge denied the city's motion to dismiss the sanctuary's suit, which raises claims under the state constitution. Click here to learn more.